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Middle East
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.
View of what state media KCNA reported was a test-firing of the weapons system of the new "Choe Hyon-class" warship, in this picture released on April 30, 2025, by the Korean Central News Agency.
Welcome to the new global arms race: faster, smarter, more dangerous and more expensive than ever. In 2024, world military spending surged toa record $2.7 trillion, the steepest annual increase since the Cold War's end, driven largely by European, Asian and Middle Eastern nations.
Who's buying?
Faced with threats from Russia, Europe has ramped up defense budgets, with Poland's spending growing by 31% to $38 billion and Sweden’s by 34% to $12 billion in its first year of NATO membership. Germany increased military expenditure by 28% to $88.5 billion, making it the fourth-largest spender globally and rearming the nation that precipitated the two major world wars of the last century.
In the Middle East, Israel's military spending soared by 65% per cent to $46.5 billion, the largest annual rise since 1967, amid its war with Hamas in Gaza and conflict with Hezbollah in South Lebanon. In Asia, China spent 7% more on its military in 2024, adding an estimated $314 billion, raising fears of an imminent operation against Taiwan, which boosted its military spending by 1.8% in 2024 to $16.5 billion. Fellow Asia-Pacific power Japan saw its military budget rise by 21% to $55.3 billion, its largest annual increase since 1952.
Who's selling?
Traditional arms exporters like the United States, France, Russia, China, and Germany continue to dominate the market. However, emerging players such as India, Turkey, and Israel are increasing their share. Notably,Israel's defense exports reached a record $14.8 billion in 2024, with Europe accounting for 54% of sales, up from 35% the previous year.
What’s on the wish list?
Today’s arms race is not just about quantity, but technology. Nations are investing heavily in next-generation weapons, including drones, hypersonic missiles, artificial intelligence, cyber capabilities, and space-based systems.
In the US, President Donald Trump’s desire for a “Golden Dome” missile defence system akin to Israel’s “Iron Dome” would add $175 billion to Washington’s arms budget over the next three years. It would also require the cooperation of neighboring Canada, at a price of $61 billion, or 51st statehood – which Prime Minister Mark Carney has made clear is not on the table.
Russia’s recent announcement that it is equipping Belarus withantiballistic Oreshnik missiles capable of striking all of Europe has upped the need for missile defence systems on the continent. The United States, China, France, and Germany have also invested in electromagnetic railguns that shoot projectiles without gunpowder; last year, Japan became the first country to test one at sea.
Strategic implications
All this warmongering could deal a death blow to arms control agreements. The New START treaty between the US and Russia is set to expire in February 2026, withlittle hope for renewal. It could also see new theatres of war emerge: in the Asia Pacific around Taiwan, in Europe in countries bordering Ukraine, and in cyberspace, through the use of disinformation and propaganda campaigns. And all that military spending will put a dent in national budgets, possibly requiring cuts to social benefits, increased debt, or fewer government services - which won’t make voters happy, and could contribute to political instability.
Israeli Prime Minister Benjamin Netanyahu followed by National Security Minister Itamar Ben-Gvir walk inside the Israeli parliament, the Knesset, in Jerusalem March 27, 2025.
Israel’s ruling coalition is facing its most serious crisis yet. Two of the country’s ultra-Orthodox parties — United Torah Judaism and Shas — announced they are quitting Prime Minister Benjamin Netanyahu’s government over proposed changes to long-standing rules that exempt ultra-Orthodox students from Israel’s military draft. The split is likely to collapse the coalition. The centrist opposition Yesh Atid party has already filed a motion to dissolve the Knesset, Israel’s legislature. A vote on that, set for June 11, is likely to succeed, triggering a general election by November.
The withdrawal of the two parties came in response to a bill introduced by a member of Netanyahu’s Likud party that would curtail military exemptions. The ultra-Orthodox community has largely been exempted from military service since Israel’s founding, but that arrangement is under growing strain as the Gaza war stretches Israel’s manpower, forcing repeated reserve call-ups that have generated increasing public anger at this exemption.
“This issue — ultra-Orthodox conscription — is part of a divide that’s governed Israel for 70 years. It’s not new, but it’s symbolic of the larger cultural war,” says Middle East Institute Scholar Dr. Ilan Peleg.
