The Gulf Arab states are geographically on the subject of the websites of one of the global’s maximum devastating contemporary conflicts, together with Syria, Gaza, Lebanon, and Yemen. Regardless that a few of them have confronted assaults from the Houthis, they have been in large part spared important, power spillover assaults from Iran inside of their borders. All that modified on February 28, with the release of the US-Israeli warfare with Iran.
Iran retaliated via concentrated on Gulf Cooperation Council (GCC) international locations with about 83 % of its general missile and drone moves all over the struggle, with the United Arab Emirates (UAE) receiving probably the most assaults out of any nation, together with Israel. The surprise from the struggle and worries over long term moves threaten the sense of safety, prosperity, and alternative that Saudi Arabia and the UAE particularly have spent years and billions of bucks cultivating as they search to diversify their economies clear of oil. As an established investor within the area advised me: “The perception of the Gulf Arab states as safe havens in a tough region is shattered and will be challenging to reverse for some time. They likely will have a higher risk premium in the eyes of most investors and companies. I cannot see an outcome of the war that completely eliminates this reality—they have been exposed.”
A brand new safety paradox
Gulf states will have to now confront a paradox: They’re reliant on the USA for safety, and there is not any excellent choice. On the identical time, the movements the USA and Israel have taken on this struggle introduce new safety problems for Gulf states. There are two major situations going ahead:
The cease-fire holds. On this situation, the USA and Iran succeed in a framework deal addressing discrete problems, comparable to reopening the Strait of Hormuz. This is able to probably lengthen the cease-fire and result in extra complete negotiations.
The cease-fire breaks down. If the USA and Iran fail to succeed in a deal, this is able to lead to escalation, comparable to extra assaults at the GCC or moves on Iran’s power amenities.
Regardless of which situation happens, Gulf Arab states now face an unlimited panorama of recent safety and financial demanding situations.
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What’s going to the Gulf Arab states do?
They are going to push to make certain that the Strait of Hormuz isn’t managed via Iran and that the USA or Israel don’t undertake a coverage of periodic moves on Iran. If Iran controls the strait, this provides it a brand new monetary lifeline within the type of tolls that would general fifty billion greenbacks consistent with 12 months, and 80-95 % of the tolls would most likely be paid via the Gulf states, chopping into their oil earnings. If the USA or Israel undertake a “mow the grass” technique of periodic moves on Iran, this may imply a looming danger of struggle that may basically undermine GCC states’ safety and their industry style.
Other Gulf states will undertake other methods. Some could also be extra open to discussion and offers with Tehran whilst others might harden their stance. As an example, Oman congratulated the brand new Iranian ultimate chief and held a choice with Iran’s president in spite of coming underneath assault. Saudi Arabia has expelled some Iranian diplomats from the dominion, however it has now not closed its embassy in Tehran (not like the UAE). The UAE might take a harder-line method towards Iran as mentioned under.
They’re not going to turn into extra unified on account of this struggle. Some analysts have argued that this struggle will convey Saudi Arabia and the UAE nearer, however that isn’t most likely. The connection between the 2 states’ leaders is simply too frayed, their coverage disagreements in Yemen and Sudan stay, they are going to proceed to compete head-to-head in a couple of industry sectors, and now they may additionally take divergent approaches to responding to the Iran danger. The GCC states might now additionally compete with every different to refill US-made defensive guns, which can be in brief provide globally.
Regardless that there was some dialogue about growing joint, native protection capacities, any effort to expand a NATO-like alliance a few of the GCC states isn’t more likely to get off the bottom as a result of each Saudi Arabia and the UAE would wish to lead it and neither would settle for the opposite as head.
