Six months of Iran-US war leaves Gulf states

Six months of war between Iran and the US have left Arab states facing tough questions about economic stability and regional security. The conflict began after surprise Israeli and US attacks on Iran on February 28, 2026.

Analysts agree the war will not lead to regime collapse in Tehran or a clear US victory, but instead has settled into a prolonged period of attrition and stagnation. Early hopes that economic and military pressure would force structural change in Iran have not materialised.

Oil-dependent economies are still absorbing supply shocks after traffic in the Strait of Hormuz slowed to a trickle of pre-war levels due to Iran’s attacks on shipping and a US blockade on Iranian ports. Shipments of oil, derivative products and liquefied natural gas have been repeatedly and severely disrupted since the attacks began.

The price of oil has increased broadly in line with Gulf states’ difficulties in exporting it, according to John Sfakianakis, chief economist at the Gulf Research Center. At the same time, inflation has risen, worsening economic pressures on Gulf states.

Gulf countries were already looking to diversify their economies and broaden defence partnerships beyond US security guarantees, as noted by Sanam Vakil of Chatham House. The war has accelerated these existing trends but not created new ones.

The US military remains entrenched in the region, which is still its most militarised in years. Although a memorandum of understanding was signed between Washington and Tehran in June, the war shows no sign of concluding, leading to continued uncertainty.

Existing tensions, such as those between Houthi rebels and Saudi Arabia in Yemen, are expected to increase as the war drags on. In July, the Iran-allied Houthis declared a naval blockade of Saudi Arabia, making transit through the Bab al-Mandeb Strait even more hazardous.

There is growing pressure for Gulf states to invest more in defence. The defence agreement between Turkiye, Pakistan and Saudi Arabia, recently signed in Mecca, is expected to be the first of many such military pacts in the region.

HA Hellyer of the Royal United Services Institute said Israel continues pursuing its regional project of "paramountcy" despite failing to bring Iran to its knees. He stated there is no chance of the Iranian government falling in the next six months, and that state collapse, if it occurs, would take years, not months.

For now, most states caught in the middle are focused on managing the turmoil and living with the consequences of the prolonged conflict.