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Saudi Arabia's oil price problem
In the first quarter of 2025, Saudi Arabia reported a budget deficit of $15.7 billion—the highest figure since 2021. A big part of the reason is that Crown Prince Mohammad bin Salman is investing substantial financial resources in Vision 2030, a sweeping, decade-old development initiative designed to diversify the nation’s economy away from hydrocarbons.
However, with slumping oil prices and even higher spending, Saudi Arabia may have to scale back some of its more ambitious investment plans. In April, reports surfaced that the kingdom was drastically cutting its plans for Neom—a $1.5 trillion infrastructure project aimed at constructing a utopian megacity in the desert.
Here’s a look at how global oil prices have stacked up against Saudi Arabia’s fiscal breakeven price—the level needed to balance the state budget—since 2008.
Muslim pilgrims perform the dawn prayer around the Kaaba, Islam s holiest shrine, at the Grand Mosque complex in Mecca.
Hard Numbers: Saudi Arabia does crowd control for Hajj, US sanctions ICC judges, escaped Thai elephant behaves very well, and more
269,678: With the Hajj – the annual Muslim pilgrimage to Mecca – now under way, the Saudi government has barred more than 269,678 people from entering the country without permits. With over 1.5 million people expected to make their way to Mecca this week, the Saudi Arabia is cracking down in order to control crowd sizes.
9: A wild elephant escaped from the Khao Yai National Park in Thailand and stormed into a nearby grocery store, where he calmly munched on nine packets of sweet treats like rice crackers, dried bananas, and sandwiches, all while leaving minimal damage and taking a snack to go. Bulls in china shops could learn a thing or two.
81: Today marks the 81st anniversary of the D-Day landings, when nearly 160,000 Allied troops stormed the beaches of Normandy to liberate France from Nazi Germany. The day marked a critical turning point in World War Two, and is known as the largest amphibious invasion in military history.
4: US Secretary of State Marco Rubio announced sanctions against 4 International Criminal Court judges on Thursday, in retaliation for what he said was the “illegitimate” targeting of the US and Israel with war crimes accusations. “The ICC is politicized,” Rubio said. “The United States will take whatever actions we deem necessary to protect our sovereignty, that of Israel, and any other US ally.”
Trump’s Middle East playbook: Business first, diplomacy later
Ian Bremmer unpacks the significance of AI, defense partnerships, ongoing Iran negotiations, and the potential lifting of Syria sanctions. He also looks at how Trump’s personal rapport with Middle Eastern leaders, absence from Israel, and business ties are shaping US foreign policy. What does this approach signal about Trump’s priorities abroad—and how might it affect America’s global relationships?
Saudi Crown Prince, Mohammed bin Salman, and US President, Donald Trump, meet with the Syrian president Ahmad Al-Sharaa
Trump pledged to lift Syria sanctions, can Damascus seize the moment?
When US President Donald Trump promised to lift sanctions on Syria this week, the streets of Damascus erupted in celebration.
“It was a huge, huge day for Syrians,” says Ibrahim al-Assil, a Senior Fellow at the Middle East Institute in Washington, D.C., who is from the Syrian capital.
“Many people, my relatives and friends in Damascus, they are saying the same thing: ‘this is the second biggest day in my life after the fall of the regime!’”
For a country battered by more than a decade of war and mass emigration, Trump’s announcement has flung open a window of opportunity that few thought possible as recently as December. That was when current president Ahmed al-Sharaa, a one-time Al-Qaeda member, led a coalition of militias that overthrew the Assad dictatorship.
The reconstruction needs are huge. A recent UN report says Syria’s 14-year civil war cost the country at least $800 billion in lost GDP – the country’s annual output plunged from $67.5 billion in 2011 to just $23.62 billion in 2022. Estimates of the cost to rebuild the country’s infrastructure run into the hundreds of billions of dollars.
Trump’s move now opens the way for powerful foreign players like Saudi Arabia, Qatar, and Turkey to help foot that bill, without fear of running afoul of US law.
Hold up, those sanctions didn’t vanish just yet. There are numerous restrictions on the books. The president can lift some, but others require Congress. US Sen. Lindsey Graham (R-SC) has already questioned the wisdom of scrapping sanctions before it’s clear al-Sharaa and his allies have fully shed their jihadist pedigree.
Still, Trump’s personal commitment to sanctions relief, and the strong interest of US allies Saudi Arabia and Turkey in seeing it happen, means the measures are likely to come off sooner rather than later.
“There were some very strong dissenting voices within the administration,” says Firas Maksad, head of Eurasia Group’s Middle East practice. “But this was one of those times where the president just went over and above those differences.”
But even if the sanctions are scrapped, al-Sharaa still faces huge challenges if he wants to make good on the promise of Trump’s move.
For starters, he must tamp down long-standing sectarian tensions. Pro-government gunmen have recently clashed with both the Alawites – the Assad family’s own sect – and the Druze minority, which is backed by Israel. Christian and secular Syrians remain wary of a government still run almost entirely by Islamists close to al-Sharaa. At the same time, efforts to forge a new security force out of the country’s dozens of local militias have slowed.
