# Middle East and North Africa (MENA): Key Economies and Oil Reserves Insights

![Middle East and North Africa (MENA): An acronym for the Middle East and North Africa.](https://www.investopedia.com/thmb/TezFERlMgyIGr7L4U5gc6CFyZfY=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Middle-east-and-north-africa-mena_final-92d306a11feb46db8b5c90aff7f01224.png)

*— Investopedia / Michela Buttignol*

## What Is MENA?

MENA, the Middle East and North Africa region, includes around 19 to 27 countries depending on the definition used. Rich in oil and natural gas, MENA is crucial to global energy and economic stability. While encompassing a diverse set of economies such as Saudi Arabia's oil-dependent landscape and Israel's high-tech hub, the region is pivotal for its geopolitical significance but faces challenges, including persistent conflicts.

### Key Takeaways

*   The MENA region encompasses around 21 countries, with vast oil, petroleum, and natural gas reserves, making it a key global economic resource.
*   Saudi Arabia, the largest economy in MENA, heavily relies on petroleum exports, contributing to approximately 90% of its export earnings.
*   Unlike many MENA countries, Israel's economy is driven by industrial manufacturing, diamond cutting, and high technology, positioning it as a leading high-tech ecosystem.
*   Despite its resource wealth, the MENA region is plagued by persistent conflicts and geopolitical tensions, which impact regional economic stability and development.
*   Several MENA economies are attempting to diversify beyond fossil fuel exports, with the United Arab Emirates and Qatar making strides in tech and financial sectors, respectively.

## Detailed Insights into the MENA Region

Many of the 13 OPEC nations are within the MENA region. The MENA region usually includes countries from Morocco in northwest Africa to Iran in southwest Asia, and down to Sudan in Africa.

The following countries are often included in the MENA region (not an exhaustive list): Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, Palestine, and Yemen.

> **Important**
>
> Facing a tough recovery due to COVID-19, economic growth in the MENA region fell by 3.8% in 2020 according to the World Bank.

## Major Economic Players in the MENA Region

### Kingdom of Saudi Arabia

Saudi Arabia, the largest economy in MENA, reported a GDP of $833 billion in 2021. The country is highly dependent on petroleum and natural gas, which provide some 90% of the country's export earnings.

Although it controls the world's second-largest proven oil reserves, Saudi Arabia has announced efforts to reduce its dependence on petroleum exports through investments in the technology and tourism sectors.

### Islamic Republic of Iran

Iran is the fifth-largest economy in the MENA region. Like Saudi Arabia, Iran's economy relies on petroleum exports, but it is more diversified than other oil exporters in the Middle East.

However, Iran is also subject to strict international economic sanctions as a state-sponsor of terrorism, a growing nuclear threat, and perpetrator of cyber intrusions against foreign countries. As a result, it is difficult for Iran's economy to boom. Iran's currency has greatly weakened and sanctions greatly restrict international trade.

### State of Israel

Israel had a GDP of $488 billion in 2021, making it the second-largest economy in MENA after Saudi Arabia. Unlike many of its neighbors, Israel is not an energy exporter; instead, the economy is largely centered around industrial manufacturing, diamond cutting, and high technology. In fact, Israel is ranked among the top-10 of global high-tech ecosystems. Israel has become world renowned as being the “start-up nation” and is the world leader for number of start-ups per capita.

Although it is a comparatively advanced industrial country with high average incomes and a strong currency, Israel's position has often been complicated by geopolitical conflicts with its neighbors.

### Egypt

With a 2020 GDP of $365 billion, Egypt represents the largest economy in North Africa as well as the third-largest economy in the MENA region. After President Hosni Mubarak was overthrown in 2011, Egypt's economy began significant market reforms, attracting investors and tackling unemployment. In addition to hydrocarbons, Egypt is a major exporter of textiles and agricultural products.

![Middle East Map](https://www.investopedia.com/thmb/Ue7Z-iohmw02Ayt76bcUucNgocE=/412x0/filters:no_upscale():max_bytes(150000):strip_icc()/middle_east_map-56a1f4775f9b58b7d0c514b9.jpg)

*Middle East Map.*

## Opportunities and Strategies for Investing in MENA

With more than half of the world's proven oil reserves, most investment opportunities in the MENA region are focused on the energy industries. There are many financial products allowing both retail and institutional investors to gain exposure to specific countries' oil and natural gas markets, as well as [ETFs](https://www.investopedia.com/terms/e/etf.asp) that target North Africa, the Middle East, or the MENA region as a whole.

Many MENA economies are shifting to reduce their dependence on fossil fuel exports. For example, the United Arab Emirates has a burgeoning [tech sector](https://www.investopedia.com/terms/g/gulf-tiger.asp), and Qatar is expanding into financial services.

There are currently no MENA-specific ETFs in the U.S. that encompass the entire region. Instead, there are several sub-regional or country-specific ETFs that American investors can access. These include:

Note that investors in other countries may have access to more and different MENA-specific funds.

### Fast Fact

There is no specific boundary for the Middle East, North Africa, or the MENA region as a whole. Borderline cases like Turkey, Afghanistan, and Sudan may or may not be included in the MENA region.

## Navigating Geopolitical Conflicts in the MENA Region

Due to the strategic importance of their oil reserves, countries in the MENA region have been affected by major local conflicts as well as interference by foreign powers.

Notably, the U.S. invasions of Iraq and Afghanistan caused major disruptions in regional economic activity, while the 2011 [Arab Spring](https://www.investopedia.com/articles/investing/051315/complex-story-global-impact-low-oil-prices.asp) protests caused a number of revolutions and civil wars, most notably in Libya and Syria, as well as what the World Bank described as "the biggest refugee crisis since World War II." Conflicts include Israeli-Palestinian clashes, wars in Syria, Yemen, Iraq, and Afghanistan, political instability in Lebanon, and a growing Iran-Saudi rivalry.

## What Does MENA Stand for?

MENA stands for the Middle East and Northern Africa, referring to the countries between Iran in the East and Tunisia and Morocco in the West.

## What Countries Are in the MENA Region?

There is no clear definition of which countries are included in the MENA Region, but it is typically considered to include at least Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, the United Arab Emirates, Palestine, and Yemen. Also sometimes included are Mauritania, Somalia, Sudan, Turkey, and Western Sahara, to name a few.

## What Are the Countries in the Middle East?

The Middle East is generally considered to include the countries on or near the Arabian Peninsula. According to the CIA World Factbook, the Middle East includes Armenia, Azerbaijan, Bahrain, Gaza Strip/Westbank, Georgia, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, and Yemen. Afghanistan and Pakistan are often grouped together with the Middle East, but they are not typically included in considerations of the MENA region.

## Which Countries Make up North Africa?

The countries of Northern Africa typically include Algeria, Egypt, Libya, Morocco, Sudan, Tunisia, and Western Sahara. This term may also be extended to include certain East African countries such as Djibouti and Somalia.

## The Bottom Line

The Middle East and North Africa (MENA) region is pivotal due to its vast [oil and natural gas reserves](https://www.investopedia.com/terms/o/oil-reserves.asp), holding more than half of the world's oil reserves and two-fifths of its natural gas reserves. This makes MENA a crucial player in the energy markets and offers significant investment opportunities, particularly in the oil and natural gas sectors.

However, the region is often marked by geopolitical instability, with conflicts in countries like Syria, Iraq, and Yemen, and external influences from global powers. While some economies in the region are diversifying, such as Saudi Arabia's move towards tech and tourism, and Israel's focus on high-tech industries, the ongoing conflicts remain a significant factor to consider for potential investors.

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