Gulf Arab states won’t wish to basically pull clear of the USA. Regional governments have pledged some two trillion greenbacks in US funding, whilst additionally prioritizing nearer ties to US President Donald Trump, from making an investment in circle of relatives companies to gifting a luxurious aircraft for presidential use. All this paintings to comfortable as much as Trump didn’t yield a veto over the present struggle, however GCC states might nonetheless attempt to pull nearer to the USA within the aftermath, comparable to thru purchasing extra defensive guns techniques and carrying out extra bilateral joint coaching and safety integration. The struggle has proven the reliability and superb efficiency of US era, and Gulf Arab states will view get entry to to this apparatus as necessary for his or her safety.
The UAE and Saudi Arabia particularly may additionally attempt to affect the USA’ coverage method towards each Israel and Iran. The leaders of Saudi Arabia and the UAE have a observe report of influencing Trump’s coverage selections within the area together with on Syria, get entry to to complicated US synthetic intelligence (AI) chips, and Sudan.
Gulf Arab states will proceed to have shut financial relationships with China, however will wish to steer clear of crossing US redlines comparable to permitting China to construct army bases, as a result of they are going to now not wish to jeopardize their get entry to to state of the art AI chips or US army apparatus and cooperation. Studies that Iran used Chinese language satellites to find US bases in GCC international locations and that China may ship guns to Iran are a reminder of the boundaries of any partnership with China in comparison to what the USA provides.
Saudi Arabia might emerge from the warfare with a need to reinforce ties with now not simply the USA but in addition with Pakistan and Turkey. Pakistan has performed a shockingly a very powerful function in facilitating negotiations with Iran, and Saudi Arabia this month stated it is going to supply 3 billion greenbacks to lend a hand Pakistan repay its debt to the UAE. Saudi Arabia has a protection pact with Pakistan, however that didn’t forestall Iran from launching assaults on Saudi Arabia, appearing the minimum deterrence price of such accords except they’re noticed as credible. Turkey, in the meantime, is hoping to make six billion greenbacks in protection gross sales to Saudi Arabia.
How the UAE might diverge from its neighbors
The UAE might undertake probably the most important coverage adjustments because of this struggle. Geographic proximity most probably performed a job in why it sustained probably the most Iranian assaults, however a much more likely clarification is the UAE’s dominance within the area as a world monetary, industry, transit, and tourism hub, in addition to its participation within the Abraham Accords with Israel. Iran most likely sought after to shatter the sense of protection within the UAE to cool international funding and tourism.
After in search of to toughen diplomatic family members over the last few years, the UAE has hit a brand new low level of distrust with Iran. UAE President Sheikh Mohamed bin Zayed Al Nahyan, referred to as MBZ, referred to as Iran an “enemy” in March. The UAE closed its embassy in Iran and withdrew all diplomatic workforce the day after the struggle started and has additionally closed Iranian establishments throughout the UAE, comparable to faculties and cultural facilities. The UAE additionally stated it will give a contribution to army efforts to reopen the Strait of Hormuz.
The assaults at the UAE had been so important and so publicized that it’ll must paintings the toughest out of all of the GCC states to rebuild investor consider and draw in tourism. This may increasingly most likely want to be achieved thru a mix of army spending, enhanced defensive missile and drone features, investments in new defensive applied sciences, and the hardening of commercial and civilian objectives, together with possibly striking knowledge facilities underground.
If a long-lasting and complete cease-fire is completed or if Iran ultimately embarks on a special, extra sure trail someday, that would accelerate the timeline for the UAE’s—and the entire area’s—a lot hoped-for financial restoration.
Stefanie Hausheer Ali is an Atlantic Council nonresident fellow and a senior director at world affairs consulting company Rice, Hadley, Gates & Manuel LLC. The ideas on this article represents the perspectives and critiques of the creator and does now not essentially constitute the perspectives or critiques of Rice, Hadley, Gates & Manuel LLC.
Additional studying
Symbol: An individual stands subsequent to a motorbike as smoke rises within the Fujairah oil business zone following a hearth brought about via particles after interception of a drone via air defenses, in line with the Fujairah media place of business, amid the U.S.-Israel warfare with Iran, in Fujairah, United Arab Emirates, March 3, 2026. (REUTERS/Amr Alfiky)