What’s more, al-Sharaa has yet to follow through on a promise to appoint a new legislative council. The composition of that body will tell us a lot about whether he is willing, or able, to carefully balance the country’s various factions, but it will also serve a more basic function, says al-Assil.
“When we talk about investments and reviving the Syrian economy, that requires new laws to govern those investments, and a space to resolve conflicts so that they aren’t resolved through violence.” To date, that space seems to exist only among a small number of power-brokers close to al-Sharaa.
Lastly, Damascus will have to manage competition among the various outside powers jostling for influence in the new Syria.
The most immediate concern is Syria’s old foe Israel, which since December has moved aggressively to wreck Damascus’s military capabilities and establish its own sphere of influence in Southern Syria. The two sides are now speaking via backchannels, though, giving al-Sharaa the change to reach an understanding with the Israelis that gives him more breathing room.
But even among Syria’s friends there will be friction. The two likely giants on the scene, Saudi Arabia and Turkey, have in the past clashed over Istanbul’s support for Islamist political groups. Riyadh and Doha have had similar run-ins. Competing visions for Syria among its biggest patrons could prove destabilizing.
Despite this thicket of challenges, al-Assil is cautiously optimistic.
“Syrians want this to work,” he says, “they want to navigate a way to reconcile their differences, and they recognize how important this opportunity is. And that gives me hope.”
US President Donald Trump is welcomed by Saudi Crown Prince Mohammed Bin Salman in Riyadh, Saudi Arabia, on May 13, 2025.
Dollar diplomacy: Finance is the focus as Trump heads to the Gulf
In his first diplomatic overseas trip since returning to office, Donald Trump is embarking on a four-day tour through a trio of Gulf states with the goal of bringing home over $1 trillion in deals and investment pledges – and a free $400 million plane for good measure.
The US president will visit Saudi Arabia – his first overseas trip of his debut term was also to Riyadh – as well as Qatar and the United Arab Emirates.
Trump scored an early diplomatic win ahead of his visit when Hamas released Israeli-American hostage Edan Alexander on Monday — a move the paramilitary group framed as a gesture of goodwill toward the president. The release — made without any demands — was aimed at showing the US and Israel that Hamas is serious about pursuing another ceasefire and willing to negotiate, per Jonathan Panikoff, director of the Middle East Security Initiative at the Atlantic Council.
“Hamas clearly believes that the US is the only country — and Trump is probably the only person — with sufficient leverage over Netanyahu to compel him to make a deal,” Panikoff said.
Alexander’s release comes as Israel threatens to escalate its military campaign in Gaza, warning it may move toward full occupation of the strip after Trump’s visit to the region, if no new ceasefire agreement is reached.
White House Press Secretary Karoline Leavitt hinted that the trip would involve peace talks, too, saying that Trump still aims for a “prosperous and successful Middle East” where “extremism is defeated in place of commerce and cultural exchanges.”
But the Gaza War isn’t likely to be high on the agenda for Trump. Despite the Gulf’s support for Palestine, the focus is instead on business.
Saudi Crown Prince Mohammed bin Salman has pledged to invest $600 billion in the US over the next four years, which the Trump administration is trying to push up to $1 trillion. The UAE wants to go a step further, committing $1.4 trillion of investment over the next decade, with the majority of the funds going to AI and energy.
While Qatar has not committed to how much it is planning to invest, they’ve set the tone by readying a $400-million gift to the president in the form of a Boeing 747, raising ethics concerns about the US president accepting such a lavish gift from a foreign government.
The meetings are designed to be symbiotic: Gulf nations are opening their sovereign wealth coffers with the expectation of attracting investment from US tech giants — CEOs including Mark Zuckerberg are among those accompanying Trump on the trip. As these countries push to diversify their economies beyond oil, their decade-long investment promises aim to anchor their economic relevance to the US.
“They want it to be a place where the US thinks of trade with the Gulf countries in the same way that we think of trade with Canada, Germany, or Japan,” says Panikoff.
Hidden figures: Even if these investment pledges reach fruition, the Gulf countries would still have a long way to go until they reach the annual foreign direct investment levels from Japan, Canada, and Germany – the three countries which invest the most in the US. In 2023 alone, Japan ploughed $783.3 billion in the US – mostly in the automobile industry – followed by Canada at $749.6 billion, and Germany at $657.8 billion.
And what about Iran? Like Gaza, this isn’t likely to dominate talks. While Trump’s “maximum pressure” campaign once thrilled Gulf monarchies, they are now more skeptical of US security guarantees and more interested in stabilizing ties with Tehran. If Iran comes up on Trump’s trip, it will be behind closed doors.
“[The Gulf states have] gone largely onto plan B when it comes to Iran,” says Panikoff. “And plan B is détente.”
Trump’s inaction on wrongful deportation may spark constitutional crisis
Ian Bremmer shares his insights on global politics this week on World In :60.
If the US won't work to return a wrongly deported man to El Salvador despite a Supreme Court ruling, are we headed towards a constitutional crisis?
