Shafaq News – Baghdad

The Middle East enters 2026 not on the path to resolution, but in a state of enforced equilibrium. Ceasefires have reduced the pace of violence across several fronts, yet they have failed to resolve the underlying political, economic, and security disputes that drive conflict. From Gaza and Lebanon to Yemen, Syria, and Iraq, the region is settling into a pattern of managed instability, where escalation is contained, deterrence is constantly tested, and unresolved power struggles leave states and societies exposed to sudden shocks.

Rather than signaling stability, the persistence of ceasefires without political settlements points to a deeper regional reality: crises are being postponed, not solved, as economic strain, internal fragmentation, and rival geopolitical agendas continue to shape the Middle East’s outlook for 2026.

Iraq: Strategic Balancing Under Sustained Pressure

Iraq enters 2026 amid efforts to form a new government and recalibrate its regional and international posture, while political fragmentation and external pressure continue to shape decision-making.

According to official budget data, the 2025 federal budget was built on an assumed oil price of around $70 per barrel and daily exports exceeding 3.3 million barrels, underscoring the country’s continued reliance on hydrocarbons for aboit 90% of state revenues. Elevated oil prices in recent years have provided short-term fiscal breathing space, but this dependence leaves public finances exposed to global energy market volatility.

World Bank estimates place Iraq’s overall unemployment rate at 14–15%, with youth unemployment exceeding 27%, reflecting persistent labor-market strain despite large public-sector hiring. Poverty rates, which declined modestly after the post-pandemic recovery, still affect an estimated 25% of the population in some provinces, particularly in southern and rural areas, according to Iraqi Planning Ministry data. At the same time, the public-sector wage bill continues to consume a substantial share of annual spending, limiting fiscal flexibility for infrastructure, health, and education investment.

Institutional vulnerabilities remain evident in the energy sector despite repeated pledges to improve electricity supply. Thecountry continues to experience chronic power shortages during peak summer demand, importing large quantities of gas and electricity from Iran (40-60%) under time-limited waivers. Any disruption, whether due to sanctions enforcement or regional escalation, could quickly translate into domestic unrest.

The presence of approximately 2,500 US troops in advisory roles, alongside Iran-aligned armed factions operating within Iraq’s security landscape, continues to place Baghdad at the intersection of broader regional rivalries. Developments involving Iran, Israel, and armed groups operating across borders reinforce Iraq’s role as a potential pressure point where regional escalation could translate into domestic strain even in the absence of direct confrontation.

At the same time, 2026 brings growing concern over the unresolved question of disarming armed factions operating outside full state control, mainly those within the Islamic Resistasnce in Iraq, such as Kataeb Hezbollah and Harakat Al-Nujabaa. Debate over the future of these groups has intensified, driven by international pressure, domestic political divisions, and fears that any miscalculation could trigger internal instability. Iraqi leaders face competing imperatives: reassuring external partners, preserving internal cohesion, and avoiding confrontations that could fracture the security landscape. How Baghdad manages this file in 2026 is increasingly viewed as a key test of state authority and strategic balance.

Taken together, Iraq’s outlook for 2026 reflects a delicate balancing act—managing economic vulnerability, political fragmentation, and mounting external and internal pressures while attempting to preserve stability in a highly volatile regional environment.

Read more: Three years on, Is PM Al-Sudani responsible for Iraq’s failing services?

Syria: Social Strain and Renewed Security Risks

Syria enters 2026 facing renewed sources of instability that extend beyond the familiar front lines of the conflict. While large-scale nationwide fighting has largely subsided, mounting social pressure, localized unrest, and unresolved security issues continue to pose risks to internal cohesion and regional stability.

Recent months have seen expressions of discontent in areas traditionally associated with the Alawite community, long viewed as a core support base of the government. Protests and localized tensions have been driven by economic collapse, fuel shortages, compulsory military service, and a sharp decline in living standards, with angrowing frustration even in regions previously insulated from open dissent. The clashes between the community and the Syrian forces resulted in hundreds of deaths.

At the same time, Druze-majority areas in southern Syria, particularly Suwayda province, have experienced intermittent protests and local clashes linked to opposition to Damascus’ authority, worsening economic conditions, and demands for greater local autonomy. These localized movements, while fragmented, point to deeper sectarian and social strains that could widen in the absence of meaningful economic relief or political accommodation.

