Geopolitical Chessboard and New Power Dynamics: MENA Infrastructure Investment Redraws the Global Strategic Map

Introduction

As global supply chains undergo dramatic restructuring driven by decarbonisation, digital transformation, and great power competition, the Middle East and North Africa (MENA) region has become the central arena for this infrastructure geopolitics shift. From the Strait of Hormuz to the Suez Canal, from the Red Sea to the Mediterranean, these ancient strategic waterways now carry significance far beyond oil transport — they are arteries of digital traffic, corridors of military logistics, and levers for projecting great power influence.

A 2020 policy study co-published by the Italian Institute for International Affairs (IAI) and the Barcelona Centre for International Affairs (CIDOB) — part of the EuroMeSCo network — reveals this profound transformation. The study argues that connectivity, militarisation, and blurred regional boundaries are fundamentally reshaping the geopolitical logic of MENA infrastructure. For investors and policymakers, understanding this shift is no longer a competitive advantage; it is a necessity for survival.

[IMAGE: Satellite-style map of the Middle East and North Africa highlighting key chokepoints: Strait of Hormuz, Suez Canal, Bab el-Mandeb, Strait of Gibraltar. Glowing nodes and connecting lines symbolise fibre optic cables, oil pipelines, and shipping routes. In the background, silhouettes of cranes, LNG storage tanks, and desalination plants intertwine with images of military vessels and flags of China, Russia, and the EU. Cinematic lighting, no text or watermarks.]

The Dual Nature of Strategic Chokepoints: Energy Arteries and Digital Lifelines

The MENA region contains the world's densest network of strategic chokepoints. The Strait of Hormuz carries approximately 20% of global oil shipments. The Suez Canal is a critical waterway connecting Asian and European trade. The Bosporus and Dardanelles control access between the Black Sea and the Mediterranean. The Strait of Tiran is the lifeline for Israel's port of Eilat. But a frequently overlooked fact is that these chokepoints are not just energy arteries — they are also digital lifelines.

From the Mediterranean to the Red Sea, from the Arabian Sea to East Africa, dense networks of submarine fibre optic cables traverse these waters, carrying enormous volumes of internet traffic between Europe, Asia, and Africa. When a container ship blocked the Suez Canal, it affected not only global supply chains but also the stability of digital infrastructure along the route. This "physical-digital" dual dependency means that any disruption to a strategic chokepoint will produce ripple effects far beyond the traditional energy market.

Research confirms that infrastructure investment can significantly reduce energy costs and attract foreign direct investment. In Qatar, Saudi Arabia, and the UAE, port and logistics hub expansions are creating new regional economic centres. However, this construction boom also carries deep militarisation risks. In recent years, the UAE's Khalifa Port, Turkey's Tughril military base, China's military logistics facility in Djibouti, and Russia's attempts to establish a base on Sudan's Red Sea coast are all transforming these strategic corridors into potential flashpoints.

[IMAGE: Infographic showing traffic density data for seven major strategic chokepoints, with military presence and spheres of influence marked for China, US, Russia, and regional powers.]

The Hidden Impact of Energy Transition: Stranded Assets and New Oases

The global decarbonisation process is having a profound impact on the MENA region's traditional energy infrastructure. The region holds the world's largest oil and gas reserves, along with extensive associated infrastructure — subsea pipelines, LNG terminals, refineries, and petrochemical complexes. However, as the world shifts toward renewable energy, these assets face the real risk of becoming stranded.

But within the crisis lie opportunities. The study points out that existing oil and gas pipelines can be retrofitted to transport hydrogen — a key carrier viewed as the clean energy of the future. Saudi Arabia's NEOM project is building the world's largest green hydrogen facility, and the UAE and Egypt are also actively advancing hydrogen strategies. This transformation from "fossil fuel corridors" to "hydrogen corridors" is creating an entirely new geopolitical landscape.

Furthermore, the MENA region has exceptional solar and wind energy resources. Solar PV farms in the Sahara Desert can not only meet local demand but also export electricity to Europe via high-voltage transmission networks. This "desert-to-Europe" energy corridor concept is attracting keen interest from both European and Chinese investors. The EU's "Global Gateway" initiative and China's Belt and Road are forming a complex relationship of both competition and cooperation in this field.