But this was just the straw that broke the camel’s back. Netanyahu’s coalition has been becoming increasingly fractured as polarization and government dissatisfaction has risen in the country. The prime minister is personally motivated to remain in charge to preserve his legal immunity amid ongoing corruption trials. To do so, he has relied on two key groups to stay in power: ultra-nationalists who want to escalate the war in Gaza beyond what much of the Israeli public is willing to tolerate, and ultra-Orthodox parties who insist on maintaining exemptions from military service — a stance that has generated resentment among some non-Orthodox Israelis, who bear the brunt of the war effort.
With the ultra-Orthodox unlikely to return without a clear legislative fix — and none is forthcoming — the odds of a government collapse are high.
This upheaval raises big questions.
The first is Iran. “The threat posed by Iran’s nuclear program is one of the few unifying issues among Israelis,” says Eurasia Group’s Middle East Director Firas Maksad. “A successful raid that delays Iran’s ability to acquire a nuclear weapon could strengthen Netanyahu’s domestic position.”
But a dramatic move against Iran, without strong US backing — particularly from President Donald Trump, who currently favors diplomacy — would carry major risks.
“Even if it’s possible technically to do it, maybe desired by Israelis,” Peleg explains, “the American veto would be a major factor on the negative side.”
The second is Gaza. Early elections would raise pressure on Netanyahu to secure more hostage releases from Gaza and strike a temporary ceasefire — with growing war fatigue and frustration over hostages likely to weaken Likud at the polls.
If the government collapses and elections are held, the increasingly unpopular Netanyahu could lose his grip on power. He would be challenged by former Prime Minister Naftali Bennett, whose newly-registered right-wing party is currently leading in the polls.
Netanyahu, a skilled politician who has held the premiership in several stints since the 1990s, has come back from more than one prediction of his demise. Will this time be different?
Maksad says that while it’s “not impossible that [Netanyahu] could manage to return the premiership… It would be an uphill battle.”
Muslim pilgrims perform the dawn prayer around the Kaaba, Islam s holiest shrine, at the Grand Mosque complex in Mecca.
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.”
US President Donald Trump meets with China's President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, on June 29, 2019.
Trump speaks with Xi
US President Donald Trump and his Chinese counterpart Xi Jinping spoke Thursday for the first time since the former returned to office, as a recent pause in their trade war looked set to fall apart. Both sides recently stepped back from mutual triple-digit tariffs, but Beijing has drawn fire from Trump for restricting the export of rare earths minerals used by the US auto and tech industries. No breakthroughs were announced but Trump described the call as “very positive” and said a summit is in the works.
Netanyahu’s coalition set for divorce
In what could spell the end for Israeli Prime Minister Benjamin Netanyahu’s government, two ultra-Orthodox parties that form part of the governing coalition are reportedly set to back the Knesset’s dissolution, in protest against a potential new law that would fine religious university students who skip military service. The dissolution vote will take place on June 11. If United Torah Judaism and Shas, the two dissenting parties, join the opposition in voting to dissolve the government, there will be elections again in Israel.
US institutes new travel ban
Trump on Wednesday barred foreign nationals from 12 countries from entering the United States – including Afghanistan and Haiti – and placed partial restrictions on seven others. The ban is set to take effect on Monday 12:01 EST. The US president linked the new restrictions to Sunday’s terror attack in Colorado against a group of people who were marching in solidarity for the Israeli hostages in Gaza. Trump implemented a similar travel ban during his first term, one that the Supreme Court upheld in 2018.A local Iraqi Kurdish footballer walks with his friends near a sportswear shop in the district of Soran, northeast of Erbil, Iraq, on April 6, 2019.
If there’s a mention of FC Barcelona’s youth soccer system, fans of the Blaugrana will think straight to La Masia, the academy that produced legends of the game like Lionel Messi, Carles Puyol, and – more recently – Lamine Yamal.
What they might not think about is the Kurdish areas of Iraq and Syria. Yet that is exactly the place the famed Catalonian club has decided to set up another six youth soccer schools.