Security concerns also persist across multiple fronts. According to the Syrian Observatory for Human Rights, Israeli airstrikes and incursions continued throughout 2025, with hundreds of violations documented in southern Syria, reinforcing the country’s exposure to regional confrontation. Separately, eastern and northeastern Syria face renewed uncertainty as ISIS cells seek to exploit security gaps, particularly in areas marked by overlapping control, displacement, and economic deprivation.

Clashes and tensions involving the Syrian Democratic Forces, local armed actors, and remnants of extremist networks underscore the fragility of existing security arrangements.

Without coordinated stabilization efforts, Syria could see a convergence of social unrest, sectarian tension, and militant activity in 2026, even in the absence of a return to full-scale civil war.

Lebanon: Deterrence and Internal Division

Lebanon enters 2026 under sustained Israeli military pressure, alongside deep internal divisions over the future of Hezbollah’s weapons and the unresolved issue of Israeli occupation of disputed border areas. While a broader escalation has been avoided, the security environment remains volatile and costly.

According to the United Nations Interim Force in Lebanon (UNIFIL), more than 10,000 Israeli airspace and ground violations have been recorded inside Lebanese territory since the ceasefire agreed on 27 November 2024. The Ministry of Health recorded more than 360 deaths due to these violations.

Internally, debate over Hezbollah’s weapons has intensified as fears grow that prolonged confrontation could draw Lebanon into a wider regional conflict.

The prolonged security pressure compounds Lebanon’s economic strain. Official data show annual inflation at around 14.7% in November 2025, easing from earlier peaks but still imposing high costs on households already affected by poverty, displacement, and service collapse. Large areas in the south remain damaged, yet no comprehensive reconstruction plan or funding mechanism has been formally adopted, leaving displaced residents uncertain about return timelines and recovery prospects.

The absence of both a unified national defense strategy and a clear reconstruction decision leaves the country exposed to continued attrition in 2026, with limited capacity to absorb further shocks.

Gaza: Ceasefire Management and Unresolved Governance

Gaza enters 2026 under a ceasefire that did not pause the Israeli large-scale hostilities and left core political and security questions unresolved. According to the Gaza Government Media Office, the total number of killed and missing during 2025 reached 29,117, including more than 25,700 fatalities whose bodies were received by hospitals and over 3,400 missing persons, many believed to be trapped under rubble. Infrastructure damage, mass displacement, and sharp economic contraction are expected to weigh heavily on prospects for recovery throughout 2026.

Diplomatic efforts to move beyond the ceasefire remain tentative. In December 2025, US President Donald Trump held talks with Israeli Prime Minister Benjamin Netanyahu at Trump’s Mar-a-Lago residence, focusing on the future of the truce and possible next steps. Trump framed the discussions as part of advancing what he described as a “second phase” of a peace plan, including a transition toward a Palestinian governing body in Gaza and the start of reconstruction. He said Hamas would be given a “very short period” to disarm under the ceasefire framework.

Israeli officials confirmed that talks centered on arrangements for the next phase of the ceasefire, including proposals for an international stabilization force, a temporary Palestinian governing committee, and conditions for Israeli withdrawal from current positions in the Gaza Strip. While the first phase of the ceasefire, launched on 10 October 2025, paused major fighting and enabled hostage exchanges and limited humanitarian access, the transition to a subsequent phase remains stalled.

Netanyahu has repeatedly stated that any new governance arrangement in Gaza depends on the complete disarmament of Hamas, a position that continues to shape Israel’s negotiating posture. US officials have signaled interest in maintaining momentum toward reconstruction and political transition, but without outlining a detailed timeline or enforcement mechanism, leaving Gaza’s future uncertain as 2026 begins.

Yemen: Fragmented Ceasefire and Diverging Regional Agendas

Yemen enters 2026 amid renewed uncertainty, despite the absence of sustained nationwide fighting. A sharp escalation in late 2025 exposed widening fractures within the Saudi-led coalition framework, particularly between Saudi Arabia and the United Arab Emirates, over influence, security arrangements, and the future political structure of Yemen.

These tensions surfaced publicly after Saudi-led coalition forces accused UAE-backed factions of actions that threatened Riyadh’s security interests. In response, Yemen’s Presidential Leadership Council declared a state of emergency, cancelled defense arrangements linked to Abu Dhabi, and ordered the withdrawal of remaining Emirati forces. The UAE subsequently confirmed it was ending its residual counterterrorism mission in Yemen, describing the move as a voluntary withdrawal aimed at safeguarding its personnel.