The focus of MENA infrastructure investment projects is undergoing a fundamental shift: from单纯的oil and gas extraction and transport to diversified energy mixes, including solar PV, wind power, hydrogen, and nuclear energy. For fossil-fuel-dependent economies like Saudi Arabia and the UAE, this transformation is both a survival challenge and a historic opportunity for economic diversification.

The Rise of Non-Western Powers: The Strategic Footprints of China, Russia, and India

The study emphasises that a core driver of MENA infrastructure investment is the active engagement of non-Western powers in the region. China, Russia, and India are deepening their strategic presence through different strategies and priorities.

China has left the deepest infrastructure footprint in the MENA region through its Belt and Road Initiative. From Greece's Piraeus port to Sri Lanka's Hambantota port, China is building a port network encircling Eurasia. But in the MENA region, China's focus is even more diversified: Haifa port in Israel, Khalifa port in the UAE, the Suez Canal Economic Zone in Egypt, and participation in Saudi Aramco's industrial city projects — Chinese capital and technology are everywhere. These investments are not merely economic; they are strategic positioning — securing China's place at key nodes in global supply chains while paving the way for renminbi internationalisation and the "Digital Silk Road."

Russia has chosen a more targeted path. Its naval base in Tartus, Syria, is Russia's only naval foothold in the Mediterranean. In Libya, Russian Wagner Group mercenaries have seized oil fields and critical infrastructure. In Egypt, Russia's Rosatom is building the Dabaa nuclear power plant, Russia's largest nuclear project in Africa. Russia's approach is often tightly linked to military security, with infrastructure investment frequently serving as a lever for geopolitical influence.

India's "Act East" policy has found a new strategic pivot in the MENA region. The India-Iran-Afghanistan Chabahar Port-Zaranj-Delaram corridor is a key route connecting Central Asia to the Indian Ocean, bypassing Pakistan's Karachi port. India is also actively participating in UAE energy infrastructure projects and seeking a share of port developments in Saudi Arabia and Qatar. For India, MENA infrastructure investment is both an energy security safeguard and a strategic tool to counter China's growing influence in the region.

[IMAGE: World map showing key nodes and routes of China's Belt and Road, Russia's nuclear projects, and India's Chabahar port corridor in the MENA region, with national flag icons and brief statistical data.]

Fragile Connectivity: From Digital Divides to Physical Fault Lines

While infrastructure investment has boosted connectivity within the MENA region, that connectivity is also fragile and uneven. Research finds that the digital wave has not benefited all countries equally. Gulf Cooperation Council countries (especially the UAE, Qatar, and Saudi Arabia) are building world-class digital infrastructure, including 5G networks, data centres, and submarine cable hubs. But conflict-ridden countries like Iraq, Syria, Libya, and Yemen are excluded from the global digital dividend — lacking both the investment and the stable environment to maintain such infrastructure.

This "digital divide" is creating new dependencies. Djibouti, for example, has earned significant revenue by leasing military bases to great powers like China, the US, and France, yet its digital infrastructure depends on Chinese investment under the Belt and Road framework. This asymmetric relationship leaves smaller countries in vulnerable positions amid great power competition.

In the blurred border regions from the Maghreb to sub-Saharan Africa, infrastructure projects face even more complex geopolitical risks. Research shows that energy, transport, and digital corridors crossing the Sahara Desert are disrupted not only by interstate disputes but also by non-state armed groups (such as Islamist militants in the Sahel region). Projects in these "fault zones" often require large-scale security guarantees, increasing investment uncertainty.

Meanwhile, climate change is amplifying these risks. Sea-level rise threatens coastal ports and LNG terminals. Extreme weather events can destabilise digital infrastructure. In the UAE and Saudi Arabia, desalination plants are critical to urban survival, yet these plants themselves are highly dependent on fossil fuels — a resource curse cycle that is difficult to break.

[IMAGE: Comparison chart showing traditional "Asia-Europe" shipping routes versus the proposed India-Middle East-Europe Corridor (IMEC), with major nodes, estimated transit times and cost differentials, overlaid with a trade flow heatmap.]

The New Battlefield of Supply Chain Diversification

The COVID-19 pandemic and subsequent geopolitical shocks (such as the Russia-Ukraine war) have profoundly changed the logic of global supply chains. The trend toward de-risking and nearshoring has made the MENA region an ideal candidate for supply chain diversification. The UAE's Jebel Ali Port, Dubai's logistics corridor, Qatar's Ras Laffan Port, and Egypt's Suez Canal Economic Zone are all actively courting international manufacturers seeking to reduce their single-source dependence on China.

