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Whoever wins the Iranian election will have to engage in sustained diplomatic fence-mending. President Mahmoud Ahmadinejad’s apparently thoughtless way with words has cost Iran dear over the past three and a half years. This month, Foreign Minister Manouchehr Mottaki has been in Riyadh – where he met King Abdullah Bin Abdelaziz – and Manama, seeking to patch up the latest strains in relationships with Saudi Arabia and Bahrain. He also visited Kuwait, with whom Tehran’s dealings are rather more placid.

Sheikh Nasser Mohammed is suffering a political realignment, with the Islamic Constitutional Movement’s move from cabinet to grilling sponsor reflecting an erosion of support for his government.

The confrontations in the Kuwaiti political system reflect a fundamental flaw in its structure: the National Assembly is freely elected, but the parliament’s changing composition, after each election, is not mirrored by a shift in the balance of forces within the cabinet.

The Islamic Constitutional Movement is the voice of mainstream organised moderate Sunni Islamism in Kuwait. Although it has attempted to push government policy in a more conservative direction on social issues - such as the separation of university classes for men and women - the group has steered a centrist and measured course on economic matters, combining traditional Islamist welfare concerns with a broad acceptance of the case for phased economic liberalisation

Global Investment House has “a pipeline of assets to sell in private deals” over the next few months as it seeks out much-needed cash to repay $3.1bn of liabilities, the Kuwait-based bank’s account executive Altamash Javed told GSN during the Hedge Funds World conference in Dubai on 10 March.

The government on 24 February said it was looking at ways to reduce the cost of two big power generation contracts concluded in 2008 with Siemens (to supply and install 16 gas turbines in a €1.5bn deal) and General Electric

Central Bank of Kuwait governor Sheikh Salem Abdelaziz Al-Sabah was very bullish, going so far as to say that the “crisis has not hit it that much.”

In a fast-evolving regional situation, French President Nicolas Sarkozy is touring the Gulf again, visiting Oman, Bahrain and Kuwait

Iraq’s border areas are a wild frontier, marked by intense mafia activity and low-level tribal violence. But the security situation is becoming more manageable than seemed likely even one year ago.

Russia’s Gazprom has made a deal with Kuwait’s Noor Financial Investment Company to set up a joint venture targeting exploration and production work in Russia and the Middle East. The signing of a bilateral agreement on civil nuclear co-operation with George W Bush’s administration prior to the Republican president’s departure from office has raised some eyebrows in the United States, for fear that it will spark a ‘nuclear arms race’ in the region.

With unsubstantiated rumours of a potential bid for Liverpool FC splashed across the UK newspapers, and a new deal to work with Gazprom, Kuwait’s prominent Al-Kharafi family is receiving more attention than usual.

Five country ratification is the first hurdle. Policy and structural detail will have to follow soon if markets are to take the GCC’s monetary union plan seriously.

Kuwait and Iraq have signed their first formal military agreement since the 1990-91 occupation, as both countries build up their coastal security.

Following weeks of negotiations and delays – which prompted talks of a walkout by parliamentarians and fresh grilling threats against the prime minister – Kuwait has a new government, albeit one with only two new faces. Many MPs have responded angrily to what is in effect a minor reshuffle rather than a new government, with 12 parliamentarians staging a walkout at the National Assembly ceremony to swear in the new cabinet.

The breakdown of the deal between The Dow Chemical Company and Petrochemical Industries Company – in which the Kuwaiti state-owned PIC would take a 50% stake in the United States’ largest chemicals group for around $9bn in return for the Americans developing the emirate’s downstream value-added via the KDow joint venture – is unsurprising.