The US-Iran Deal: What It Means for the Gulf

Summary

The US and Iran peace deal to end the military conflict in the Middle-East is a welcome development for the Gulf States. But they remain cautious and are eager to diversify their security alliance beyond America.

The US President Donald Trump and his Iranian counterpart, after a long wait, finally signed a Memorandum of Understanding (MoU) to formally end their military conflict. The MoU points out that both countries commit to negotiating and achieving the final deal in maximum 60 days, extendable with mutual consent and till then no military operation or use of force will be carried out on any allied nations of the both countries and Hormuz will remain fully open for the world.

This deal is one of the most important geopolitical developments in the Middle East since the 2015 nuclear deal. However, the deal is subject to further negotiations and is already having immediate effects as it is meant to reopen diplomatic ties and decrease the likelihood of a broader regional war. However, the deal is seen with mixed feelings by the Gulf States. Though they are relieved to see the war end, but also remain cautious.

The most important issue for the Gulf Cooperation Council (GCC) nations was not to side with either the US or Iran but to maintain stability, which was badly disrupted throughout the US-Iranian confrontation. The GCC countries especially Bahrain, Kuwait, Qatar and the UAE are those countries that had suffered massive economic and infrastructure damage. The war destroyed shipping lanes, endangered energy supplies, undermined investor confidence and exposed the Gulf’s infrastructure to Iran’s missile and drone attacks. The Strait of Hormuz, where almost one-fifth of the world’s oil flow moves, had become the epicentre of the global economic fears. Gulf capitals are satisfied with any measure that would help to ensure maritime security and reduce the possibility of a protracted military escalation.

But the accord has also underscored an uncomfortable reality for Gulf policymakers. It is that decisions made in Washington and Tehran will have a significant impact on their security. The war proved the failure of outside powers to provide the Gulf region with security assurances. The United States is the lead security player in the Gulf, but the crisis has led to a push for strategic diversification. The war has demonstrated that Gulf nations lack adequate defence systems and that their defence posture relies on other countries. Following this deal, policymakers in these nations will be eager to strengthen their defence capabilities, build up indigenous defence forces and also develop new alliances with emerging powers like China and India.

One of the many factors that have influenced Gulf perceptions is the apparent change in Washington’s negotiating stance. The Trump administration reportedly took Iran’s word for the conditions it was imposing, which were unacceptable before the outbreak of the war. Some of these conditions included the continued ability to enrich uranium in limited quantities and the gradual rollback of sanctions. Impatience with this has been expressed by critics as proof of the failure of military pressure to serve its goals. Rather, the deal seems to reflect the realities of economic compulsion an extended war.

A Gulf perspective on this is a mixed bag. Positive aspects include that sanctions relief might spur Iran’s economic reintegration and provide incentives for more positive regional action. Better economic prospects could reduce Tehran’s need to make its foreign policy confrontational. It is believed that this could be the opening for a new regional cooperation structure involving economic integration, energy interconnection and diplomatic dialogue.

However, there are still a number of concerns to address. Gulf nations still fear an economically powerful Iran that could again support regional proxy networks and increase its political sway in the Middle East. Gulf strategic thinking is still fresh with memories of previous Iranian military activism. Consequently, many policy makers are more likely to assess the agreement in terms of Tehran’s actions in Iraq, Lebanon, Syria and throughout the Gulf.

The post deal perception in the GCC nations underscores a very harsh yet important notion that it has led to the erosion of the trust for the Washington as the many in the GCC nations perceived US as a security guarantor in the region. These nations feel betrayed by the US policy shift from maximum pressure on Iran to leaving the battlefield on opponents’ condition. The rumoured Reconstruction plan corpus of $300 billion has fuelled displeasure among allies as they are reluctant to inject the funds for development of Iran that heavily damaged the infrastructure of these nations.

One issue that is very important in the crisis is economic resilience. The unrest surrounding the Strait of Hormuz has further reinforced the Gulf’s resolve to diversify its export channels and lessen the region’s reliance on any one seaway. Projects that require investments in infrastructure, cross-border railway lines, alternative pipeline systems and logistics corridors are likely to be further boosted. The energy security concept is no longer considered a national issue, but a regional strategic issue

The agreement also has implications for the Gulf diplomacy. Other nations, like Qatar and Oman, also had a significant role and mediated during the crisis. This has been part of a broader dynamic in which the Gulf States aim to become diplomatic brokers instead of ordinary spectators in the region’s conflicts. This can be seen as a pragmatic trend rather than influenced by ideology. One of the most important ideas that have come across the Gulf is now a multipolar region. The conflict illustrated the impact of the US, but also of China, Russia, Türkiye and middle powers. The Gulf States are increasingly viewing the need to build relationships with a range of actors around the world for their security and prosperity.

First, giving assurances to the people of Afghanistan only to abandon them to their fate and now in the context of the conflict with Iran, pushing allies into the fray while distancing oneself under the guise of a deal, reflects Trump’s impulsiveness, flawed strategic thinking, and policy-making approach. Regardless of the long-term consequences, in the near future, this MoU has established Iran as a strong pillar among Arab nations and as a country empowered both militarily and emotionally vis-à-vis Western powers.

Overall, the US-Iran pact is not a definitive deal, but rather a new chapter in regional politics. The agreement is a welcome step toward relieving immediate turbulence for the Gulf, but does not address the broader security architecture or regional tensions and power shifts. Whether the deal will lead to a durable peace or will be a short respite from mounting tensions will be determined by how Iran acts in the region and how much Middle Eastern nations are willing to help build a more comprehensive and sustainable regional paradigm of coexistence.

Disclaimer: Views expressed are of the author(s) and do not necessarily reflect the views of The Statecraft Institute.