By Mehran Haghirian

Diplomatic activity around the war on Iran intensified in late August after a period of stagnation, with Pakistani, Qatari, and Omani officials traveling to Tehran. But the U.S. attack on military installations on Larak Island on August 30 was followed by a wider resumption of fighting. The United States and Iran have since carried out their largest declared exchange of attacks on shipping since the war began, while Houthi attacks on Saudi Arabia have opened another front in the escalation. The possibility of a return to full war has increased even as diplomatic efforts continue.

Pakistani officials reported progress on ending the conflict and reopening the Strait of Hormuz following their visit to Tehran in late August. Subsequently, Qatar’s prime minister visited Tehran as well, with the intention of creating the conditions for renewed negotiations between Iran and the United States. Oman’s foreign minister also visited his counterpart in Iran and released a joint statement on plans for a temporary corridor through the Strait and short-term talks on a permanent route.

On the diplomatic front, all efforts continue to point back to the Memorandum of Understanding concluded by Iran and the United States on June 18. Pakistan and Qatar mediated that agreement, while the Iran–Oman discussions are tied to its fifth point. It remains the only agreed text covering military operations, the U.S. naval blockade, the future of Hormuz, Iran’s nuclear program, and sanctions relief. Negotiations have not resumed, and President Donald Trump said on August 27 that Washington was not talking to Tehran. The United States has shown no clear willingness to return to the June terms, while Iran remains steadfast in its insistence that the United States lift the blockade and return to the terms of the MoU before negotiations can continue. If Iran–U.S. diplomacy restarts, the MoU therefore remains the most likely point of departure.

The Iran–U.S. MoU, however, needs a complementary regional agreement to address the remaining issues that require the participation of regional countries. Such a regional MoU would also help make the Iran–U.S. agreement implementable. Point 5, on the future administration and maritime services of the Strait of Hormuz, requires a dialogue between Iran, Oman, and the other six regional states. Point 6, on reconstruction and economic development, also requires regional participation and support. Any return to the Iran–U.S. track should therefore be accompanied by a separate process among the eight littoral states. This process should be able to advance even if the resumption of the Iran–U.S. MoU is delayed or the agreement ultimately falters.

The U.S.-Israeli war on Iran, the Iranian attacks that followed across GCC states, the effects of the conflict in Iraq, and the renewed fighting between Saudi Arabia and the Houthis have involved all eight countries one way or another but in different ways. Each has followed its own path based on its geography, exposure to the conflict, external partnerships, domestic politics, and relations with the other seven. Oman is now a stakeholder rather than only a facilitator, and Qatar has been a key mediator along with Pakistan. Saudi Arabia has also been active diplomatically through the recent Makkah Joint Defense Agreement. Other GCC states have pursued different combinations of deterrence and diplomacy, while Iraq has faced its own pressures from military activity, economic constraints, armed groups, and foreign forces.

These differences will endure, but they do not prevent the eight countries from agreeing on some basic rules. The basis for a regional process is not new and has been considered on multiple occasions in the region’s history, particularly after conflicts. Paragraph 8 of UN Security Council Resolution 598, which ended the Iran–Iraq War in 1988, called for consultations among Iran, Iraq, and other states of the region on measures to enhance regional security and stability. Nearly four decades later, that part of the resolution remains unaddressed, reflecting the difficulty of structuring a process acceptable to all sides. Iran tried with the Hormuz Peace Endeavor, announced in 2019, while the GCC announced its Vision for Regional Security in 2024. Neither garnered meaningful support from the other side of the Gulf nor sufficient recognition and support from external actors.

There is a need for a multilateral arrangement that provides an institutional home for a process in which all eight countries, and perhaps also Yemen, have their own seat and say. Such an arrangement would complement existing blocs and partnerships, including the Makkah Agreement, and these arrangements can operate concentrically. All eight countries can agree on limited common rules while smaller groups adopt additional commitments where their interests align.

The starting point should be non-aggression and the avoidance of interference in one another’s affairs. All eight countries would commit to respecting one another’s sovereignty and territorial integrity; refraining from the threat or use of force; preventing their territory and facilities from being used to attack another participating state; refraining from supporting attacks by non-state armed groups; and protecting civilian populations and critical infrastructure.

The initial practical measure should be an eight-state deconfliction channel. During the war, governments used bilateral contacts to pass warnings, deny responsibility, and seek restraint. There was no common procedure for reacting to a missile or drone crossing several countries or to a maritime incident in the Gulf. Direct political, military, aviation, and maritime contacts could stop an incident from expanding before governments had established what had happened and react.

Economic cooperation should form the second layer, starting from the baseline already established before the recent conflicts. The immediate question is whether ports remain open, aircraft can fly, payments can be made, and food, medicine, and energy supplies can move during the current war or any future escalation. The regional MoU could identify the connections and critical infrastructure that should be protected.

The regional process should not wait for Iran and the United States to resolve every part of their dispute, or begin with a grand summit and a comprehensive security system.

The longer-term objective remains economic interdependence, while acknowledging that economic ties would develop gradually and concentrically, with some countries moving before others. If the Iran–U.S. MoU is restored, Washington will need to issue the licenses and waivers required for lawful regional trade and investment involving Iran. Regional states should identify those requirements based on the projects they want to pursue. If sanctions remain and the U.S. policy of treating Iran as an economic outcast intensifies, a regional MoU could give the eight states a framework for protecting their individual and collective interests, including food security, energy resilience, transport routes, and other areas threatened by the conflict.

The Strait of Hormuz is a place to test whether this approach can work. The August 25 Iran–Oman statement reiterates Point 5 of the Iran–U.S. MoU and calls for discussions with other regional states. Iran and Oman have legal and operational responsibilities in and around the Strait, but a permanent arrangement will also require the participation of the other six countries that depend on it.

Kuwait, Bahrain, and Qatar have no maritime route that bypasses Hormuz. Iraq’s principal commercial port access also passes through it. Saudi Arabia and the UAE have more alternatives, but their ports, exports, imports, and wider economies remain tied to safe passage in Hormuz.

A prolonged conflict would threaten the economic interests of all eight countries by reducing investor confidence across the Gulf and diminishing the importance of the Strait of Hormuz as a reliable commercial maritime route. This would affect Iran as much as, if not more than, the other seven countries.

In the longer term, these shared principles and pooled interests could be institutionalized through an eight-state body responsible for navigational information, incident notification, search and rescue, environmental monitoring, and oil-spill response. It could be a new organization or be established through an expanded mandate for the Regional Organization for the Protection of the Marine Environment (ROPME).

Such a body would also need funding. As Esfandyar Batmanghelidj and I have proposed, a small fee on large outbound oil tankers could pay for agreed maritime and environmental services. It would not be a toll or a charge for passage, and in this context the fee is secondary to the institution behind it. The purpose is to create a standing regional body through which the eight countries can manage services in a waterway on which they all depend, multilaterally and cooperatively.

The regional process should not wait for Iran and the United States to resolve every part of their dispute, nor should it begin with a summit and an attempt to create a comprehensive security system. The eight governments could appoint senior officials to a limited contact group, establish crisis channels, and open technical discussions on deconfliction, Hormuz, and essential economic connections. Türkiye, Pakistan, Egypt, China, India, European countries, and others could support the process, but the eight countries would negotiate the terms themselves.

The June MoU may still provide a way back to negotiations between Iran and the United States, but the wider regional conflict cannot be addressed through the Iran–U.S. track alone. A parallel regional agreement is needed and would serve a different, complementary purpose. Even if the eight countries are not ready to agree on a common regional order, they can agree on the conduct expected of all states, the mechanisms needed to prevent further escalation, and the connections that none of them can afford to lose.

Mehran Haghirian is the Executive Director of Research and Programs at the Bourse & Bazaar Foundation.

^{Section: (integrated-futures-initiative) Photo: Canva}

By Francesco Salesio Schiavi

When the Strait of Hormuz effectively shut to normal maritime traffic at the outset of the U.S.-Iran war in late February of this year, Middle East oil producers scrambled to find alternative trade routes. Oil producers that already had bypass infrastructure in place, such as Saudi Arabia with its pipeline to the Red Sea port of Yanbu or the UAE with its Habshan-Fujairah pipeline, adapted the fastest. Pipelines, however, can only move energy products. When it comes to bulk and container trade, encompassing economic mainstays such as food, fertilizer, machinery, and consumer goods, new solutions were needed. Regional countries turned to a long ignored mode of trade—trucking. Six months on, with no clear resolution to the Hormuz standoff in sight, trucking has emerged as a new and likely permanent layer of the transport infrastructure in the Middle East.

Across the region, demand for trucks has surged as port operators and liners rely on truck freight to establish new intermodal transport corridors. UAE hauler Trukker reported a 30% rise in full-truckload shipments between February and March as demand for truck freight surged. Another UAE firm, Ramool Transportation, announced that it had earned more in March alone than in all of 2025, a sign of how sharply rates have risen for operators able to put trucks on the road.

At Khor Fakkan, a container port on Sharjah’s Indian Ocean coast that used to handle little more than transshipment traffic, truck movements rose from just 100 vehicles per day before the war to roughly 8,500 by the end of July. In turn, weekly container throughput rose from about 8,000 to 65,000 TEU. The port’s operator, Gulftainer, hired more than 900 staff within a fortnight to cope and later committed $2 billion to lift annual capacity toward 10 million TEU within three years, accelerating development plans in response to the crisis.

DP World, the world’s largest port operator, is reportedly planning a multibillion-dollar investment to expand capacity at the Port of Fujairah, after activity at its flagship Jebel Ali port fell more than 90% during the initial weeks of the war. The company also acquired 700 new trucks in July to increase freight capacity. These trucks now carry containers from Fujairah roughly 250 kilometers through the Hajar Mountains to Dubai and Abu Dhabi, reducing operational dependence on transits through the Strait of Hormuz.

Global liners have also begun adjust routes to connect with the new truck freight corridors. Maersk has added land legs linking Khor Fakkan and Fujairah to the rest of the UAE and MSC has launched a multimodal service that uses trucks to forward containers across Saudi Arabia towards the Jeddah and King Abdullah ports. In June, CMA CGM announced a $400 million joint venture with Oman’s Asyad Group for the construction of a new terminal at Sohar as part of a second land-bridge to the UAE.

An increase in truck traffic extending east from Saudi Arabia’s Route 95, running through the Shaybah oilfield to Oman’s Ramlet Khelah crossing, has cut transit time between the two countries by 16 hours. Truck freight has become the main channel for Saudi-Omani trade, with the value of goods crossing there nearly tripling to $830 million within one month of the Iran war.

Earlier this month, Oman’s Arkan Logistics and Saudi Arabia’s SPARK Logistics signed an agreement formalize the route as a “Secure Green Land Corridor,” though neither side has disclosed target volumes or a timeline for operationalization. Meanwhile, Saudi Arabian Mining Company expanded its truck fleet from 600 to 3,500 vehicles in the early stages of the war to ensure a reliable flow of fertilizer to Red Sea ports.

In Iraq, tanker trucks have emerged as a vital lifeline for the country’s oil industry. Reducing loadings as the Basra terminals, which normally account for more than 90% of Iraq’s oil flow, has depressed export revenue. To compensate for these disruptions, Iraqi authorities established a new corridor through Syria, routing an estimated 2.1 million tonnes of fuel oil overland to the port of Baniyas since April via two reopened border crossings, under a plan initially set at 500,000 tonnes a month. Baniyas now unloads roughly 900 tanker trucks daily. The overland route is costly, but has allowed Iraq to maintain oil exports to customers in Spain, Egypt, and the United States, among others. The new route has also boosted customs revenue for Syria, with direct receipts estimated to have reached $25 million since April.

Overcoming Limits

The rapid expansion in truck freight across the region is coming up against commercial, infrastructural, political, and geographic limits. Commercial operators describe a persistent shortage of trucks and drivers as the main constraint, one they expect higher freight rates to spur investment in larger fleets.

