The year began for the region with the successful implementation of an agreed oil production cut, which has stabilised prices above $50 a barrel. Opec and some non-Opec producers have agreed to take out nearly 1.8 million barrels a day from the market.
This was followed by the official inauguration of the US 45th president on 20 January. Donald Trump is unpredictable and untested, and leaders across the region are eagerly awaiting some clarity on his strategy for the Middle East.
Elsewhere in the region, relations between Egypt and Saudi Arabia face more uncertainty following a court ruling annulling a decision to hand over two Red Sea islands to the kingdom.
US President Donald Trump has declared he will free up the American oil and gas industry to increase output, reduce climate action laws, and end dependence on Opec and any nations hostile to our interests.
The Trump administration is committed to energy policies that maximise the use of American resources, freeing us from dependence on foreign oil, said a statement on 20 January. Trump, who has said he will maintain good relations with GCC countries, has publicly opposed the Iran nuclear deal and vowed to eliminate the Islamic State of Iraq and Syria.
Opec and non-Opec production cuts going well
An extension of the agreed Opec and non-Opec production cuts beyond the six-month time frame is unlikely, Saudi oil minister Khalid al-Falih told the World Future Energy Summit in Abu Dhabi on 16 January.
Kuwaits oil minister had earlier said a compliance of 60 per cent had been achieved as Gulf producers Saudi Arabia, Kuwait, Qatar and non-Opec producer Oman had already cut output since the start of 2017. Russia, which had accepted a major share of the non-Opec 558,000 barrels a day (b/d) production decrease, cut a third of its required 300,000-b/d reduction for January.
A good level of compliance would ensure the rebalancing of markets by the end of the first half of the year, Al-Falih added, pre-empting a potential need for extending the production cut.
Egypts President Abdul Fattah al-Sisi has said he is planning a cabinet reshuffle. Yes, there will be a reshuffle and very soon . We will fix what needs fixing and improve performance, Al-Sisi said, without giving more details.
It remains unclear whether Prime Minister Sherif Ismail will retain his position.
The last cabinet reshuffle took place in March 2016, when Al-Sisi named 10 new ministers. That announcement included changes to the Ministry of Finance and the Ministry of Investment.
Despite the planned reshuffle, the existing cabinet has been hailed for its bravery in applying key economic reforms after Cairo secured a $12bn loan from the Washington-based IMF in late 2016.
The IMF says it expects GDP growth in Saudi Arabia to be 0.4 per cent in 2017, rising to 2.3 per cent in 2018. The IMFs previous forecast in October 2016 was for 2 per cent growth in 2017 and 2.6 per cent growth in 2018.
The forecasts are for real GDP, which does not take into account gains in revenue from rising oil prices. Instead, revenues decline because oil prices are constant and Saudi Arabia has committed to cutting production by 486,000 barrels a day (b/d) as part of an Opec agreement to cut output by 1.2 million b/d.
Saudi Arabias planned government spending in 2017
Increase in oil revenues this year
Contraction in military spending
In its 2017 budget announcement in December, Saudi Arabias Finance Ministry forecast GDP growth of 2 per cent for the year. The ministry added that if reforms did not continue, growth would only reach 1.2 per cent.
Abu Dhabi has moved closer to completing the merger of Mubadala Development Company and International Petroleum Investment Company with the establishment of Mubadala Investment Company, which will own the assets of both firms. The combined assets are said to be worth about $130bn.
The new entity is a public joint stock company that will enjoy financial and administrative independence and full legal capacity to achieve its goals.
Egypt-Saudi relations tested by court ruling on island transfer
Riyadh has been Egypts biggest financier since the overthrow of Mohamed Mursis government in 2013. But a combination of falling government revenues and a number of diplomatic rifts between the two countries has seen Riyadhs financial support slow of late.
The latest hiccup in relations came when Egypts Supreme Administrative Court issued a final ruling declaring Egyptian sovereignty over the disputed Tiran and Sanafir islands in the Red Sea. It followed an earlier ruling by an appeals court that upheld Cairos decision to give control of the uninhabited islands to Saudi Arabia. The latest ruling annuls the government and appeal courts decision.
Syrias deputy foreign minister has rejected the participation of Saudi Arabia and Qatar in peace talks due to be held in Kazakhstans capital Astana on 23 January. Faisal Meqdad was quoted on Lebanese television saying: Once Qatar and Saudi Arabia halt their support for terrorism we will discuss the matter of their participation in the talks.
Saudi Arabias Minister of Foreign Affairs Adel al-Jubeir told the World Economic Forum in Davos on 17 January that the Syrian High Commission is not involved in the Astana talks because the talks are for the fighting forces on the ground, not the political parties involved.
The Lebanese government has passed two decrees allowing the start of a tendering process for the countrys oil and gas blocks.
Progress with the tenders had stalled since 2013 due to disagreements between Lebanons political parties, but the new government, led by Prime Minister Saad Harari, has passed fresh measures to map out the conditions for auctioning energy assets.
90% Proportion of Lebanons energy needs currently imported
Beirut estimates the country has 96 trillion cubic feet of gas reserves and 865 million barrels of oil located offshore.
The government prequalified 46 companies in 2013 to take part in the tendering process for the oil and gas blocks.
Saudi Arabia is planning to publish the business plan for privatising the countrys desalinated water company before the end of the first quarter of 2017.
South Korean groups GS Engineering & Construction and Samsung Engineering and Spains Tecnicas Reunidas all submitted revised commercial engineering, procurement and construction bids in late 2016 on a project to upgrade Abu Dhabis Ruwais refining operations to handle additional offshore crude.
The UAEs Alec has started construction work on the estimated AED2.8bn ($763m) shopping mall at the Dubai Hills development for local developer Emaar Properties. Canadas EllisDon is the programme manager for the development.
Companies are now preparing to submit bids in late February for the estimated $800m marine engineering works at the $5bn Ras al-Khair maritime complex, located on the east coast of Saudi Arabia. The tender closing date has been extended several times; bids were originally due to be submitted last year.