Six‑Month Iran‑US Conflict Drags On, Leaving Gulf States in Economic and Security Limbo

The Iran conflict has settled into a protracted attritional phase, leaving Gulf economies in a state of mounting uncertainty and reshaping regional security alignments.

Analysts widely agree that the United States and Israel’s campaign against Iran will not result in the collapse of Tehran’s regime or a decisive Western victory, but rather evolve into a drawn‑out stalemate marked by attrition.

Initially, U.S. leaders hoped that intensified economic and military pressure would compel structural change in Tehran after the joint Israeli‑U.S. strikes on 28 February. Six months later, that expectation has faded, and governments across the Gulf are preparing for a long‑term conflict and its broader fallout.

Oil‑dependent Gulf economies continue to grapple with supply shocks as traffic through the Strait of Hormuz has dropped to near pre‑war levels following Iranian attacks on shipping and a U.S. blockade of Iranian ports.

The U.S. military remains heavily deployed in the region, its most militarised posture in years. While the intensity of hostilities has eased since a June memorandum of understanding between Washington and Tehran, there is no indication the war will end soon, sustaining a climate of uncertainty.

Pre‑existing tensions, such as those between Houthi rebels and Saudi Arabia in Yemen, are likely to deepen as the conflict drags on. Rival powers like India and China have not withdrawn influence; Beijing’s Belt and Road Initiative is already entrenched across the Middle East and North Africa. Formal alliances with external powers no longer guarantee safety, leaving the region in flux.

A newly signed defence pact among Turkey, Pakistan and Saudi Arabia in Mecca is expected to be the first of many similar military agreements in the region.

“The war has accelerated existing trends rather than creating new ones. Gulf states were already diversifying their economies and exploring broader defence partnerships beyond traditional U.S. security guarantees,” said Sanam Vakil, director of the Middle East and North Africa Programme at Chatham House, speaking to Al Jazeera. “Many are also boosting their indigenous defence capabilities.”

Israel continues to pursue its strategy of “paramountcy” in the region, according to H.A. Hellyer of the Royal United Services Institute, despite its inability to bring Iran to its knees this year.

“There is virtually no chance that Tehran’s government will fall within the next six months,” Hellyer told Al Jazeera. “If economic pressure were to continue unchecked, it could eventually trigger a cascade leading to state collapse, but that would likely take years rather than months, and conditions are unlikely to remain static.”

The effective closure of the Strait of Hormuz and strikes on regional cities have disrupted Gulf states’ plans to lever oil revenues into economic diversification and investor confidence.

Shipments of oil, refined products and liquefied natural gas have been repeatedly interrupted since the U.S. and Israel launched attacks on Iran in February.

Navigation through the Bab al‑Mandeb Strait, already hazardous due to Houthi attacks linked to the Gaza conflict, became even more dangerous in July when the Iran‑aligned Houthis declared a naval blockade against Saudi Arabia.

“The surge in oil prices mirrors the Gulf states’ export difficulties,” said John Sfakianakis, chief economist at the Gulf Research Center, to Al Jazeera. “Will this last six months, or become a longer‑term reality?”

Compounding Gulf challenges, rising oil prices have been accompanied by higher inflation, adding to economic strain. In addition to the war’s direct costs, Gulf governments face increasing pressure to expand defence spending.

For now, most states caught in the middle are focusing on managing the turmoil and mitigating its consequences.

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