Underinvestment in truck-related infrastructure has also created capacity constraints. Customs depots, weigh stations, rest stops, and warehouses are struggling to handle the surge in truck traffic. In Iraq, a lack of truck-loading facilities at the country’s southern oil fields continues to cap how much crude can be transported overland.

The increased movement of Emirati, Saudi, Omani, Iraqi, Syrian, and Turkish truckers through the region represents a new form of cultural encounter and exchange, stitching together countries that have long been disintegrated.

Political difficulties have also emerged. Since July, trucks crossing from the UAE into Saudi Arabia at the Al Batha border post have faced extensive delays with drivers reportedly sleeping under their trailers while cargo, ranging from building materials to fresh flowers, sits in customs limbo. Traders blame tensions between the Gulf’s two largest economies. Historically, low levels of intra-regional trade meant that customs harmonization and the administration of border crossings were not a political priority for Middle Eastern countries, undermining coordination during the recent crisis.

Finally, geography will limit the extent to which truck freight can compensate for the traditional maritime routes through the Strait of Hormuz. Westward routes from Fujairah, Khor Fakkan, and Sohar through Oman, the UAE, Saudi Arabia, and beyond are confronted by the vast Rub al-Khali desert, also known as the “Empty Quarter.” Moreover, because Iran’s coastline sits so close to these ports, insurers and carriers continue to treat the new routes as exposed to Iranian attacks. During the war, Iran has hit structures or vessels at all three ports.

Transformative Potential

While the shift to overland trade may face inherent limits, it will nonetheless prove transformative for the Gulf and the wider Middle East. As parallel can be drawn to the rise of European trucking in the years following the Second World War.

Postwar Europe’s shift from rail freight to road freight helped physically connect national markets in a way fixed rail corridors alone had not, as trucks began crossing onto the Mediterranean corridor linking Spain to Hungary, moving along the Rhine-Alpine axis between Rotterdam and northern Italy, and over the Brenner Pass on the Scandinavian-Mediterranean corridor. The increased dependence on truck freight led to the establishment of the European Union’s TEN-T road network in 1996, just three years after the formal establishment of the union.

But aside from political or infrastructural connections, the shift towards trucking also helped create cultural ties across the European continent. The movement of tens of thousands of trucks also meant that tens of thousands of drivers of different European nationalities traveled through countries they would never otherwise have visited. While the parallel is inexact, the increased movement of Emirati, Saudi, Omani, Iraqi, Syrian, and Turkish truckers through the region represents a new form of cultural encounter and exchange, stitching together countries that have long been disintegrated.

The Strait of Hormuz is likely to stay central to global energy flows for years and trucking will never suffice to reduce the dependence of Middle Eastern economies on maritime trade. But trucking has emerged as a transformative new layer of the region’s transport infrastructure and with it has come new avenues for economic, political, and cultural integration.

Francesco Schiavi is an Associate Fellow at the Bourse & Bazaar Foundation. He is an international relations specialist focused on security, defense, and governance in the Levant and the Gulf.

Section: (integrated-futures-initiative) Photo: DP World

By Mehran Haghirian

For years, policymakers in Washington and several Arab capitals discussed the possibility of creating an “Arab NATO.” The most developed proposal was the Middle East Strategic Alliance (MESA), promoted during the first Trump administration. It was intended to bring together the six Gulf Cooperation Council (GCC) states, Egypt, and Jordan in a security structure that would strengthen collective defense and, above all, contain Iran, at a time when security cooperation between several Arab states and Israel was expanding.

It never got very far. Egypt withdrew from the initiative in 2019, while the Qatar crisis and disagreements among the participating states made any meaningful collective-security arrangement increasingly difficult. What followed instead was a greater reliance on smaller “minilateral” arrangements between countries with more closely aligned interests, particularly Saudi Arabia, the United Arab Emirates (UAE), and Bahrain.

Nearly a decade later, amid a regional war, the idea of an Arab NATO has given way to a multiethnic NATO, bringing together Arabs, Turks, and Pakistanis through the Makkah Joint Defense Agreement signed on 7 August. Its central provision is very NATO-like. The pact stipulates that an armed attack against one of the three states will be regarded as an attack against all. The agreement is intended to strengthen collective deterrence and deepen defense cooperation and will have an institutional structure, including a ministerial committee and a permanent secretariat in Saudi Arabia.

Geography makes certain interpretations of the pact almost inevitable. Turkiye sits to Iran’s northwest, Pakistan to its east, and Saudi Arabia across the Persian Gulf to its southwest, and all three are Sunni-majority states. At a time when Iran remains at the center of a regional war, the emergence of an Arab-Turkish-Pakistani collective-defense arrangement can easily be presented as the anti-Iran alliance that MESA never managed to become. But that reading may be too narrow.

Unlike many earlier attempts at regional collective security, the exclusion of a specific regional player has not been built into the agreement as its organizing principle, and this distinction matters. The three governments themselves have refrained from defining the agreement as either a Sunni bloc or an alliance directed against Iran. Turkish Foreign Minister Hakan Fidan has explicitly said that it is not aimed at Iran or any other country. More importantly, he has said that the intention is not for the arrangement to remain limited to its three founding members. Recent reports suggest Iran was encouraged to endorse the Makkah Agreement by its founding members, but it has not yet formally done so.

Broadening Frameworks

The most immediate pathway for expansion is already visible through the R4—Saudi Arabia, Turkiye, Pakistan, and Egypt. The four countries have increasingly coordinated their regional diplomacy during the current conflict, not as a military grouping but as a diplomatic one. All four have direct security interests in the conflict, but they have also emerged as intermediaries capable of maintaining channels with different sides.

Pakistan has become a critical channel between Iran and the United States and has hosted and facilitated contacts between the two sides, including the negotiations leading to the Islamabad MoU. Turkiye has maintained intensive diplomatic and backchannel contacts with Iran, the United States, and the GCC states throughout the conflict and has reportedly stopped a ground invasion of Iran. Egypt had already assumed a more active role on the Iranian nuclear file before the war, particularly since the September 2025 Cairo agreement between Iran and the International Atomic Energy Agency.

On 5 August, just two days before the Makkah Agreement was signed, the four R4 foreign ministers held their fifth meeting since March. They called for continued diplomatic efforts and de-escalation, emphasized freedom of navigation through the Strait of Hormuz and Bab al-Mandab, and discussed strengthening and institutionalizing their coordination.

The overlap between these two arrangements is significant. Three members of the R4 are now also members of a collective-defense agreement, while the fourth, Egypt, has already been publicly identified as a possible future participant. While there is a heated debate as to why Egypt did not sign on to this pact in August, the same geopolitical tensions that prevented it create a political and diplomatic layer around the new defense arrangement that could facilitate its expansion.

The fact that the other GCC states are not among the initial signatories should also not be interpreted as their exclusion from this process. Oman and Qatar have been directly involved in mediation throughout the conflict and continue to play important roles in negotiations involving Iran and the United States. Bahrain, meanwhile, has publicly welcomed the Makkah Agreement and described it as an addition to the wider regional defense architecture that complements existing GCC collective-defense mechanisms.

The UAE is the more consequential case. It is simply too economically, militarily, and strategically important to remain outside any serious regional security architecture. Saudi Arabia and the UAE have developed increasingly visible differences over Yemen, Sudan, the Horn of Africa, and regional economic competition. But despite the tensions, they also remain deeply interconnected across security, economic, and political affairs. The UAE’s absence from the Makkah Agreement should therefore not automatically be interpreted as another Saudi-Emirati rupture. But it does raise an important question about where the agreement goes next.

If Saudi Arabia develops one security network with Turkiye and Pakistan while the UAE builds another around its own partnerships, particularly with Israel and India, and Iran remains tied to its own network of regional partners and proxies, the region could simply end up with another collection of competing blocs. That would reproduce the same fragmentation that has undermined previous attempts to establish a regional security framework. On the other hand, if the Makkah Agreement is designed as an expandable platform, the partnerships of individual countries could eventually become bridges into a broader architecture.

A wider architecture would have to work on a different basis as it cannot require countries to abandon their existing partnerships before joining a regional framework. Turkiye will remain a NATO member. Saudi Arabia and the other GCC states will continue to maintain extensive security relationships with the United States and European countries. The UAE, as well as Bahrain, will continue to develop its relationships with India and Israel. Pakistan will maintain its own strategic partnerships. The purpose of a regional architecture should not be to replace these relationships, but to establish common rules between regional states despite them.

The inclusion of Turkiye, Pakistan, and potentially Egypt also expands the scope of the discussion beyond the Gulf. For much of the past decade, proposals for regional dialogue have focused primarily on a GCC+2 format comprising the six GCC states, Iran, and Iraq. That remains an important foundation, particularly for matters directly affecting the Persian Gulf. But the current conflict has demonstrated the limitations of treating Gulf security in isolation from developments in the broader region.

The war has also accelerated a longer-term reassessment of the US role in Gulf security. Washington remains the principal external security partner for the GCC states, but it is increasingly viewed as an indispensable partner rather than a sufficient security guarantor, particularly after a war in which the Gulf states were exposed to direct Iranian attacks and even extensive US military deployments and defense systems could not fully protect their territories and critical infrastructure. This has strengthened the case for diversifying security partnerships and developing regional mechanisms that do not depend on Washington alone.

Saudi Arabia, as the convener of the agreement, and its post-war strategy of expanding its security and diplomatic relationships with other major regional states could therefore help widen the scope of dialogue. Egypt, Turkiye, and Pakistan each bring relationships, interests, and channels that differ considerably from those of the GCC states and their participation could also help break some of the deadlocks that have repeatedly constrained direct Arab-Iranian security dialogue.

Keeping the Door Open

Any regional system built permanently around containing Iran will produce Iranian counter-alliances and counter-deterrence rather than regional security. The experience of recent years, culminating in the current conflict, have made that clear. Iran cannot be removed from the geography of the region and will remain one of the largest states bordering the Persian Gulf, a major military power, and an important economic and political actor regardless of the nature of its government or the state of its relations with its neighbors.

At the same time, it would be unrealistic to imagine Iran simply joining the Makkah Agreement as it currently stands. Tehran is not going to enter a collective-defense structure under which an attack against Saudi Arabia, Turkiye, or Pakistan would automatically be treated as an attack against Iran. Cairo did not make this commitment within the newly established grouping either. The fact is that they do not need to.

A regional security architecture does not have to consist of a single military alliance containing every country. It can develop through concentric arrangements and the Makkah Agreement could remain an inner collective-defense arrangement between states prepared to make stronger military commitments to one another. Around it, a wider non-aggression and regional-security framework could gradually emerge involving Egypt, the other five GCC states, Iran, Iraq, and eventually other regional players, including Jordan, Lebanon, and Syria.

Europe provides an imperfect but useful precedent for such concentric arrangements. NATO has remained the collective-defense core for its members, while wider institutions and mechanisms have allowed countries outside the alliance to participate in broader systems of security cooperation, confidence-building, and non-aggression. The Helsinki process was built precisely on the understanding that competing alliances did not first have to disappear for adversaries to agree on rules governing their conduct toward one another. Tehran, Cairo, or Abu Dhabi would not have to join the Makkah defense pact to become part of the regional security architecture, just as states historically did not need to join NATO to participate in the broader European security order.

A regional security architecture does not have to consist of a single military alliance containing every country. It can develop through concentric arrangements.

The commitment would be different from the Makkah Agreement and an attack on one would not be an attack on all. Instead, the participating countries would commit not to attack one another, not to allow their territory to be used to launch attacks against another participating state, not to target civilian infrastructure, and not to disrupt the shared economic lifelines on which the region depends. Over time, such a framework could also address more difficult issues such as missile and drone deployments and other military activities that are particularly vulnerable to miscalculation.

If the objective is a genuine regional security architecture, the process cannot stop at either the Iranian or Israeli border. A system permanently designed to exclude Iran will fail, but so will one permanently designed to counter Israel. The eventual endpoint has to be an arrangement in which all regional states are bound by basic rules of non-aggression and regional conduct.

