Airstrikes on Iran resumed on July 8, after Tehran struck three tankers transiting the Strait of Hormuz. The United States hit more than 80 Iranian targets and reimposed a naval blockade. President Donald Trump declared the 60-day ceasefire and the June 17 memorandum of understanding with Iran “over.”
As of July 19, the U.S. had carried out at least eight waves of strikes, and in the more recent of them moved beyond military sites to hit bridges, an airport and power infrastructure inside Iran — the civilian targets Trump had previously threatened. Iran has also widened its retaliation. It struck a power and desalination plant in Kuwait, hit the Bahrain Petroleum Company (Bapco) oil refinery and on July 17 hit a military base in Jordan, killing two U.S. service members and leaving a third missing. Tehran also fired missiles at Saudi Arabia on July 13 and again at Prince Sultan Air Base on July 17, while the Islamic Revolutionary Guard Corps (IRGC) claimed its first strike on a U.S. command post in eastern Syria.
In Yemen, the Houthis launched their own missile barrage at Saudi Arabia after accusing Riyadh of bombing an airport under their control, ending a four-year truce. The widening Saudi front has drawn in Pakistan, which has warned Iran that any further attack on the kingdom, whether Iranian or Houthi, will be treated as an attack on Pakistan itself under the mutual defense agreement it signed with Riyadh last September.
Meanwhile, Vice President JD Vance has sharpened his public criticism of Israel over the course of the war. In a three-hour interview with Joe Rogan that aired on July 15 and 16, Vance accused elements within the Israeli government of running an influence campaign to shift American opinion and policy away from diplomacy, saying some officials want the war “to continue indefinitely” and citing a Time magazine report on funding tied to these efforts. In mid-June, around the signing of the ceasefire memorandum with Iran, he rebuked Israeli Cabinet ministers who criticized the deal, telling them, “You can’t just kill your way out of solving every single national security problem,” and warning them that in their shoes he would not be attacking “the only powerful ally that I have anywhere left in the entire world.” He separately faulted Israeli strikes on Beirut for killing civilians and jeopardizing diplomacy. In late March, according to Axios, he criticized Netanyahu directly for being overly optimistic about his predictions about the war’s trajectory. The remarks amount to an unusual and escalating rift between a sitting Republican vice president, widely seen as Trump’s political heir, and one of Washington’s closest allies.
These developments have undone much of the diplomacy that seemed to be progressing in June, when the ceasefire held and Washington was working to bring Israel and the Gulf states behind a settlement.
In late June, U.S. Secretary of State Marco Rubio made a three-day trip to the United Arab Emirates, Kuwait and Bahrain, intended as a reassurance and alignment tour that would secure Gulf Arab buy-in for the emerging U.S.-Iran framework while reaffirming American security commitments amid regional uncertainty. In a joint June 25 statement, the United States and the six-member Gulf Cooperation Council said that lasting peace would require addressing Iran’s ballistic missiles, drones and support for proxy groups, while also backing “free, unconditional, and unrestricted navigation” in the Strait of Hormuz without “any tolls, fees, or attempts to assert control.” On the same day, Unherd quoted Vance as saying, “the Emiratis — by far the most hawkish, by far the most pro-Israel country in the Gulf — they’re having conversations with the Iranians that have never happened before, including with the IRGC.” This came in the wake of a June 12 Reuters report about Abu Dhabi agreeing to unlock billions of dollars in Tehran-linked funds in exchange for a reduction in Iranian attacks and support for broader U.S.-backed stabilization talks.
There has been considerable discussion in the wake of the Iran war about the Gulf Arab states moving toward a durable accommodation with the Islamic Republic. Yet it is unlikely that Saudi Arabia, the United Arab Emirates, Qatar and other Gulf states will be able to sustain such an equilibrium in a form that is comprehensive or stable. More plausibly, these energy-exporting states will pursue strategies aimed at managing, rather than resolving, the Iranian challenge, particularly under conditions in which Iran can directly threaten them through missile and drone capabilities. Such an approach is consistent with the broader transformation of the regional strategic environment, in which the United States, Israel, Turkey and Pakistan are increasingly shaping a more fragmented balance of power.
