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Executive Summary

The region's conflicts are settling into a pattern of attrition, not resolution. The US-Iran standoff over Hormuz is stalled. Washington is surging naval forces and has kept strikes on the table after the November 3 midterms. In the meantime the confrontation plays out through repeated tanker attacks and an Iranian economy breaking down under the blockade, with 85 percent inflation, a record-low rial, and the oil minister's resignation. Gulf exports have largely recovered through bypass routes, but those routes are now targets themselves.

The war is also spreading to a second chokepoint. Yemen's October 4 government offensive and the Houthi strikes on Saudi airports and Aramco sites have turned a frozen conflict into a direct fight over the Bab el-Mandeb, displacing more than 184,000 people. Regional states are increasingly arranging their own security. Saudi Arabia, Turkey and Pakistan activated their defense pact, and Algeria confirmed it intervened militarily in Niger. In Iraq, the completed US withdrawal leaves Iran-aligned militias stronger.

Ceasefires are holding on paper but not in practice. Three years after October 7, Israeli strikes continue in Gaza and Lebanon while their agreements stall. Settler violence and restrictions at holy sites are rising in the West Bank and Jerusalem ahead of Israel's October 27 election. Institutions are weakening across the region: Israel's refusal of access to Palestinian election officials puts the November 28 vote at risk, and Libya's parliament and schools are paralyzed by leadership and pay disputes. For operators, the main risk is persistent disruption rather than any single shock. Exposure is concentrated at maritime chokepoints, southern Saudi Arabia, northern Iraq and the Palestinian Territories.