This is obviously not an immediate prospect. It could take a decade, two decades, or longer, and different countries would enter different parts of the architecture at different stages. But if the agreement remains an exclusive military alliance, it will become one more bloc in a region already full of them. On the other hand, the Makkah Agreement could become a whole new story by placing a military arrangement at the center without formally defining a regional state as the enemy, alongside a broader diplomatic mechanism that is already engaging competing sides.

Mehran Haghirian is the Executive Director of Research and Programs at the Bourse & Bazaar Foundation.

Section: (integrated-futures-initiative) Photo: Saudi Arabia Ministry of Foreign Affairs

By Anna Jordanová

On July 30, two tankers transferring oil from Russia’s Novorossiysk terminal through the Black Sea were hit by Ukrainian drones, adding to five earlier incidents that month. The vessels sustained limited damage, but the attacks deepened concerns conflict was spilling over into vital trade corridors.

Decades of infrastructure investment have stitched the Caspian Sea and Black Sea into a single transportation and energy corridor, linking East and West. Transit through the so-called “Middle Corridor” has emerged as an important alternative route for the delivery of both Central Asian energy and Chinese goods to Europe. This corridor, which avoids the sanctions pitfalls of logistics networks that pass through Russia and the Middle East, is also an economic and diplomatic lifeline for the states of Central Asia and the South Caucasus.

The “Middle Corridor,” officially known as the Trans-Caspian International Trade Route (TITR), has expanded significantly in recent years. The corridor is especially important for Uzbekistan and Kazakhstan, the two largest and fastest growing Central Asian economies.

Today, the corridor facilitates not just goods trade, but also green energy production, rare earths mining projects, financial services, and many other instances of trans-regional cooperation. Growth in the utilization of the corridor has been driven by new investment and policy reforms. Efforts are under way to improve legal harmonization and digitalization to speed up cross-border transit, while port and transport capacities are also being expanded.

Caspian littoral states are also expanding their merchant fleets, increasing capacity in the corridor while reducing dependence on Russian vessels. Turkmenistan has launched one new vessel this year and a second is under construction. Kazakhstan has announced plans to add six more ships. Azerbaijan, already boasting the largest Caspian fleet, is also promising further expansion. On the back of such investments, cargo volumes quintupled between 2018 and 2025, reaching just over 4 million tons per year.

Encroaching Conflict

Despite the strong commercial incentives for further investment, the development of the corridor linking the Caspian Sea and Black Sea is under threat due to encroaching conflict. According to data compiled by ACLED, more than 100 UAV attacks or sabotage incidents have been recorded in the Russian coastal areas of the Caspian Sea since 2025.

Kazakhstan, although far away from the Russian-Ukrainian frontlines, has reported more than a dozen cases of UAVs drifting into its territory since last year. Uncertainty also arises from the south, where the Iran war continues. A recent Ukrainian missile strike on an Iranian vessel traveling north in the Caspian Sea, allegedly carrying weapons from Iran to Russia, highlighted the risk that the two wars could merge.

Proximity to conflict zones is a growing challenge for countries across the Caspian region, especially given numerous chokepoints in key energy and transportation networks. The attacks on the Black Sea tankers were of particular concern for Kazakhstan, the largest and wealthiest Central Asian state. Around 80% of the country’s oil exports are routed through the Caspian Pipeline Consortium (CPC) pipeline, which originates at the Tengiz oil field and terminates at the Novorossiysk terminal. The attacks led to a pause in oil loadings at Novorossiysk. Loadings resumed in early August, but overall volumes fell 20% in July. A more protracted pause in loadings could impact production at the Tengiz fields.

Kazakhstan’s longstanding multivector foreign policy was crafted to help the country avoid getting embroiled in conflicts. By threatening no other states, it hoped not to be threatened in return. But this approach has proven insufficient to shield the country from collateral damage from the Russian-Ukrainian conflict.

Given the risks posed by Ukraine’s increasing targeting of Russian energy assets, it is understandable that Kazakh President Kassym-Jomart Tokayev recently urged Vladimir Putin to freeze military operations in Ukraine as soon as possible. On the other side of the battlelines, American Vice President JD Vance asked Ukrainian President Volodymyr Zelenskyy to halt the attacks on tankers loading at Novorossiysk—a reflection of the fact that American oil majors Chevron and ExxonMobile are the majority owners of the Tengiz field.

Much like how Gulf oil producers are dependent on the Strait of Hormuz, Kazakhstan is dependent on the CPC. Other routes, such as the Kazakhstan-China pipeline or the oil terminal in Batumi, Georgia, are either too distant from key customers or lack the necessary capacity. Just as its energy flows pass through Russian territory, so too does most of Kazakhstan’s goods trade. While the Middle Corridor has struggled to process more than 5 million tons of cargo, the so-called Northern Corridor, which utilized Russia’s railway network, processes nearly 20 times that cargo volume each year.

Uncertain Horizon

Despite diplomatic momentum and substantial infrastructure investment, the long-term horizon for the Middle Corridor remains unclear. Europe and China have strong economic motives to support the corridor, while Central Asian states continue to seek connectivity solutions to reduce dependence on Russia, especially as southern routes through Iran and Afghanistan remain unreliable. For now, Russia has tolerated the expansion of the Middle Corridor—the corridor’s good trade remains modest and energy exports continue to flow through Russian territory.

But the geopolitical pressures are mounting. Ukraine seems determined to continue defending itself at all costs; and even if Kyiv does not intend to target non‑Russian infrastructure around the Caspian and Black Seas, repeated incidents are changing the risk landscape for commercial operators. Trade through the Middle Corridor may become more expensive, more volatile, and more difficult to manage. There are also other challenges to consider, such as climate change. The Caspian Sea is shrinking and falling water levels are threatening port operations.

For Central Asia and the South Caucasus, the Caspian and Black Seas are an arena for trade, diplomatic relevance, and broader engagement with the world. Ultimately, while major powers shape the strategic environment, it is the regional states that must keep their shared corridor operating day-to-day and while safeguarding long-term viability. Their ability to do so will be a major test of diplomatic capacity and multivector foreign policies. The states of Central Asia and the South Caucasus will strive to remain economically connected without being drawn into the conflicts surrounding them.

Anna Jordanová is a former visiting fellow at Bourse & Bazaar Foundation. Her research examines Central Asian regional dynamics, regime security strategies, and relations with the West.

Section: (integrated-futures-initiative) Photo: Valentina Perfilyeva

By Esfandyar Batmanghelidj

Last week, the Financial Times published a major report that examined a new “truce” between the UAE and Iran, one that has spared Emirati cities and critical infrastructure from direct attacks even as Iran has sustained strikes on other Gulf states. According to the report, the deescalation began after direct contacts between senior Iranian and Emirati officials in mid-June. UAE officials pursued dialogue with Iran as part of a “suite of strategies to manage relations” in the face of ongoing instability in the region and the failure of the Trump administration to shield Gulf countries from the blowback of the U.S. and Israeli war.

According to a new Bloomberg report, the UAE managed to export more crude oil through the Strait of Hormuz than any other Gulf producer during the month of July. Several supertankers have managed to cross the strait without coming under attack from Iran after picking up oil from secondary terminals within the Persian Gulf, located at Zirku Island and Das Island. Smaller tankers have also crossed through the strait before undertaking ship-to-ship tankers off the coast of the UAE’s main oil terminal at Fujairah, located on the Gulf of Oman.

This uptick in UAE tanker traffic, which occurred before the recent progress in negotiations between Iran and Oman over a new traffic separation scheme in the strait, is a sign that what the Financial Times described as a “bold gamble” to seek a truce with Iran is paying off.

But what did Iran receive in return? Emirati officials continue to deny that any financial transfers were made to Iran. Reports that the UAE paid Iran “billions of dollars” to halt attacks are not credible. A large influx of hard currency would be immediately visible in Iran’s foreign exchange markets. In any case, Iran is unlikely to have asked for direct payment. During wartime, goods matter more than money. What Iran sought from the UAE were the logistical and financial channels necessary to procure those goods.

Over the last few weeks, UAE trade with Iran has accelerated. According to data from Kpler, over 50 container ships made the crossing between the UAE and Iran in July, approaching the pre-war tempo. These smaller container ships constitute feeder services between the Iranian ports of Bandar Lengeh and Bandar Abbas and the Emirati ports of Port Rashid and Jebel Ali, one of the world’s largest container ports. The ships arrive in the UAE mainly laden with fruits and vegetables and return to Iran carrying intermediate goods of critical importance for the Iranian industrial base.

Ironically, through the resumption of maritime trade with the UAE, Iran has indirectly benefited from Emirati efforts to bypass the Strait of Hormuz. The expansion of truck freight between the ports of Fujairah and Jebel Ali has given Iran a new corridor that can help compensate for the drop of container traffic through the strait itself, which stems from both Iran’s targeting of commercial vessels and the U.S. naval blockade.

The UAE has also helped Iran shore up its food security. Over the last week, at least eight bulk carriers have crossed the Strait of Hormuz and called at the port Bandar Imam Khomeini, Iran’s main terminal for soft commodities. These ships delivered grain and animal feed for the Iranian market, which depends on imports to meet the shortfall between food consumption and domestic agricultural output. The vessels are not owned by Iran—they are chartered from private fleets by the trading houses that sold the cargoes—and their safe transit would have been coordinated with Iranian authorities. But the UAE also played an important role in ensuring these essential commodities could reach Iran as the conflict with the U.S. persists.

Iranian imports of soft commodities are exempt from U.S. sanctions, but Iranian importers have historically struggled to access the dollar liquidity necessary to pay for cargoes. Iran was able to secure these cargoes by regaining access to dollar liquidity through the UAE financial system, an accommodation provided by Emirati authorities as part of deescalation efforts. This was an important reversal—Emirati authorities had instructed banks to block Iranian accounts in early March in retaliation for the first wave of Iranian drone and missile attacks on Dubai and Abu Dhabi.

The partial restoration of UAE-Iran logistics and financial channels cannot fully compensate for the significant disruptions caused by the continued closure of the Strait of Hormuz, which remains a major challenge for Iran, just as for the wider region. However, when considering the Trump administration’s hope that continued economic pressure and the naval blockade would leave Iran unable to sustain the war, the UAE appears to be directly undermining the U.S. strategy. Recent food deliveries and access to intermediate goods through the feeder trade will help stabilize the Iranian economy, at least for the coming weeks, forestalling a dramatic acceleration of the crisis in the country.

Some Western reporting on the UAE’s continued economic engagement with Iran has characterized the moves as a form of appeasement. But that is not what this trade represents.

Reports that Israeli Prime Minister Benjamin Netanyahu tried to convince President Trump to pursue a “land blockade” of Iran reflect this reality. The Israeli proposal would require convincing regional countries to close their border crossings (and ports) to Iran. But it is clear Iran’s neighbors will not take that step so long as their diplomatic outreach and economic engagements continue to offer a means of managing the insecurity created by the Trump administration’s oscillation between calls for a deal and threats of catastrophic airstrikes.

Some Western reporting on the UAE’s continued economic engagement with Iran has characterized the moves as a form of appeasement. But that is not what this trade represents. Rather, it is a reflection of the deep and long-standing interdependence between the the two countries. As the war dragged on, Emirati officials needed to mitigate harm to key parts of the economy, ranging from the oil industry to the tourism sector. Likewise, Iranian officials needed to restore critical supply chains, sustaining manufacturing output and safeguarding food security to maintain stability during the war.

Six months on, it is clear that the war has no military solution, only a diplomatic one. By restoring trade with its northern neighbor, the UAE is reprising the economic diplomacy and security coordination it first pursued with Iran beginning in 2019, when Trump’s “maximum pressure” campaign against the Islamic Republic first undermined the security environment in the Persian Gulf. Recognizing that the war will end with a negotiated outcome, Emirati officials are positioning themselves for the post-war settlement, restoring dialogue and rebuilding trust with Iran in a manner that will increase the UAE’s influence over Trump’s face-saving exit. Moreover, the UAE can better act to facilitate successful implementation of United States’ own economic commitments towards Iran, such as those outlined in the MOU signed in mid-June.