The U.S.-Israel air campaign against Iran confirmed what the Gulf Arab states had long feared: that any large-scale conflict with Iran, regardless of its outcome, would exact an enormous cost on their own security, economies and political stability. Yet this reality underscores a long-standing strategic paradox: While the Gulf states have sought to constrain Iranian power through close alignment with the United States — and, more recently, through expanding security ties with Israel under the Abraham Accords — they have also understood that they would be the most exposed to Iranian retaliation. This tension was already evident in their deep unease over the 2015 nuclear agreement, which they feared would strengthen Iran economically without sufficiently curbing its regional ambitions, even as they recognized that the collapse of diplomacy could make war more likely. The result is a persistent strategic dilemma in which the Gulf Arab states seek both to contain Iran and to avoid becoming the principal battlefield in any confrontation with it.
The regional war triggered by the Hamas attack on Israel on Oct. 7, 2023, fundamentally complicated the Gulf Arab states’ strategic calculus, interrupting what had been a gradual trajectory toward deeper normalization with Israel. The Gulf monarchies initially viewed Israel’s campaign against Hamas and, later, its systematic degradation of Iran’s regional proxy network — including Hezbollah, which contributed to the collapse of the Assad regime — as broadly consistent with their own interest in weakening Tehran. These nations have long been threatened by Iran’s destabilization of the Arab world via armed proxies, its buildup of a ballistic missile arsenal and its pursuit of nuclear weapons. But they themselves lacked the means to counter the threat that had been growing until 2024, relying on the Americans and Israelis to deal with it.
That said, Israel’s military operations in Gaza, which killed tens of thousands, displaced nearly the entire population and left much of the territory in ruins, increasingly unsettled even its closest Arab partners. Apart from shock over the scale of the destruction and mass killings, the war has disrupted the UAE, Egypt and Jordan — Israel’s closest Arab partners — by straining the UAE’s Israel normalization, raising Egyptian fears of forced Palestinian displacement into Sinai that could threaten its treaty and security, and reviving Jordanian anxieties over becoming an “alternative homeland” and unrest tied to its large Palestinian population. Israeli military actions against the government of Ahmad al-Sharaa in Syria (which is backed by Saudi Arabia, Turkey, Qatar and the United States), and especially its September 2025 strike on Qatar, made it appear less as a valuable strategic partner than an increasingly assertive and unpredictable regional actor. As a result, Gulf Arab states now find themselves balancing not only the imperative of managing postwar Iran, but also the need to hedge against an Israel whose expanding military operations are seen as a key source of regional instability.
Further compounding Gulf Arab anxieties is the Trump administration’s emerging global geostrategy, which is replacing the post-World War II U.S.-led security order with one centered on burden-sharing and burden-shifting. Rather than serving as the primary guarantor of regional security, Washington increasingly expects allies and partners to assume the lead role in managing threats within their own neighborhoods, with the Middle East relying principally on Turkey and Saudi Arabia as its key Muslim powers. For Riyadh, however, this represents a profound strategic adjustment, because the kingdom has long depended on American military guarantees. Its decision to sign the Strategic Mutual Defense Agreement with Pakistan last September suggests an effort to acquire additional military capacity and strategic depth by drawing the South Asian nuclear power more directly into the Gulf’s security planning.
The strategic calculus of the Gulf Arab monarchies is further shaped by the increasingly open divergence between the United States and Israel over the desired end state in Iran. Although the war dramatically weakened the Islamic Republic, it fell well short of toppling the regime, and the Trump administration has consistently pursued a negotiated settlement centered on Iran’s nuclear program and curbing its long-standing strategy of exploiting the Palestinian issue and the broader Arab-Israeli conflict to undermine the regional security architecture. Israel, by contrast, has signaled a preference for maintaining sustained pressure on Tehran beyond a narrowly defined nuclear agreement. Israeli officials have repeatedly argued that the strategic opportunity created by the degradation of Iran’s regional position should be exploited to further weaken the Islamic Republic’s military capabilities rather than traded for a limited nuclear accord. This contrasts with the Trump administration’s apparent emphasis on securing verifiable nuclear restrictions, even if doing so leaves issues such as Iran’s ballistic missile arsenal and its long-term ability to regenerate its network of regional partners unresolved. For the Gulf Arab states, the implication is that any agreement — even one limited in scope — is likely to provide the Iranian regime with sufficient economic relief to survive, even as uncertainty over the future balance of power within Tehran and its regional posture remains exceptionally high.