Called the “Hope League,” the aim of this initiative, per the club, is to “promote social cohesion and prevent future violent conflicts and radicalization processes among new generations — with special attention to the sons and daughters of victims of the Islamic State.” Kurdish fighters and the Islamic State fought violently from 2014 to 2019 for control of parts of Iraq, with the former coming out on top.
Despite the victory over IS, Kurdish independence efforts have languished. The Kurdistan Workers’ Party in Turkey formally disbanded last month after a four-decade struggle to achieve independence. Their Syrian contemporaries, who would have thought the fall of Bashar al-Assad would bring them respite,nowface attacks from Turkey.
The Catalonian independence push has also hit a bad run of form, albeit a less violent one. In 2024, seven years after a Spanish court blocked an independence referendum, an anti-independence socialist won the local government election – it was the first time a unionist candidate won in 14 years.
“The so-called ‘Catalan process’ has gone very much down,” says Toni Roldán, a former Spanish congressman from Barcelona who opposes Catalan independence.
What has the Catalan cause got to with Kurdish independence? Certain Barcelona fans see them as one and the same: A group of Barcelona fans once unfurled a banner at a game that read, “Kurdistan is not Iraq, Catalonia is not Spain.”
“[Catalan separatists] always presented themselves as sort of an oppressed region without a state,” says Roldán. “And these they always look at places like Kurdistan as similar to them, because they have their own language, their own history, their own culture, but they don't have their own states.”
So these schools are an effort to get these independence efforts back on their feet? Not exactly. After all, Barcelona’s archrival Real Madrid – a team not exactly renowned for supporting independence movements – is opening their own schools in these Kurdish areas.
Nonetheless, there’s “clearly a political driver” for the Catalonian club’s decision to open these soccer schools, per Roldán. The leader of the schools initiative is former Barcelona right-back Oleguer Presas, who despite his position, is renowned for his left-wing, nationalist sympathies.
The can of worms: There will be some outside of Catalonia who might be upset, namely those in Iraq.
Football is by far the most popular sport in this war-torn nation – it is home to the largest contingent of registered Barcelona fan clubs outside of Spain.
“When there is any kind of championship or game between Barca or Real Madrid with other teams, all the coffee shops are full of youth waiting for the game,” says Raid Michael, the country director for Un Ponte Per in Iraq, one of the organizations behind the Hope League.
Michael claims that Iraqis love for football transcends political and sectarian differences, noting that, “with football, youth especially forget about all these tensions — they support football in the end.”
But the initiative certainly won’t land well in Baghdad. Iraq’s central government has long been sensitive to independence movements in its northern region, where residents have previously voted in favour of secession from the federal government. There, the Iraqi Kurds operate a semi-autonomous government, maintain their own armed forces, and oversee the region’s natural resource exports. Tensions rose again last month, as Iraq’s Oil Ministry criticized energy deals directly brokered between the Kurdistan Regional Government and US energy companies.
Now, one of the largest football clubs in the world is setting up schools in Kurdish areas. What’s Arabic for conceding a goal?
What We’re Watching: Iran rejects US nuclear offer, Musk-Trump divorce goes public, Mongolian PM resigns
Iranian Supreme Leader Ayatollah Ali Khamenei speaks to the crowd during a commemoration ceremony held to mark the first anniversary of the death of former President Ebrahim Raisi and his entourage in Tehran, Iran, on May 20, 2025.
Iranian leader pours cold water on nuclear deal
US President Donald Trump’s hopes of clinching a quick and easy nuclear deal with Iran appear to be dashed, after Iranian Supreme Leader Ayatollah Ali Khamenei described the White House proposal – sent on Saturday – as “rude and arrogant.” The rejection comes days after a UN nuclear watchdog reported that Iran’s uranium is approaching weapons-grade levels. Even so, “Iran isn’t rejecting diplomacy and talks are likely to continue,” says Eurasia Group’s Iran expert Gregory Brew.
A Big Beautiful ‘Abomination’
“A disgusting abomination” – that’s how Tesla owner Elon Musk described the House Republicans’ “Big Beautiful Bill” on Tuesday afternoon, as his divorce from Trump grows increasingly public. Following Musk’s comment, some of the very people who passed the House bill are also now expressing buyer’s remorse. It looks like the chainsaw-wielding Musk has instead turned to throwing wrenches…