For now, Iran lacks the military means to decisively win the war and the UAE lacks the political influence to convince the Trump administration to end the fighting. Both countries have little choice but to wait until Trump and his advisors realize that it is in their best interest to simply walk away from this war. The wait could be long and Iran and its neighbors are facing acute pressures. It is therefore understandable that Iranian and Emirati officials would conclude that they should work together to outlast Trump.

Esfandyar Batmanghelidj is the Founder and CEO of the Bourse & Bazaar Foundation.

Section: (integrated-futures-initiative) Photo: Canva

By Esfandyar Batmanghelidj and Mehran Haghirian

Editor’s Note: This article was originally published on Friday. A full Persian-language translation of this article was published by Iran’s state news agency, IRNA, on Sunday.

This week Iran resumed attacks on commercial vessels passing through the Strait of Hormuz, targeting ships attempting to transit through a southern channel established by Oman in coordination with the International Maritime Organization and with the encouragement of the United States. The attacks have further weakened the already fragile Memorandum of Understanding signed between the U.S. and Iran on June 18. Iranian leaders believe that the Trump administration is seeking to reduce their negotiating leverage by enabling ships to transit through the strait without coordinating with Iran.

In Iran’s interpretation, Point 5 of the MOU grants them sole responsibility for restoring normal transit through the strait. But the same point also distinguishes between the transitional implementation period of 60-days and the longer-term framework. While it allows Iran to make arrangements for the safe passage of commercial vessels during the initial 60 days, it also explicitly requires Tehran to engage in dialogue with Oman to define the “future administration and maritime services” of the strait, in discussion with the other six Persian Gulf littoral states–Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates (UAE).

Iran and Oman have held numerous bilateral consultative meetings to discuss how to establish joint administration of the strait, but have yet to present a coherent plan. In an effort to head off the most maximalist Iranian demands, Omani officials have stated that the country “does not support the imposition of transit fees on vessels passing through the Strait of Hormuz” given that the “right of transit passage through straits used for international navigation is guaranteed under international law.” In this respect, the Omani position differs from the Iranian position, which insists that the strait lies in Iranian and Omani territorial waters.

Oman’s role in these sensitive negotiations is often misread. Trump threatened to “blow up” Oman and the U.S. Treasury Secretary threatened the country with economic sanctions over their perceived accommodation of Iran. But Oman has a direct interest in normalizing traffic through the strait, and has sought diplomacy and de-escalation with Iran, to prevent the maritime crisis from widening into a broader regional conflict. Oman’s economy, regional relationships, and diplomatic credibility depend on the uninterrupted flow of vessels through the strait. In dialogue with Iran, Oman is also representing the interests of the broader Gulf Cooperation Council (GCC), and arguably the international community.

Given the stakes, Oman’s negotiators are seeking a compromise solution with Iran. The fee may not be charged for transit through the strait, but it could be charged for other maritime services drawing “upon international best practices and successful experience in other strategically important maritime corridors.” Reports suggest that they are considering models such as voluntary fees charged in the Strait of Malacca or the fees charged by Turkiye of vessels passing between the Black Sea and the Mediterranean. These fees can support maritime services, including services related to safe navigation and environmental remediation.

Finding a workable model for administration of maritime traffic in the Strait of Hormuz will require careful consideration of what model will be politically viable, economically sensible, and technically feasible. There are a narrow range of options that could be acceptable to the eight littoral states in the Gulf and the broader international community. If the joint implementation of such an administrative model can serve as a platform to shore the ceasefire and strengthen regional diplomacy, its value would be obvious. In this respect, the creation of a “Hormuz fee” is not an attempt to impose new costs in a globally important chokepoint, but rather an opportunity to institutionalize the kind of positive-sum diplomacy that is necessary to protect that chokepoint from further disruptions.

Administrative Model

If fees are to be applied, a key consideration is which vessels would be charged. It would be counterproductive for Iran and its neighbors to impose fees that would increase incidental costs for imports. Even if nominal, such fees would ultimately be borne by consumers in the region as importers pass on the higher shipping costs. The fee could be focused on vessels exiting the Strait of Hormuz, which are carrying goods for export. But the broad imposition of such a fee would be a drag for regional exporters, especially non-oil manufacturers.

The logical target for any fees would be on the vessels exporting oil, gas, and related products. Given the enormous value of the exports and the nominal impact of a service fee, it would be straightforward to levy the fee on the large tankers that transport the vast majority of Gulf hydrocarbons to customers worldwide. Vessels would pay fees not for the right of transit through the strait, but rather in exchange for the services that enable their safe lifting of cargoes from Gulf ports.

All vessels calling at ports in the Gulf already pay port dues and service fees. The innovation of the administrative model would be to recognize that the Gulf ports are part of a regional maritime system, a kind of commons, which depends on the Strait of Hormuz. Establishing a surcharge that applies to any and all tankers lifting oil in the Gulf for export would be a step towards shared management of an important commons.

The imposition of the fee can be justified given the resources that all littoral states in the Gulf expend to manage the safe transit of Very Large Crude Carriers (VLCC) and Suezmax tankers and the environmental impact that such vessels have on the fragile coastal ecosystems of the Gulf. The shared nature of these burdens and the shared dependence on the strait also require that management of maritime traffic and the imposition of fees is administered by a multilateral body including all eight Persian Gulf littoral states.

In sum, the only viable “Hormuz fee” is one that is paid to a multilateral administrative body. The fee should be payable only by large tankers transporting oil and related products for export. The fee should also be associated with maritime services or environmental charges and must not contravene the freedom of transit through the Strait of Hormuz.

Estimating Revenue

There are around 900 operational VLCCs globally. Most of these vessels pick up oil or LNG from terminals in the Gulf at least once a year, even if they mainly operate in other regions. In order to estimate the likely revenue earned by the administrative body, we can say that there are roughly 600 VLCCs which will lift oil from a Gulf terminal each year. The true number is lower as some of the volume is handled by smaller Suezmax tankers.

To move the roughly 20 million barrels per day of crude oil and oil products that normally exit through the strait each year, these vessels need to make at least 2,000 lifts from Gulf oil terminals. If the service fee is payable each time a tanker lifts oil, there are 2,000 such payments that would be made each year. If the service fee is structured as an annual payment by each vessel, there would be 600 payments.

But what is the amount of the fee that needs to be paid? If the “Hormuz fee” is structured as a fee payable at each lifting, then the fee would need to be small. For example, the Port of Rotterdam charges tankers a “sustainability” fee of around $0.08 for each gross tonne. A VLCC can therefore expect to pay around $13,000 per call at Rotterdam. If a similar charge is levied at all ports in the Persian Gulf, on top of existing port-specific dues, the administrative body would earn $26,000,000 a year across the 2,000 liftings.

The fee would be higher if structured as an annual license that must be purchased for each vessel, but the increase in revenue would be modest. Even if the annual fee were as high as $100,000 per vessel, that would earn the administrative body a total of $60 million annually, when considering the approximately 600 VLCCs that might need to pay such a fee.

These are obviously tiny sums. The total value of the oil and oil products exported through the strait is around $600 billion per year, according to the International Energy Agency. Fees worth $60 million per year would represent an additional surcharge equivalent to just one-hundredth of a percent of the total value of the transported cargo. In this respect, the fees are economically meaningless. Vessel owners are also unlikely to care. As Greek shipping magnate Evangelos Marinakis, whose fleet includes more than 20 VLCCs, has stated, “it is better to pay a fee of $100,000 or $200,000, depending on the size of the cargo or the size of the vessel, than to have all this hassle.”

Iran could try and insist on higher fees, but it is unlikely that the final arrangements would differ significantly from the fee structures that are seen in other contexts. Even if the fees were much higher–say $1 million per vessel per year–the total revenue across the 600 VLCCs would still be one-tenth of a percent of the total value of the energy trade. Iran, like other littoral states in the Gulf, is too wealthy to actually need the marginal revenues on offer through a Hormuz fee. Clearly, the fees would neither harm the oil trade nor offer Iran or any other littoral state some undue windfall. Economically speaking, the idea of a “Hormuz fee” is a modest proposal.

Diplomatic Value

By contrast, the diplomatic value of the fee could be enormous. The suggestion that there exists some multilateral arrangement to manage the strait is inherently constructive. It represents an opportunity to institutionalize regional cooperation in ways that recognize the shared interests of all eight Gulf littoral states.

It is important to acknowledge that it would be perfectly normal for there to exist some kind of multilateral administration in the Strait of Hormuz. In fact, the absence of such arrangements is a historical anomaly, one that reflects the relative dysfunction of regional diplomacy in the Middle East. The Turkish Straits and Danish Straits are both governed by international conventions. The English Channel and the Strait of Malacca are managed through cooperative frameworks. The Strait of Hormuz has no such underlying legal status or cooperative arrangements because of the historic tensions in the region and the longstanding reliance on an external security guarantor, the United States.

A multilateral body already exists that includes all eight littoral states as members. The Regional Organization for the Protection of the Marine Environment (ROPME), was established in 1978 in Kuwait to institutionalize environmental cooperation in the Gulf. While its function has been limited to the management of environmental emergencies, there is clearly room to expand its mandate. ROPME could be revitalized for the purpose of addressing shared safety and environmental issues in the Strait of Hormuz and its expanded activities could be funded through the new fee. Alternatively, a new administrative body could be established. Whatever the approach, the institution that manages the fee matters more than the fee itself. It is the institution that helps regional countries move towards shared responsibility for a critical aspect of regional security and economic activity, building trust through its iterative operation.

The only viable “Hormuz fee” is one that is paid to a multilateral administrative body. The fee should be payable only by large tankers transporting oil and related products for export. The fee should also be associated with maritime services or environmental charges and must not contravene the freedom of transit through the Strait of Hormuz.

It is also important to note that several of the largest VLCC fleets are state-owned, such as Saudi Arabia’s Bahri and Iran’s NITC, which operate around 90 VLCCs between them. Should these fleets be made subject to a fee, it would offer a way to mutualize maritime services in the region. The revenues, if they reach the tens of millions, would offer a meaningful operational budget for any administrative body seeking to improve maritime safety or undertake environmental remediation in the Gulf. This would be a case of the region funding its own integration alongside the payments made by foreign vessel owners, and in turn, their customers.

When it comes to institutional arrangements that help break cycles of conflict, there are many historical antecedents. In 1950, the Schuman Declaration proposed that Franco-German “production of coal and steel as a whole be placed under a common High Authority, within the framework of an organization open to the participation of the other countries of Europe.” The joint administration of the Strait of Hormuz can be for the eight littoral states of the Gulf what the European Coal and Steel Community was for postwar Europe. It offers the opportunity to institutionalize regional cooperation over a critical modality of trade in ways that build trust and help foster greater regional cooperation.

Ultimately, Iran’s insistence on the fee is about far more than potential economic gains or safety or environmental concerns. Iran’s leaders want to restore the status of Iranian sovereignty and security in the wake of war by leveraging regional arrangements. At the same time, the majority of the GCC states are seeking a practical framework that would diminish the chances of another conflict breaking out in the region. Economic interdependence has become a key aspect of the post-war approach by the Qataris, the Omanis, and the Saudis. While Emirati leaders might appear apprehensive about the idea, they have the greatest level of economic engagement with Iran of any Gulf state. What was missing from past interactions was an institutionalized approach to economic integration that would have contributed to regional peace and security. A shared Hormuz fee can be the first step towards closer regional coordination, cooperation, and, eventually, integration.

The Gulf has developed into far more than simply an energy-producing region. It is a dense system of manufacturing sites, mobility corridors, logistics hubs, financial networks, and digital infrastructure that connect Asia, Africa, Europe, and the wider global economy. Much of this system is directly impacted by instability in the Strait of Hormuz. When movement through the strait is disrupted, the consequences are not confined to oil prices or naval calculations. Shipping costs rise, insurance becomes more expensive, cargoes are delayed, food systems are strained, industrial production falters, and governments far from the region are forced to respond.