The bottom line is that, regardless of the shape of any future regional order, the Arabian Peninsula states will have to contend with the enduring reality of sharing the Gulf with a more strategically consequential Iran. The war transformed what had long been a theoretical concern into an operational fact: Geography gives Tehran the ability to threaten Gulf infrastructure, population centers and military facilities through missiles and drones whenever it chooses to escalate. Over the medium to long term, the Gulf monarchies can reduce one of Iran’s principal sources of leverage by diversifying energy export routes and lessening their dependence on the Strait of Hormuz. By expanding pipelines, overland transport networks and alternative export terminals that bypass the strait, the Gulf monarchies can reduce this vulnerability, weakening Iran’s coercive leverage while enhancing the resilience of global energy markets. Over time, such diversification would shift the regional balance by depriving Tehran of one of its most potent tools of strategic coercion, making threats to disrupt maritime commerce increasingly costly and less effective as an instrument of statecraft, thereby diminishing the effectiveness of any future attempt to weaponize the waterway. Even so, no amount of infrastructure investment can alter geography, leaving the Arab states with the fundamental strategic challenge of devising a durable modus vivendi with their Persian neighbor without compromising their own security or strategic autonomy.
In many respects, the Gulf Arab states now face a strategic predicament analogous to that confronting the Central Asian republics following the Taliban’s return to power in Afghanistan in 2021. Led by Kazakhstan and Uzbekistan, the Central Asians have largely adopted a pragmatic policy of engagement with the Taliban — not out of affinity, but from the calculus that sustained economic ties and political dialogue are the best means of mitigating threats emanating from an unavoidable neighbor; Rather than attempting to isolate the new rulers in Afghanistan, Astana and Tashkent have steadily expanded diplomatic contacts, trade and infrastructure cooperation. Uzbekistan has pursued the proposed Trans-Afghan Railway to secure access to Pakistani ports while increasing electricity exports to Afghanistan, while Kazakhstan has resumed grain exports, hosted Taliban representatives and removed the movement from its terrorist list to facilitate commercial engagement. These policies reflect neither ideological endorsement nor formal recognition of the Taliban government, but rather the judgment that integrating Afghanistan into regional trade networks and maintaining open channels of communication offers the best prospect for containing cross-border militancy, managing migration pressures and preventing Afghanistan from once again becoming a source of regional instability.
For the Gulf monarchies, the logic is similar, even if the stakes are considerably higher given Iran’s vastly greater military capabilities and regional reach. This same logic helps explain why the Trump administration’s preliminary framework includes a proposed $300 billion reconstruction fund for Iran: economic stabilization is viewed not simply as an inducement for Tehran, but as an investment in a more manageable regional balance. Given their immense sovereign wealth, geographic proximity and overriding interest in preventing another devastating regional war, the Gulf Arab states are widely seen as the most plausible source of the outside capital that would underpin such an arrangement.
At first glance, the notion that the Gulf Arab states would finance the reconstruction of their principal regional adversary appears counterintuitive. Yet from their perspective, underwriting Iran’s economic reintegration may well be less costly than the continuation of a revolutionary state that relies on proxy warfare, missile proliferation and chronic regional instability. Just as postwar reconstruction has historically been used to transform former rivals into stakeholders in a new regional order, Gulf capital could be deployed not as an act of reconciliation but as a strategic instrument to bind Iran’s prosperity to regional stability. By making economic recovery contingent upon a change of course from Tehran, the Gulf monarchies would seek to replace a cycle of confrontation with one in which Iran has far more to lose from renewed aggression than it stands to gain. Military and economic pressure create the conditions for change, but reconstruction creates the incentive structure that makes behavioral change durable. The Gulf states are unlikely to write Iran a blank check. Rather, they would probably participate in a multilateral reconstruction mechanism — alongside the United States, Europe, international financial institutions, and perhaps even Asian stakeholders such as Japan and South Korea — in which financial assistance is phased, conditional and tied to verifiable changes in Iranian behavior.
Ultimately, the future security architecture of the Gulf will depend less on the precise contours of any agreement with Iran than on how the broader Middle East is reordered under the United States’ emerging grand strategy of regional burden-sharing. In that evolving framework, Turkey, Saudi Arabia and now Pakistan — supported by Qatar, the United Arab Emirates, Egypt and even Azerbaijan — will increasingly bear the responsibility for managing an Iran that is likely to undergo a prolonged and uncertain internal transformation. Doing so, however, will require these regional powers to first reconcile their own competing interests and develop a more coherent strategic framework capable of sustaining a stable balance of power, and, more importantly, forge a durable working relationship with Israel. In essence, these Arab and Muslim stakeholders will need to balance between the two principal warring parties.
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