It certainly appears that way, and I think this is the constitutional crisis that the Trump administration would love to have. Because wrongfully deporting someone without evidence who is in the country illegally and therefore guilty of a misdemeanor, but sending them to a max security prison, which the Supreme Court says you shouldn't do, but now is in another country. Very few Americans are sympathetic to the case of this person. And indeed, Trump won on the basis in part of being sick and tired of allowing illegal immigrants to spend enormous amounts of time in the United States without recourse.
So he's breaking the law here. He's flouting independent judiciary and their decision-making, but he's doing it on an issue that most Americans have no sympathy on the other side. So the Democrats would have to be very wary of making this a hill they want to die on, and Trump knows exactly what he's doing. It is pretty impressive playbook for undermining rule of law and checks and balances on an increasingly authoritarian leaning executive. That's where we are.
Trump claims China-Vietnam talks are intended to "screw" the US. Does this run the risk of pushing Vietnam to China?
Certainly, most Vietnamese now are more well-disposed towards China than the US. First time we've seen that since the war. It's not true across Southeast Asia. Philippines, about 80% still pro-US, not pro-China. But it is a problem, and Xi Jinping understands that. And that's why he went in and was received directly by the president as opposed to the prime minister last time who met him at the airport. 45 big deals that they're signing on trying to improve economic coordination. Clearly a bit of a surprise to Trump, just as the direct retaliation from the Chinese, even though the Americans warned them, "Negotiate, don't retaliate." But that's exactly what China did, and Trump frankly should have expected that was coming. Now he looks a little bit weaker in the way he's backing down and creating exemptions for a lot of people in this space.
Saudi Arabia plans to pay off Syria's World Bank debt. Could this be a major turning point for Syria's future and its ties with regional allies?
It certainly helps. We've also seen the Qataris already say they're going to offer gas through Jordan into Syria. I think that this is all promising. The Saudis were never going to do that, provide any support as long as Assad was in place. Now they are. The Americans are pulling troops out, and Turkey is going to be the most important country on the ground. But economically, it's going to be the Gulf States, and that gives this new Syrian regime a better chance to succeed. Something we all clearly are rooting for in terms of one of the places that we'd like to see a little more stability from. Anyway, that's it for me, and I'll talk to you all real soon.
- Zelensky snubs China’s peace push, Trump vows to end war “very quickly” ›
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President Donald Trump's special envoy, Steve Witkoff, speaks to reporters at the White House in Washington, on March 19, 2025.
Ukraine talks continue in Saudi Arabia after Trump envoy praises Putin
While US President Donald Trump’s special envoy Steve Witkoff predicted “real progress, particularly as it affects a Black Sea ceasefire on ships between both countries,” leading to a “full-on shooting ceasefire,” Kremlin spokesperson Dmitry Peskov contradicted him, telling Russian state TV on Sunday that “difficult negotiations” await and that “We are only at the beginning of this path.”
Witkoff was also criticized by Western experts for an interview with pro-Trump broadcaster Tucker Carlson that aired Friday, in which he dismissed UK Prime Minister Keir Starmer’s proposed peacekeeping plan for Ukraine as “a posture and a pose” and repeated several Kremlin talking points, including that Ukraine is a “false country.” Witkoff also said that Russia’s control over five Ukrainian regions – of which he was only able to name two – should be internationally recognized and praised Vladimir Putin as “super smart,” adding, “I don’t regard Putin as a bad guy.”President Donald Trump looks on as military strikes are launched against Yemen's Iran-aligned Houthis over the group's attacks against Red Sea shipping, at an unspecified location in this handout image released March 15, 2025.
US strikes Houthi strongholds, seeks to keep shipping lanes open
The United States launched widespread strikes on the Iran-backed Houthis in Yemen on Saturday, killing 53 people and injuring 98 as it targeted military sites and a power station in the rebel group’s southwest stronghold. The attacks were the largest US military operation since President Donald Trump returned to office.
“To Iran: Support for the Houthi terrorists must end IMMEDIATELY! Do NOT threaten the American People, their President, who has received one of the largest mandates in Presidential History, or Worldwide shipping lanes,” Trumpposted on social. Iranian Foreign Minister Abbas Araghchi urged the US to halt the airstrikes, while Gen. Hossein Salami denied that Iran was involved in Houthi offensives.
The United States has been part of a Saudi-led coalition that has fought the Houthis since 2014, but tensions have been especially frayed ever since the Yemenite rebel group started ambushing Israeli ships that passed through the Red Sea shortly after the Oct. 7, 2023, Hamas attacks, disrupting a hefty portion of global trade. There has been calm in the region ever since Israel and Hamas brokered a ceasefire deal in January, but the Houthis on Tuesday said they would restart their guerilla campaign on the water.
Don’t expect a truce soon: Once the leader of the coalition against the Houthis, Saudi Arabia now seems to be on the sidelines, leaving the US to lead the fight against the Iran-aligned group — and the Trump administration has pledged to continue strikes over the next few days. The Houthi resistance has been stubborn for some time, and the militants have promised to retaliate, so the Americans might have their work cut out as they seek to maintain a vital shipping pipeline.
“A few days of strikes will probably not bring about an end to the Houthis’ attacks,” counterterrorism expert Thomas S. Warrickwrote. “Unless the Trump administration is prepared to go even further.”