In this sense, a collaborative approach in administering the Strait of Hormuz is a test. If regional countries, or Western governments, are unwilling to even consider the creation of a multilateral body to manage maritime issues in the strait or to consent to a nominal fee on vessels, it would signal that no genuine path towards deconfliction has been opened in the wake of the war. Rather than reject Iran’s idea of a new fee out of hand, regional powers and the broader international community should work towards the most constructive instantiation of the fee and its administration. Seen this way, a “Hormuz fee” is a small price to pay for a chance at peace.

Esfandyar Batmanghelidj is the Founder and CEO of the Bourse & Bazaar Foundation.

Mehran Haghirian is the Executive Director of Research and Programs at the Bourse & Bazaar Foundation.

Section: (integrated-futures-initiative) Photo: Canva

By Mehran Haghirian

Donald Trump’s meeting with Xi Jinping in Beijing was not supposed to be about Iran. But the war in the Gulf looms large over the Beijing summit. While the conflict did not displace trade, technology, Taiwan, critical minerals, or the wider U.S.-China rivalry, Trump arrived in Beijing needing Xi’s help over the thorny issue of Iran.

China could use its influence to end the war on Iran and the instability in the Gulf. China’s role matters because of its interfaces with nearly every part of this crisis. It is the guarantor of the 2023 Iran-Saudi agreement signed in Beijing. It has been engaged with Pakistan and others in mediation efforts since the war began. It has used its position at the United Nations to shape the multilateral response to the crisis. It is the foremost customer of energy from the Gulf Cooperation Council states and from Iran. Its firms, trading networks, and nationals have been affected by U.S. sanctions, the risks around the Strait of Hormuz, and the disruption caused by the war. Chinese officials have also put forward a political approach through Xi Jinping’s four-point proposal on peace and stability in the Middle East.

China’s actions should be understood in continuity with its expanded role in Gulf diplomacy since 2023. As the guarantor of the Iran-Saudi détente, Beijing has played a role in reducing tensions between Tehran and Riyadh over the past three years. Much of that role has remained outside public view, just as it did when the agreement was signed. In March 2023, China’s role became fully visible only at the final moment, when reports emerged shortly before the announcement that Iranian and Saudi security officials were in Beijing to finalize the deal.

China has for years spoken of transforming the Gulf into an “oasis of security.” The phrase reflects Beijing’s view that the Gulf should move toward an inclusive regional security arrangement.

A similar dynamic may be at work today. Not every consequential part of this diplomacy is announced as it happens. China approach has often centered on quiet engagement, creating space for regional parties to negotiate. Chinese officials presented the 2023 agreement between Iran and Saudi Arabia as part of a broader, yearslong effort to move the Gulf toward dialogue and away from confrontation. That logic has become more important since the war began in February.

The war has also shown the limits of the Iran-Saudi détente, pointing to lessons for Chinese policymakers as consider their next steps. The bilateral deal did not prevent direct confrontation. Saudi Arabia, like the UAE, attacked Iran directly during the war. Riyadh’s position, however, has remained different from Abu Dhabi’s in one important respect. Saudi Arabia has remained diplomatically engaged with the Islamic Republic. It could be argued that Saudi offensive action, combined with possible Chinese involvement behind the scenes, helped prevent the tit-for-tat from escalating further. Riyadh showed that it could respond militarily while keeping a political channel open.

That point matters for China’s role. The 2023 agreement did not produce complete reconciliation between Iran and Saudi Arabia. It did not entirely eliminate mistrust. But it preserved a channel at a moment when the region could have moved toward a wider and less manageable war.

China has for years spoken of transforming the Gulf into an “oasis of security.” The phrase reflects Beijing’s view that the Gulf should move toward an inclusive regional security arrangement. Since the outbreak of the war, China has tried to turn that language into a diplomatic strategy.

On March 31, China and Pakistan issued a five-point initiative for restoring peace and stability in the Gulf and the wider Middle East. It called for a ceasefire, de-escalation, dialogue and negotiation, protection of civilians, and the safeguarding of shipping lanes and energy facilities. The initiative mattered because it showed that China was already working with Pakistan and other in the newly formed quadrilateral that also included Turkey, Egypt, and Saudi Arabia.

Beijing then moved further in April, when during Xi Jinping’s meeting with the UAE’s Sheikh Khaled bin Mohamed bin Zayed, China put forward four propositions on peace and stability in the Middle East. Xi encouraged peaceful coexistence, national sovereignty, international rule of law, and a balance between development and security. Chinese officials have also signaled that China wants to play a role in establishing a new post-war regional architecture. This moved Beijing beyond ceasefire diplomacy and indicates Beijing’s desire to shape the political framework that follows after the war ends.

Beijing’s approach is shaped by its own interest. It wants to preserve influence with Iran, but it also wants strong ties with Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain. It wants to push back against U.S. pressure, but it does not want a regional war to threaten Chinese energy flows, investments, ports, shipping routes, and supply chains across the Gulf and the wider Global South. China’s support for Iran exists within these limits.

China’s conduct at the United Nations has also been telling. An earlier Bahrain-backed resolution attracted 135 co-sponsors, with China abstaining. A later Bahrain-backed resolution on shipping protection in the Strait of Hormuz was vetoed by China and Russia. Another draft is now under discussion and is likely to face the same obstacle. Chinese actions at the UN showed that Beijing was prepared to block a line backed by the United States and others when it believed the text was too one-sided against Iran or risked worsening the crisis.

The UN track shows that China’s posture is not detached neutrality. By vetoing the resolution and rejecting approaches it views as imbalanced, Beijing has made clear that it has its own view of how pressure on Iran should be handled, how maritime security should be framed, and how the Gulf crisis should be internationalized. China wants to remain central to the diplomatic process without allowing the Security Council to become a platform for one-sided coercion. Its diplomacy is helping set the boundaries of the war’s diplomatic track, which matters even more considering the personal relationship between Trump and Xi.

The Strait of Hormuz is where China’s influence and limits are clearest. Iran has reportedly allowed the transit of Chinese vessels, with around 30 ships, mostly Chinese, passing through the strait as Trump was in Beijing. Tehran may see this move as proof that it can regulate access to the waterway while rewarding friendly states. But China is unlikely to treat such arrangements as anything more than wartime exceptions. Beijing may accept practical accommodations to keep ships moving during the conflict. It will not want Iran to institutionalize a system in which Tehran decides who can pass, under what conditions, and at what cost.

Senior U.S. and Chinese officials have agreed that no country should be allowed to exact shipping tolls in the Strait of Hormuz. This is one of the rare areas where Washington and Beijing have found common ground during the war. For the United States, it is about pressuring Iran to give up its hostile actions around the strait. For China, it is about making sure the Hormuz does not become a tool of permanent Iranian leverage over global shipping and energy flows. Beijing may oppose U.S. coercion against Iran, but it also opposes any Iranian effort to turn wartime control into a standing regulatory order and pit Beijing against GCC capitals and the rest of the international community that expects Chinese action on this issue.

The nuclear dimension makes China even harder to ignore. If the endgame of this conflict eventually turns on what is to be done with the highly enriched uranium buried under the damaged Iranian nuclear site, China may be one of the very few countries with the technical and political capacity to matter directly, according to Trump. That question goes to the heart of any future arrangement on Iran’s nuclear file and it also raises the issue of which outside powers would be capable of helping implement a settlement, rather than only urging restraint from a distance.

Through the war, Russia and China became important to Iran not only diplomatically, but also operationally, through political cover, intelligence support, military-related assistance, and resistance to U.S. efforts to isolate Tehran completely. The exact balance of that support remains only partly visible in public, but the broader direction is clear. Iran did not confront this war in complete isolation. China and Russia formed part of the external environment that helped Tehran absorb pressure, avoid total strategic abandonment, and hit American targets and assets.

The sanctions issue makes this even clearer. In recent weeks, Washington has imposed new sanctions on people and companies involved in aiding Iranian oil shipments to China, including firms in Hong Kong, the UAE, and Oman. It has also sanctioned Chinese and Hong Kong entities linked to Iranian weapons procurement networks. China, for its part, invoked its anti-sanctions law for the first time to order firms not to comply with U.S. blacklisting of Chinese refiners over purchases of Iranian crude, although it partly reversed course afterward.

The U.S. moves demonstrated two things at once. Chinese firms are central enough to the Iran-related trade network to be targeted by Washington. But they are also important enough for Beijing to defend from external coercion. China will resist U.S. pressure where it can, but it will manage exposure when the costs become too high. There are clear limits to Chinese support for Iran. China has no interest in sacrificing its Gulf partnerships for Tehran. It will not welcome permanent instability in Hormuz or Iranian wartime regulations to become a normal feature of Gulf shipping. It also does not want U.S. sanctions on Chinese firms to expand to the point that Iran becomes a larger liability for Chinese companies, refiners, insurers, and banks.

China is the principal economic actor still tied to Iran while also being one of the most important external partners of the Gulf states. It buys energy from the region, trades across the region, invests within and with the region, and now faces direct American pressure because of those ties. China’s role is tied to the material structure of the Gulf. Energy, ports, shipping, insurance, investment, industrial supply chains, and critical minerals all connect the war to Beijing’s wider interests. A durable end to the war will have to take China’s interests and channels of influence into account.

China’s support of a regional non-aggression pact and a broader post-war security framework should be viewed within this context as well. A non-aggression framework would reduce risks to Chinese energy flows, infrastructure investments, trade networks, and political partnerships on both sides of the Gulf. It would also give Beijing a larger diplomatic role in a region where Washington has long dominated the security architecture but is growingly seen as unreliable.

Trump’s Beijing meeting was not a summit on Iran. But the war changed the context of the trip, delayed it, and made Iran one of the issues that had to be discussed. When Trump and Xi spoke about Iran, China entered the conversation as the guarantor of the 2023 Iran-Saudi détente, as the supporter of a diplomatic initiative with Pakistan, as the sponsor of a four-point political approach of its own, as a state signaling interest in a new post-war regional architecture, as a UN veto-holder that has already shaped the diplomatic track of the war, as the target of U.S. sanctions because of its ties to Iranian oil trade, and as a major power with direct economic and strategic interests in the future of the Gulf.

Beijing cannot impose peace on Iran, Saudi Arabia, the UAE, or the United States. It cannot make the nuclear file disappear. It cannot unilaterally guarantee maritime security. But China has enough weight with Iran, enough exposure to the Gulf, enough influence at the UN, enough leverage in oil markets, and enough interest in the post-war order to matter in any serious effort to end the war. To restore peace in the Gulf, Trump will need Chinese leadership.

Mehran Haghirian is the Director of Research and Programs at the Bourse & Bazaar Foundation. His work centers on conflict resolution and diplomacy, with a particular focus on the Persian Gulf region. Haghirian holds a PhD in Gulf Studies from Qatar University. He currently leads the Integrated Futures Initiative and the Rihla Initiative for Green Economic Growth.

Section: (integrated-futures-initiative) Photo: U.S. Department of State

By Mehran Haghiran and Jessica Obeid

A version of this article was originally published in French in Le Grand Continent.

The decision by Abu Dhabi to leave the Organization of Petroleum Exporting Countries (OPEC) is about more than energy policy. The move reflects a broader frustration with regional and international frameworks that no longer match how the United Arab Emirates sees its interests, both in the Gulf and beyond. The Iran war has brought that reassessment forward, not just for Abu Dhabi, but across the Gulf Cooperation Council (GCC) capitals, which largely share the same perceptions and predicaments.

The timing of the Emirati decision is central to understanding it. While the announcement comes as the war is paused, the ceasefire is uncertain and the Strait of Hormuz is effectively closed. The Gulf’s core systems are under pressure as shipping is disrupted, insurance costs have surged, energy flows are unstable, food cargo has been delayed, and aviation networks have been partially shut down. In this environment, coordination mechanisms that depend on stability have lost their meaning in the absence of meaningful action.