This trend resonates with MENA infrastructure investment projects. The proposed India-Middle East-Europe Corridor (IMEC) aims to establish a land-sea route from India to Europe via Saudi Arabia, the UAE, and Jordan, bypassing the strategic risks of the Suez Canal and the Red Sea. While still in the initiative stage, IMEC already reflects the strategic intent of the US and its allies to build a "de-Sinicised" infrastructure network in the MENA region.

However, this competition is not always zero-sum. Research shows that many large infrastructure projects in the MENA region actually benefit from joint Chinese-foreign investment. Saudi Arabia's NEOM project, for instance, is primarily targeted at Chinese enterprises but has also attracted European and American partners. The UAE's Khalifa Port is a successful three-way collaboration between Abu Dhabi, China, and French interests. This "hybrid model" may represent the new normal for MENA infrastructure investment — pragmatic cooperation remains the most reliable path to economic development, even in the shadow of great power competition.

A Deep Audit: An Action Guide for Investors and Policymakers

Faced with the increasingly complex geopolitical landscape of MENA infrastructure investment, traditional project evaluation methods are no longer sufficient. Investors need to go beyond cost-benefit analysis and adopt a "risk-resilience" framework to systematically assess the vulnerability of infrastructure assets to geopolitical shocks. Several key points deserve attention:

First, re-evaluating the value of control over strategic chokepoints. The Strait of Hormuz, the Suez Canal, and the Bab el-Mandeb are no longer mere shipping lanes; they are Achilles' heels of the global economy. Any state or non-state actor that controls or threatens these chokepoints wields disproportionate influence. When evaluating investments in ports, pipelines, or cable projects, it is essential to explicitly assume "who could control or block these assets in extreme scenarios."

Second, integrated analysis of governance and security risks. Infrastructure project failures in the MENA region often stem not from technical or financial issues, but from local governance deficits or deteriorating security environments. The impact of the Yemen conflict on Red Sea shipping, the destruction of Qatari energy infrastructure by the Libyan civil war, and the threat of terrorism in the Sinai Peninsula to the Suez Canal are all vivid examples. Investors need to build dynamic "political risk - infrastructure security" assessment models and prepare corresponding contingency plans.

Third, the new strategic value of digital infrastructure. The invisible networks of submarine cables, data centres, and 5G networks are becoming more strategically important than oil pipelines. Controlling data flows means mastering information sovereignty. China's submarine cable projects in the Red Sea region and Chinese company participation in 5G construction show that digital infrastructure is becoming a core great power interest. In this domain, the EU's "digital sovereignty" claims, US technology export controls, and China's "Digital Silk Road" will produce the most intense confrontations.

Fourth, early positioning in hydrogen corridors. Although the hydrogen economy is still in its early stages, the MENA region, with its cheap solar and wind resources, is poised to become a major global producer and exporter of green hydrogen. Saudi Arabia, the UAE, Oman, and Egypt are all actively planning hydrogen infrastructure projects. For investors with a 10-20 year horizon, locking in key pipeline routes and liquefaction facilities early could yield significant first-mover advantages.

Conclusion: Finding a Clear Path Through the Strategic Fog

The geopolitical chessboard of MENA infrastructure investment is evolving rapidly. On one hand, global energy transition, digital transformation, and great power competition are injecting new vitality into this traditional region. On the other hand, entrenched regional conflicts, governance deficits, and militarisation trends are bringing unprecedented uncertainty to investors.

The core insight from the 2020 EuroMeSCo study is this: in the MENA region, infrastructure is no longer a neutral public good — it is a weapon and a prize in geopolitical competition. Investors who understand this new logic will be able to find a clear path through the labyrinth of risk and opportunity. Those who continue to view the region with 20th-century thinking are likely to be marginalised in the next round of infrastructure shuffling.

As the ancient waterways of the Strait of Hormuz, the Suez Canal, and the Red Sea continue to carry the lifelines of the global economy, the MENA region's development over the coming decades will depend in large part on whether all parties can find a delicate balance between competition and cooperation. For global investors, this is an era of both great promise and the need for strategic patience.

[IMAGE: Futuristic conceptual image of new MENA region infrastructure: solar PV farms, hydrogen production facilities, digital fibre optic cables, and smart ports, with drones and orbital satellites in the sky, showing the region's modern transformation as a global strategic hub. No text, soft lighting.]