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