The region’s growing integration into global markets has created strength, but also vulnerability. Ports, airspace, desalination plants, financial systems, and supply chains are all part of the same ecosystem. Once disruption begins in one area, it spreads quickly.

Since the start of the conflict, Emirati officials have signaled a growing dissatisfaction with the institutions the country has long been part of. That includes not only OPEC, but also the GCC itself, the Arab League, and the Organization of Islamic Cooperation. The criticism has been consistent in that these platforms are not delivering, especially as the UAE has wanted to play a stronger role while its peers seek the same.

Energy Ambitions

For OPEC, the dissatisfaction runs way longer. The UAE has long been uncomfortable with constraints that do not reflect its capacity or ambitions. It has invested heavily in production and infrastructure and has pushed repeatedly for higher quotas within OPEC.

Since 2021, the UAE has consistently advocated for an unconditional increase in production, arguing that current market conditions justify higher supply. Over the medium term, it aims to raise output capacity to 5 million barrels per day (mbpd); around 1.5 mbpd above its current quota. This created a structural tension within OPEC, where production ceilings may constrain the UAE’s ability to fully utilize its planned capacity.

In the near term, output is effectively limited by reduced export capacity due to disruptions in the Strait of Hormuz. However, the UAE’s strategy is clearly forward-looking: positioning itself to capture a larger share of global markets once logistical constraints ease and production caps are revisited.

When conditions stabilize, the UAE will be able to increase production without being bound by OPEC limits. That matters in a market that is likely to remain volatile for some time. It also gives Abu Dhabi greater control over how it responds to shifts in demand and supply. This will likely trigger countermeasures from other producers, especially Saudi Arabia, further intensifying competition for market share.

The UAE is placing greater emphasis on control, flexibility, and direct management of its interests. That applies to partners, to institutions, and to adversaries.

There is also a precedent. Qatar left OPEC in 2018 during the blockade imposed by its GCC partners. That decision was not only about energy policy but it was about positioning. The UAE is now doing something similar, but in a far more consequential context. By doing so, it is also trying to shed light on a systemic crisis in the region and globally and demanding an international response or repercussion.

The war has introduced a level of uncertainty that makes flexibility more valuable than coordination. When flows through Hormuz are disrupted, when vessels hesitate to transit, and when insurance costs become prohibitive, the ability to adjust production quickly becomes more important than adherence to group quotas. For the UAE, this is not only a constraint to be removed but an opportunity to reposition itself.

UAE-Saudi Rift

The UAE’s move also needs to be understood in the context of its relationship with Saudi Arabia. The divergence between the two countries did not begin, or end, with the war. It has been building for nearly a decade and since 2016, the relationship has gradually shifted from alignment to competition. Vision 2030 and the UAE’s economic model are not complementary. They compete for the same capital, the same logistics role, the same talent, and the same position in the global economy.

Yemen made those differences visible earlier this year. What began as a joint military effort in 2015 evolved into a series of disagreements over objectives, partners, and outcomes in the decade that followed. That divergence is no longer tactical as heightened military conflict was seen just back in February. It reflects a broader difference in how each country approaches the regional order and its own role within it.

The war paused that tension for a short period but it obviously did not resolve it. If anything, it has brought it back into focus. The UAE’s decision to leave OPEC without consulting Saudi Arabia is part of that story. It signals a willingness to act independently on issues that were previously managed within a framework of coordination. That framework was fragile before the war, and this decision effectively broke it.

The decision creates a difficult moment for OPEC and for Saudi Arabia. OPEC has always relied on a degree of cohesion among its leading producers, and the UAE stood as the group’s fourth largest producer. That cohesion is now under strain. The UAE’s exit weakens the perception of unity and raises questions about how durable the current structure is under prolonged pressure. As of now, only Saudi Arabia and Kuwait are OPEC members from the GCC which now need to work more closely with Iran and Iraq.

Shifts Across the GCC

The broader question is whether the UAE’s move remains limited to OPEC or becomes part of a wider pattern. Abu Dhabi has already signaled that it is reassessing its position across multiple organizations. Other states in the region are also reviewing their options. The war has forced a reconsideration of how these multilateral frameworks, bilateral relationships, and foreign investments function, and whether they are worth maintaining in their current form.

But this is not a move toward isolation. The UAE is not configured for isolation as a policy option. Its economic model depends on openness. It relies on being a hub for trade, logistics, finance, aviation, and global movement. That will not change. All six GCC states are on the same boat.

What is changing is how they approach their relationships. The UAE is placing greater emphasis on control, flexibility, and direct management of its interests. That applies to partners, to institutions, and to adversaries. Even with Iran, the UAE is likely to maintain a managed relationship after the war. Managing relations does not require trust. It requires a clear understanding of interests and limits.

The same applies across the GCC. These states are not moving toward disengagement from the international community. Quite the opposite, but they are moving toward more selective engagement. There is now less assumption of alignment and more differentiation in how each state responds to the same set of pressures.

For years, the Gulf was often described as a bloc. That description was always incomplete and the war has made clear that each state is operating according to its own calculus. The UAE is moving earlier and more openly than others, but it is not alone in that direction. The decision to leave OPEC is one step in the process of reevaluating policy options and reflects a region that is no longer coordinating under a shared framework, but adjusting under pressure, each state in its own way and seeking to establish its agency within the international system.

Mehran Haghirian is the Director of Research and Programs at the Bourse & Bazaar Foundation. His work centers on conflict resolution and diplomacy, with a particular focus on the Persian Gulf region. Haghirian holds a PhD in Gulf Studies from Qatar University. He currently leads the Integrated Futures Initiative and the Rihla Initiative for Green Economic Growth.

Jessica Obeid is Founding Partner of New Energy Consult (Dubai) and a senior energy engineer and strategist with over 17 years of experience across the Middle East, Africa, and Europe. She has advised governments, the private sector, and multinational institutions in more than 40 countries, and has held roles at Chatham House, the Middle East Institute, SRMG Think, and the United Nations Development Programme, among others. Jessica is a Gulf Committee Member of the Rihla Initiative for Green Economic Growth.

Section: (integrated-futures-initiative) Photo: Government of Dubai Media Office

By Mehran Haghirian and Mohammed Baharoon

A version of this article was originally published in French in Le Grand Continent.

Beyond the tragedy, the US-Israeli attacks on Iran and the Iranian strikes targeting the Gulf states – which continued unabated from 28 February 2026 until the April 8 ceasefire – have starkly highlighted a glaring absence: the Gulf region fundamentally lacked any security architecture.

The semblance of order that existed before the outbreak of this war was based on a polarization of how the various states in the region perceived security and threats. On the one hand, the Iranian threat to the Gulf Cooperation Council (GCC) and, on the other, the US threat stemming from Washington’s presence in the region dictated a fragile balance based on deterrence, external protection and ad hoc, discreet diplomacy between Iran and the Arab states. This balance has ceased to exist.

The threat is no longer merely perceived: all sides of the Gulf were ablaze.

The question is no longer whether a new regional security framework is needed, but who the actors will be, how they will interact with one another, and whether this new architecture could be purely regional — or whether it needs to extend further.

Restoring Trust and Deterrence

The Iranian attacks have caused a profound rift in Tehran’s relations with the Arab states on the other side of the Gulf and have undermined the tentative trust that had begun to take root through regional diplomacy over the past five years. Rebuilding that trust will be difficult and will take time. Whatever political configuration emerges in Tehran after the war, restoring relations with the Gulf states will necessarily become one of the most important priorities of any future Iranian government’s foreign policy — even if this is a consideration that the Islamic Republic’s new leaders have, for the time being, set aside.

Before the war, expert discussions on the future of the regional security architecture in the Gulf — in which we were involved — focused primarily on the new national security matrix encompassing the domains of energy, food, health and environmental security.

The war will necessitate an even broader reassessment of the Gulf’s security arrangements. And this new analytical framework will not only address the capacity to repel attacks, but it will also have to address the issue of deterrence itself.

One possible consequence of this new paradigm would be to compel the Gulf to become a highly securitised region. The Gulf Cooperation Council will inevitably engage in collective security coordination in the short term, which could include pooling stocks of interceptors, investing in next-generation air defence systems, strengthening crisis communication mechanisms, or establishing security arrangements modelled on NATO mechanisms.

These efforts are likely to become a central feature of the region’s trajectory in the near future, particularly in the context of expanding military ties with a group of countries that have proven themselves to be reliable partners.

Geopolitics of Grand Coalitions

However, contrary to what might have been expected, the resumption of discussions on a strategic alliance in the Middle East bringing together the Gulf states, Israel and the United States may not be an automatic consequence of the war.

Whilst the Iranian attacks might have accelerated such a rapprochement, this is an option that the Gulf states have so far rejected and may continue to avoid, as it would place them in a state of permanent war with a regional neighbor. The GCC states are just as concerned about the Islamic Republic as they are about Israel’s respective regional ambitions — for both powers have shown that brutal military action is their preferred means of resolving disputes. Conversely, the Gulf Cooperation Council’s tradition of patience and strategic restraint means it does not believe that military power alone leads to stability.

In the Middle East, a new order, even after this war, would not mean a total withdrawal of the United States. Nor would it mean, for those with ties to Israel, a complete reversal of that relationship.

Rather, it would involve a careful adjustment aimed at establishing a security architecture that strengthens the autonomy and agency of each state by taking into account the complex network of geopolitical ties and interests.

At the same time, the war has highlighted just how closely the security and stability of the Gulf are linked to global strategic interests: any future regional framework will almost certainly involve external actors whose economic and military presence in the region is already deeply entrenched.

China’s role as a major importer of Gulf energy, a key player in global trade networks and a guarantor of the negotiated détente between Iran and Saudi Arabia ensures that Beijing has a direct interest in preserving maritime routes, energy infrastructure and political stability in the region. Russia, which has already put forward proposals for a collective security framework at the United Nations Security Council, may seek to re-engage as debates on regional security evolve. The European Union and the United Kingdom have also strengthened their strategic and economic engagement in the region. India, Japan, South Korea, Brazil and other countries also have growing interests in the stability of the Gulf.

The diplomatic response to Iran’s attack on member states of the Gulf Cooperation Council has been global — notably with UN Security Council Resolution 2817 demanding that Iran cease its attacks, which was co-sponsored by 135 countries. This resolution was paving the way for a global response that began to manifest itself in discussions aimed at forming an alliance or consortium to maintain freedom of navigation in the Strait of Hormuz.

The war has highlighted just how closely the security and stability of the Gulf are linked to global strategic interests: any future regional framework will almost certainly involve external actors whose economic and military presence in the region is already deeply entrenched.

Such frameworks could resemble initiatives similar to the global coalition in the war on terror — which would exacerbate military polarization in the region and lock both sides of the Gulf into long-term animosity that will almost certainly lead to further instability, chaos and global repercussions.

What the war has highlighted is not merely military vulnerability: it has revealed the limits of deterrence and diplomacy, as well as the fragility of food supplies, water desalination systems, airspace, maritime transport, logistics, digital infrastructure, banking reliability and tourism. A diplomatic resolution to the conflict could lay the foundations for an inclusive, realistic security framework rooted in regional cooperation. The first step, however, is to better understand the ends, not the means.

Ends Not Means

Previous proposals for dialogue, cooperation and regional security have all been rejected as insufficient.

Iran had proposed the “Hormuz Peace Endeavor.” Russia has repeatedly reiterated its idea of collective security. China has put forward the idea of transforming the region into an “oasis of security.” The Gulf Cooperation Council itself had presented the “GCC Vision for Regional Security in 2024,” which remains to this day the most comprehensive framework for cooperation in the region. Whilst none of these proposals attracted sufficient interest at the time, they all reflected a recognition that the existing order was inadequate. There has never been a serious collective effort to replace it. War now demands a change of course.

Before any meaningful de-escalation can take place, a new frame of reference will need to be established. Yesterday’s red lines have now been crossed and the region needs a collective vision of security that is not based on political consensus, but on overlapping national interests.