At the same time, Ansarallah (Houthis) appears to be consolidating its military and political position rather than moving toward demobilization. The group has continued to enhance missile and drone capabilities, strengthen internal security control, and signal readiness to escalate if negotiations collapse or regional tensions intensify. Analysts warn that this combination of stalled political settlement, external rivalry, and armed preparedness leaves Yemen vulnerable to renewed conflict in 2026, even in the absence of full-scale war.

Sudan: Prolonged War and Deepening Humanitarian Collapse

Sudan enters 2026 engulfed in one of the world’s most severe humanitarian and security crises, as fighting between the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF) continues into its third year with no political breakthrough in sight.

The United Nations has described the conflict as producing the largest displacement crisis globally, with nearly 14 million people displaced inside Sudan and across borders, and more than 21 million facing acute hunger. Recent UN and humanitarian assessments indicate that over 30 million Sudanese, nearly two-thirds of the population, now require humanitarian assistance, including food, health care, and shelter, as international funding continues to fall short of needs.

The violence has expanded well beyond its initial epicenters in Khartoum and Darfur, spreading into Kordofan and other regions. Cities such as El-Fasher and El-Obeid have become focal points of devastation, with health systems overwhelmed, markets collapsed, and mass displacement turning entire neighborhoods into largely abandoned areas. Independent estimates suggest tens of thousands have been killed, with some analysts warning that the true death toll is significantly higher once indirect causes such as starvation, disease, and lack of medical care are accounted for.

Both the SAF and RSF have been accused by international organizations of grave human rights violations, including indiscriminate attacks on civilians, summary executions, and ethnically targeted violence. Humanitarian access remains severely constrained, with aid workers facing persistent security threats; more than 110 aid personnel were reportedly killed, injured, or abducted in 2025 alone, while hundreds of health facilities have been damaged or rendered non-operational.

SAF leadership has publicly rejected mediated peace initiatives, maintaining that the conflict will end only with the disarmament or defeat of the RSF—a position analysts say entrenches the deadlock and prolongs civilian suffering as Sudan enters another year of war in 2026.

Iran and Israel: Deterrence, Nuclear Pressure, and Proxy Risk

Beyond Gaza, the Iran–Israel equation remains one of the most consequential variables shaping the region’s outlook in 2026. Neither side appears to be seeking full-scale war, but sustained warnings, military signaling, and proxy activity underline the risk of miscalculation.

Iran enters 2026 under continued economic and diplomatic pressure. Currency-tracking platforms recorded the Iranian toman at approximately 141,950 per US dollar by December 2025, reflecting persistent inflation, sanctions constraints, and budgetary strain. Efforts to revive elements of the 2015 nuclear agreement remain unresolved.

European Union officials and Iran’s foreign ministry have signaled cautious openness to resuming structured talks in early 2026, while Tehran insists on substantial sanctions relief and guarantees against future unilateral US withdrawal. Western diplomats continue to emphasize verification and monitoring, leaving negotiations fragile.

From Israel’s perspective, the nuclear file remains a core national security concern. Netanyahu reiterated in December 2025 that Israel would not accept a nuclear-armed Iran “under any circumstances,” framing potential military action as a last resort. Israeli officials continue to link contingency planning to assessments of Iran’s enrichment capacity, missile development, and regional activities.

Proxy dynamics across Lebanon, Syria, Iraq, and Yemen further complicate the picture. Iran-aligned armed groups retain the capacity to apply pressure without direct state-to-state confrontation, while Israel has signaled readiness to act against perceived threats beyond its borders.

Israeli domestic politics add another layer of uncertainty as there is a possibility of early elections in May, which has fueled concern that regional escalation, whether against Iran or on other fronts, could be used to consolidate political support at home, particularly as Prime Minister Benjamin Netanyahu continues to face legal and political challenges.

The brief but intense exchanges earlier in 2025 reinforced concerns that localized incidents could escalate rapidly if deterrence mechanisms fail.

A Year of Managed Uncertainty

Across the Middle East, 2026 is shaping up as a year of unresolved questions rather than decisive change. Ceasefires persist without political settlements, economic pressures intensify social strain, and regional rivalries continue to frame security calculations. While large-scale war is not inevitable, the absence of durable agreements and the persistence of structural vulnerabilities suggest that stability will remain conditional, fragile, and uneven across the region.

Written and edited by Shafaq News staff.