Iran War Threatens the Economies of Trump’s Gulf Allies

The freshly renewed conflict continues to stymie efforts by Saudi Arabia, Qatar and the U.A.E. to expand their non-oil revenue and global reach.

President Donald Trump meets Saudi Arabia's Crown Prince Mohammed bin Salman in the Oval Office.

President Donald Trump meets with Saudi Arabia’s Crown Prince Mohammed bin Salman in the Oval Office last fall. (Evan Vucci/AP)

The U.S. and Iran have resumed military strikes — trapping America’s partners in the Middle East in volatility that could hurt their economies for years to come.

U.S. Central Command on Sunday launched the first American strikes on Iranian forces in more than a month, saying the targets posed “an imminent threat” to civilian shipping through the Strait of Hormuz. Tehran launched retaliatory missiles at American forces in Jordan hours later. The renewed violence came after the Trump administration had argued it was weakening Iran’s grip on the strait and bolstering energy shipments through the crucial waterway by deploying U.S. naval forces. The administration has also applied unprecedented sanction pressure on the country, which led analysts to predict Iran would retaliate. Now, experts believe that the potential for tit-for-tat strikes will continue even if all-out conflict is avoided.

“Both sides are now settling in for a long U.S.-Iran war,” Richard Fontaine of the Center for a New American Security think tank wrote on X. “The best bet now is on a protracted economic contest, enforced largely but not exclusively through military means.”