Without this, any de-escalation or diplomatic resolution of the conflict will merely delay the resurgence of tensions or war, without resolving the problems that have now resurfaced.

Deterrence will not be solely military in nature. It must be based on a network of interests that constitute lifelines for the region and on the realization that these — like the Strait of Hormuz — are also vital arteries for the entire world.

Amidst the barrage of missiles and drones, it was difficult to see these discussions making progress today. But ultimately, the means matter little: only the ends should guide our path towards the future.

Mehran Haghirian is the Director of Research and Programs at the Bourse & Bazaar Foundation. His upcoming book, Differentiating Foreign Policy Strategies in the Persian Gulf: The Decision-Making Calculus towards Iran, will be published by Springer in 2027.

Mohammed Baharoon is the director general of Dubai Public Policy Research Center (b’huth) in Dubai. He is also a founding member of the board of the Bussola Institute, a think tank in Brussels that focuses on the changing and emerging aspects of the partnership between the European Union and the Gulf Cooperation Council member states.

Section: (integrated-futures-initiative) Photo: Canva

By Mehran Haghirian and Abdullah Baabood

The Strait of Hormuz has always mattered, but rarely has that been as visible as it is today. For centuries, it has linked the Gulf to wider trading routes across Asia, Africa, and Europe. Today, a significant share of the world’s energy supplies and other commodities pass through this narrow stretch of water. When Hormuz is disrupted, the effects are not regional, but global, and they are felt quickly. It is for this reason that U.S. President Donald Trump has threatened to send Iran back to “stone ages” if it does not reopen the Strait.

What began as a military escalation between the United States, Israel, and Iran on February 28 is now spilling into the infrastructure that sustains global connectivity. Shipping routes are under pressure, insurance costs are rising, and commercial operators are hesitating. The Strait has not been formally closed, but it is no longer functioning normally. That distinction matters less than it once did. In practical terms, constraint can be as disruptive as closure.

Against this backdrop, recent talks between Iran and Oman are significant. As the Strait falls in shared Iranian and Omani waters, officials from both sides have met to discuss how to ensure the continued passage of vessels under current conditions. On the surface, this may appear as crisis management and an attempt to keep traffic moving and prevent further escalation. But it also raises a more fundamental question of who gets to shape the rules of access to one of the world’s most important waterways?

The talks with Iran are consistent with that approach. Oman is trying to reduce risk, keep communications open, and prevent escalation from spiraling further. But there are limits to what it can or will support. Oman’s interests are tied to the uninterrupted functioning of the Strait. Its economy depends on it. Its regional relationships depend on it. Its diplomatic credibility depends on it. Any arrangement that conditions or politicizes passage would put all of that at risk. Engagement, in this context, should not be mistaken for endorsement.

Tehran is exploring ways to exert greater control over transit, whether through coordination mechanisms, selective passage, or other forms of informal regulation. Even if presented as technical or temporary measures, such ideas carry wider implications. They suggest an Iranian attempt, however tentative, to redefine how the Strait operates for seven other countries who depend on it as well as the entire international community who relies on it.

But that is where the problem lies. The Strait of Hormuz is not something that can be reorganized through bilateral understandings, even between actors as central as Iran and Oman. It is, in every meaningful sense, an international waterway. Its openness is not just a legal principle; it is a practical necessity for the functioning of the global economy. Energy flows, supply chains, shipping networks, and financial systems all converge at this narrow point.

That reality places clear limits on what any one country, or even a small group of countries, can do. Efforts to impose new conditions on passage, whether formal or informal, are unlikely to hold. The number of stakeholders is simply too large, and their interests too deeply embedded. From Asian energy importers to European industries, the costs of disruption extend far beyond the Gulf. This is not a regional issue that can be managed quietly. It is a systemic one that inevitably draws in wider attention.

Diplomatic activity is picking up at the United Nations and by global leaders as conversations about maritime security are expanding beyond the region. Bahrain’s resolution demanding an end to Iranian actions in the Strait was co-sponsored by 135 countries. While another resolution was vetoed by China and Russia at the Security Council, there is a growing, if still cautious, recognition that freedom of navigation in the Strait cannot be left exposed to prolonged uncertainty or unilateral pressure.

Iran itself seemed to acknowledge this logic not long ago. In 2019, it proposed the Hormuz Peace Endeavor (HOPE), which rested on the idea that stability in the Strait requires collective responsibility. Its current actions are moving in the opposite direction.

This kind of ambiguity can be useful in the short term. It creates leverage without forcing a decisive confrontation. But it is not stable. Markets do not adapt well to prolonged uncertainty, and neither do supply chains. Over time, pressure builds-for clarity, for predictability, and ultimately for intervention.

The Strait of Hormuz is not something that can be reorganized through bilateral understandings, even between actors as central as Iran and Oman. It is, in every meaningful sense, an international waterway.

This is where Oman’s role becomes particularly important. Muscat has long positioned itself as a mediator with open channels to Iran while remaining closely connected to its GCC partners and the broader international community. Its approach is often described as neutral, but that can be misleading. It is not neutrality for its own sake; it is a strategy aimed at preserving stability in a difficult and unstable environment.

There is also a longer historical thread here. During the Iran-Iraq War, when tanker routes in the Gulf were under direct threat, Oman resisted efforts to frame regional security in purely confrontational terms. Sultan Qaboos understood that stability required coexistence, even among adversaries. During the Iran-Iraq War in 1984, Sultan Qaboos argued that “here in Muscat we do not believe it to be in the interest of security in the Gulf that Iran feels we intend to establish an Arab military pact that will always be hostile to it, or that we are about to form a joint force, whose main task is to fight Iran.” He further added that “there is no alternative to peaceful coexistence between Arabs and Persians in the end, and there is no alternative to a minimum of accord in the region.” That insight still holds.

Yet the current trajectory risks moving in a different direction. By raising the cost and risk of passage through Hormuz, Iran may be seeking to deter external involvement. In practice, it could have the opposite effect. The more the Strait becomes a source of sustained disruption, the more likely it is to attract broader international engagement and intervention. What begins as a regional pressure tactic can quickly become a global concern.

For the Gulf states, the implications are equally significant. Their preference for de-escalation and economic transformation is harder to sustain if their primary economic lifeline is directly threatened. At some point, restraint stops looking like prudence and starts looking like exposure.

That is the strategic paradox. Iran’s approach is designed to increase leverage but it risks triggering the internationalization of the conflict beyond control. Efforts to change the status quo and access to the Strait may ultimately lead to greater external involvement, be it through maritime coordination, naval presence, or more direct measures.

The Strait of Hormuz is too central to the global system to remain in prolonged uncertainty. It will remain an international waterway not simply because of legal norms, but because the world cannot function without it. The real question is how far the current disruption is allowed to go before that reality is enforced, and what the region looks like by the time that point is reached.

Mehran Haghirian is the Director of Research and Programs at the Bourse & Bazaar Foundation. His upcoming book, Differentiating Foreign Policy Strategies in the Persian Gulf: The Decision-Making Calculus towards Iran, will be published by Springer in 2027.

Abdullah Baabood is an Omani academic currently serving as the Chair of the State of Qatar for Islamic Area Studies at Waseda University, Tokyo, Japan.

Section: (integrated-futures-initiative) Photo: Canva

By Mehran Haghirian

The war unfolding now in the Persian Gulf has produced something more dire than just another episode of escalation between Iran and its Arab neighbors. It has created a rupture. For years, the region has lived through tensions, proxy confrontations, maritime incidents, sanctions, and diplomatic breakdowns without crossing into this kind of direct and sustained assault across the Gulf itself. That threshold has now been crossed. Aside from the collapse of the security architecture of the region, this is a rupture in how Iran is understood across the Gulf, and it will shape perceptions for years to come.

The Islamic Republic made the decision to turn the Gulf into a theater of war. This was not an improvised move. For more than three decades, it was understood that if Tehran faced what it perceived to be an existential threat, it might seek to set the Gulf on fire. The scenario was long contemplated, widely predicted, and yet rarely treated as probable. It is now the reality from which the region must begin to think about its future. Across much of the Gulf, Iran is now the “betrayer,” an “enemy,” and a “terrorist” state.

The region has experienced three Gulf wars in recent decades, but none came close to igniting all eight littoral shores simultaneously. Within hours of the escalation, the Islamic Republic attacked five of the six members of the Gulf Cooperation Council (GCC): Bahrain, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). By the second day, Oman had also been targeted. Cruise missiles, ballistic missiles, and drones struck across the region. Debris from intercepted missiles has fallen into residential neighborhoods. Civilian casualties have been recorded across Iran, Israel, Iraq, Kuwait, Bahrain, the UAE, and Oman.

Bitter Memories

Politically, the shock has been profound. Resentment toward Tehran is now visible in Gulf capitals and among the public. Memories of earlier attacks remain vivid. In 2016, scenes of Iranians storming the Saudi diplomatic facilities in Tehran and Mashhad. In 2019, tankers off the UAE coast were struck by limpet mines widely attributed to Iran. Later that year, drones and missiles attacked Saudi Aramco facilities at Abqaiq and Khurais. In January 2022, Houthi drones struck Abu Dhabi and Dubai, killing three people. None of those incidents, however, come close to the level of threat, shock, and anger generated by the present war. Leaders, citizens, and residents across the GCC are unlikely to forget the scenes of missiles over their cities, and the attacker.

Some GCC states, particularly Saudi Arabia, the UAE, and Bahrain, opposed the 2015 nuclear agreement between Iran and world powers largely because they feared an empowered Iran with closer ties to Washington. Those same countries were the primary supporters of Trump’s withdrawal from the agreement in 2018. The region’s calculus began to shift in 2021, after Gulf states were confronted more directly with the risks posed by the Islamic Republic and shifted strategy to contain it with diplomacy.

Despite tensions, the region moved toward dialogue. Gulf leaders pragmatically concluded that Iran could not simply be isolated and therefore had to be engaged. Oman has never severed ties with Iran. Qatar enhanced relations with Tehran as the 2017 blockade was imposed on it by some of the GCC states. Backchannel talks between Saudi Arabia and Iran continued for years before culminating in the 2023 rapprochement. The UAE and Kuwait also moved to reinstate diplomatic ties in 2022. Bahrain was about to finalize a détente with the Islamic Republic prior to the June 2025 war. What has now collapsed is not diplomacy itself, but the assumption that Gulf states might choose to engage Iran, even while it projects a threat.

Gulf reactions to the war would have been far more reactionary and extreme had there not been substantive and successful diplomacy in the preceding years. Gulf capitals remain cautious about allowing the war to expand further.

Gulf reactions to the war would have been far more reactionary and extreme had there not been substantive and successful diplomacy in the preceding years. Gulf capitals remain cautious about allowing the war to expand further. The region’s leaders understand that escalation will complicate efforts to restore stability in the region while maintaining a viable relationship with Iran. Even so, there are reports that the leaders of the UAE and Saudi Arabia are “pressing Trump in regular phone conversations to finish the job and destroy Iran’s military capabilities before moving on.” The UAE’s ambassador to Washington wrote in the Wall Street Journal that the international community “can’t let Iran hold the U.S., the UAE and the global economy hostage. A simple cease-fire is not enough.” On March 23, Bahrain drafted a UN resolution that would authorize the use of force to open the Strait of Hormuz.

Before the war, Saudi Foreign Minister Prince Faisal bin Farhan had emphasized the goal of closing the chapter of tensions with Iran. That chapter has now been reopened. Publicly, Gulf states remain cautious about aligning with Israel, despite the expansion of ties under the Abraham Accords and the dynamics that led to the current war. At the same time, overwhelming dependence on the U.S. has pushed several GCC states toward a degree of practical coordination that may deepen after the war.

