October 7 attacks reshape Middle East alliances, economies and power balances

In the three years following the Oct. 7 attacks, Israel’s extensive military operations in Gaza have resulted in more than 74,000 Palestinian deaths and the destruction of large parts of the territory, while also eliminating key leaders of Hezbollah, Hamas and Iran’s supreme leader. Iran’s once-robust alliance network has been severely weakened, with the Houthi movement in Yemen standing out as a remaining stronghold that now controls parts of the Red Sea and threatens the Bab al-Mandeb strait.

The United States, which previously anchored its Middle East policy on the Abraham Accords, has seen its role as a security guarantor erode, leading regional states to seek alternative partnerships, exemplified by the Mecca security pact linking Saudi Arabia, Turkiye and Pakistan. New alignments have also emerged, with Turkey and China gaining influence in Syria and diplomatic negotiations over Iran. Economically, the West has avoided a 1970s-style oil shock, but Gulf exporters such as Saudi Arabia and Qatar face sharply revised growth forecasts, highlighting the broader financial fallout of the reshaped regional landscape.