Saudi Arabia, Qatar, and the UAE have downgraded diplomatic relations with Iran by expelling the military attaché and reducing embassy staff, though none have severed ties entirely. Qatar has arrested ten suspects linked to an Islamic Revolutionary Guards Corps cell operating in Doha, while the UAE has also detained individuals with links to the IRGC and Hezbollah. The UAE closed the Iranian hospital, university, school, and social club, and is considering freezing billions of dollars of Iranian assets, one of the few remaining channels through which Iran has access to foreign currency.

Durable Ties

However, the rupture is not yet permanent. Transnational ties, trade routes, migration patterns, family relations, and business networks that have connected Iran and the Arab states for decades, if not centuries, remain intact. They have been disrupted, in some cases severely, but they continue to exist beneath the level of interstate conflict. The Gulf remains a shared Arab-Iranian space.

An awareness of this shared space is reflected in the recognition among Gulf leaderships that a prolonged state of conflict is incompatible with their economic agendas and national visions. The shift toward diplomacy over the past five years was tied to a broader understanding that stability is a prerequisite for growth, investment, and long-term transformation. That calculation has not disappeared because of the war.

The war has also unfolded alongside a profound transformation inside Iran itself. The succession following the death of Ali Khamenei and the rise of his son, Mojtaba, have reopened longstanding questions about the legitimacy and future of the Islamic Republic. Whether the system consolidates or collapses, this moment will shape how Iran approaches the region, and how regional countries approach Iran, in the years ahead.

The trust deficit is no longer confined to governments. It now sits with the public. Across the Gulf, people watched missiles cross their skies, saw debris fall into their neighborhoods, and witnessed civilians killed in cities they consider among the safest in the world. That memory will not fade quickly, and it will shape how Iran is seen across the region for years to come.

There is a real risk that the actions of the Islamic Republic become indistinguishable, in the public imagination, from Iran itself. There is a recognition in the Gulf—sometimes explicit, sometimes implied—that what is unfolding is the result of decisions taken by a state that has long been disconnected from its own population. That distinction leaves open a narrow but important space for something other than complete breakdown. If the distinction collapses, the rupture created by this war will harden into something far more durable, making any future attempt at rebuilding relations significantly more difficult.

The Gulf’s relations with Iran have been ruptured and cannot be restored quickly. But the question is whether the underlying connections that have historically linked Iran and its Arab neighbors can endure long enough to serve as the basis for a new regional order. What survives after the war may ultimately matter more than what has been broken.

Mehran Haghirian is the Director of Research and Programmes at the Bourse & Bazaar Foundation. His work centers on conflict resolution and diplomacy, with a particular focus on the Persian Gulf region. Haghirian holds a PhD in Gulf Studies from Qatar University and a master’s degree in International Affairs from American University’s School of International Service in Washington, D.C.

Photo: Wikicommons

By Nikolay Khozhanov

The evolving global energy landscape can catalyse stronger ties between the Gulf Cooperation Council (GCC) states and the countries of Central Asia. Over the past fifteen years a cascade of disruptions has reshaped energy markets—beginning with the shale revolution, followed by the accelerated fourth energy transition, underinvestment in hydrocarbons, the COVID-19 pandemic, the war in Ukraine, and, most recently, the return of Donald Trump to the White House in 2025.

These overlapping shocks have reshaped the structure of global energy markets, causing their volatility and giving rise to several new defining trends. Uncertainty has become systemic, undermining the ability to predict market dynamics. Traditional trade flows have shifted: Russia has redirected energy exports to Asia and the Middle East, while the EU’s hydrocarbon phase-out and the US’s pivot towards energy exports have intensified competition for Asian markets. As a part of this strategic shift, the GCC countries had an opportunity to play a role in replacing the lost volumes of Russian hydrocarbons at the European market. While in 2021 the total import of mineral fuels from the GCC to the EU was worth €25.1 billion, in 2022 it peaked at €65.5 billion and remained high at €58.4 billion in 2023. By 2024, fuel made up over 75 percent of the EU’s total imports from the GCC region.

Simultaneously, global political and economic instability has slowed the decline of fossil fuels even as it accelerates the push for renewable energy sources. One of the major forces in this transition is China. No longer a passive participant, Beijing has emerged as both a top importer of Gulf hydrocarbons and a global leader in renewable technology exports. By the mid-2020s, Gulf producers supplied more than 40% of China’s crude oil imports. Saudi Arabia has consistently vied for the position of Beijing’s leading supplier, while Oman, the UAE, and Kuwait also rank among China’s key energy partners. At the same time, China has become indispensable for the Gulf’s renewable ambitions: Chinese firms play a dominant role in providing solar and wind equipment to the region. In 2022 and 2023, for example, the UAE sourced 99.1 percent and 98.8 percent of its solar modules from China, while Oman relied on Chinese imports for 78.6 percent and 83.5 percent of its modules in those years. This dual role has strengthened China’s position as a central energy pivot between Asia and the Middle East and opened doors for cooperation between China and GCC member states in third countries, including Central Asian republics.

Dual-Track Strategy

The Gulf states have responded to the energy markets upheaval with a dual-track strategy: protecting hydrocarbon revenues while advancing green transformation. On the defensive front, GCC producers are working through OPEC+ to stabilise markets and are maximising export capacity through efficiency gains—for example, by replacing domestic oil use with natural gas.

At the same time, energy producers across the Gulf region are engaging in mutually beneficial cooperation that extends beyond traditional alliances. This includes efforts to enhance each other’s export capabilities. For example, Kuwait is reducing domestic oil consumption—thereby freeing more crude for export—by importing LNG from Qatar, even at the apparent cost of greater energy dependence on a single supplier.

This practice extends beyond the region as well. GCC member states increasingly have the opportunity to invest in the downstream and upstream sectors of potential competitors outside of the Gulf. In doing so, they form new alliances and diversify future revenue streams, thus disincentivising potential competition among oil and gas producers.

On the “green” track, notable progress has also been made. To enhance the environmental image of their hydrocarbon exports, GCC countries are actively investing in carbon capture technologies and integrating renewables into oil and gas production and export processes. A distinct—albeit often controversial—component of this strategy is the development of “blue” and “green” hydrogen projects. Additionally, GCC investors are showing growing interest in overseas ventures related to renewable energy development, particularly in emerging supply chains for the components and materials essential to renewable generation and distribution.

Amid these dynamics, closer energy ties with Central Asia are emerging as a strategic extension of the GCC’s global ambitions. Both regions possess vast hydrocarbon reserves and share a rising commitment to renewable development. Their partnership is being formalised through high-level diplomacy—most notably the 2023 GCC-Central Asia Summit, which produced a joint action plan (2023-2027) focused among other things on energy, trade, and infrastructure.

The intersection of global energy realignment and regional ambition has opened a window of opportunity for enhanced Gulf-Central Asia energy cooperation.

Several specific areas of cooperation are gaining momentum. GCC countries are increasingly demonstrating interest in expanding into Central Asian energy sectors, including oil, gas and electric energy production. The UAE’s ADNOC is in discussions with Kazakhstan’s QazaqGaz regarding potential joint ventures, and with Turkmenistan’s Türkmengaz to co-develop the Galkynysh gas field. These moves align with Turkmenistan’s goal of reducing overdependence on China.

Through Dragon Oil, the UAE also holds a stake in offshore oil production in Turkmenistan. Meanwhile, Saudi Arabia’s ACWA Power is spearheading a $7.5 billion investment in Uzbekistan’s power infrastructure, including a 1.5 GW gas plant. In 2024, Qatar’s Nebras Power and Pearl Overseas expressed interest in building combined-cycle and hydroelectric plants in Kazakhstan.

Both regions are investing in alternative transport corridors to bypass traditional chokepoints, opening further avenues for mutual cooperation. Kazakhstan and Azerbaijan are advancing the Trans-Caspian “Middle Corridor,” with potential extensions to Gulf ports via Turkey and Iraq’s planned “Dry Canal.” This would establish a north–south energy axis, reducing both transit time and cost. GCC actors like DP World and AD Ports are already involved in developing logistics infrastructure at key Caspian ports like Aktau and Baku. The geopolitical role of Iran is also worth noting. Integrating Iran into regional transport corridors could significantly enhance trade flows between Central Asia and the Middle East.

At the same time, Kazakhstan and the UAE are operating tankers on the Caspian Sea to transport oil to Azerbaijan for onward shipment to Europe, partially bypassing Russian-controlled routes. The UAE and Saudi Arabia have also shown interest in ambitious cross-border infrastructure projects, including the Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline and the long-proposed Trans-Caspian gas pipeline to Europe.

On top of these efforts, the GCC-Central Asia cooperation could possibly enhance knowledge exchange and local capacity building. Several Gulf-funded energy projects in Central Asia are structured as joint ventures with local partners, facilitating the transfer of technical expertise and operational know-how. For example, the 1 GW wind farm in Kazakhstan—developed by the UAE’s Masdar in partnership with Qazaq Green Power and the Kazakhstan Investment Fund—ensures active participation by local engineers and firms in both construction and project management. There is also growing interest in academic cooperation, with institutions in both regions exploring joint programmes in petroleum engineering and renewable energy.

Finally, GCC and Central Asian producers also have potential for coordinating efforts at the policy level. Kazakhstan and Oman, alongside other GCC members, participate in OPEC+ arrangements aimed at stabilising global oil markets through coordinated output policies. This collaboration helps manage price volatility and supports market predictability amid growing geopolitical and economic uncertainty. Saudi Arabia’s Crown Prince Mohammed bin Salman has publicly advocated for deeper strategic coordination between the GCC and Central Asia to ensure long-term energy security at both regional and global levels.

Addressing Shared Challenges

Beyond production policy, shared challenges posed by the fourth energy transition can become another topic for discussion between the GCC and Central Asian States in the future. For instance, they can discuss a collective response to external regulatory pressures, such as the European Union’s Corporate Sustainability Due Diligence Directive (CS3D) which imposes new sustainability and transparency requirements on suppliers in global energy value chains. Coordinated action in this sphere could help producers in both regions adapt to evolving compliance standards and safeguard their access to European markets.

Despite this momentum, several barriers persist. Many initiatives remain in the early stages of implementation or even stagnate. Knowledge-sharing programs are limited in scope or entirely absent. Tensions within OPEC+ have also begun to surface, as evidenced by Kazakhstan’s 2025 statement prioritising national interests over quota compliance.

Geopolitically, Central Asia remains intertwined with Russian infrastructure. As of 2024, roughly 80 percent of Kazakh oil continues to transit through Russian pipelines, rendering Gulf investment politically sensitive. Simultaneously, China’s entrenched dominance in regional energy—via pipelines and Belt and Road Initiative (BRI) projects—restricts Gulf access and introduces competitive pressures.

Security risks also pose significant challenges. The TAPI pipeline remains stalled due to instability in Afghanistan. Although the Taliban has pledged to protect the project, lingering uncertainty continues to deter Gulf investors. Infrastructure constraints further complicate energy connectivity: Central Asia’s landlocked geography makes it reliant on third-party transit states. Key projects such as the Trans-Caspian Gas Pipeline remain unrealised, limiting Turkmenistan’s access to European markets.

Iran’s exclusion from regional transport plans—due to international sanctions—prevents fuller connectivity between Central Asia and the Gulf. Internally, Central Asian states grapple with regulatory and legal obstacles, including inconsistent frameworks and weak rule of law, which deter long-term foreign investment.

Nevertheless, the intersection of global energy realignment and regional ambition has opened a window of opportunity for enhanced Gulf-Central Asia energy cooperation. Both regions are resource-rich and seek economic diversification amid global volatility. Their growing collaboration spans investments, logistics, policy coordination, and knowledge exchange—laying the foundations for a potential Eurasian energy corridor.

Yet transforming this potential into a durable alliance will require sustained commitment, improved infrastructure, legal harmonisation, and careful geopolitical navigation. If successful, this partnership could reshape the energy geography of Eurasia and anchor both regions more securely within the global energy order.

Nikolay Kozhanov is Research Associate Professor at the Gulf Studies Center of Qatar University and Non-Resident Scholar at the Economics and Energy Program of the Middle East Institute.

Section: (integrated-futures-initiative) Photo: Canva