Yves here. We thought that one way that the war in Iran could suddenly start to go to a solution would be a division between the Gulf states and maybe some refused to be good workers. You realize, given the current complete lack of overlap in the negotiation space, any non-incremental shifts would be useful. As Satyajit Das says below, it has become abundantly clear that Israel is America’s pet in the region and in short, all others are of little importance. And he suggests that the US may try the Ukrainian solution of trying to get out and dump the dirt on its poodles. But even if that does not provide for the resolution of the Strait of Hormuz outtrade, and Iran will not be about to release its power and the US calls repeatedly and loudly that is not acceptable.
Alternatively, and the only way to slow down the US enough to force change, is for the other Gulf states to accept that survival requires them to come to terms with Iran, however grudgingly.
Richard Pape gives an overriding opinion about the Gulf states, that they are no longer functioning in the same way as the US is no longer an anchor, but is fragmenting.
By Satyajit Das, former banker and author of many derivative technical works and several mainstream titles: Traders, Guns & Money: Knowns and Unknowns in the Wonderful World of Derivatives (2006 and 2010), Extreme Money: Masters of the Universe and the Cult of Risk (201 – 16 and 20116) and Aqued Aqued (2011) 2021). His latest book on ecotourism – Wild Quests: Journeys into Ecotourism and the Future for Animals (2024). This is an edited version of a clip originally published in the book New print edition of Indian Express.
Israel’s war of choice with the US against Iran is reshaping the ever-flammable energy markets and the Persian Gulf. Other concerts may appear. Israel’s goal is to undermine and weaken Iran and its Arab neighbors to allow them to take over Palestinian land and establish Judea and Samaria. The US will choose its targets after it has declared “victory”, its involvement reminiscent of its disastrous post-WW2 support for the French colonial agenda in Indochina.
With so many allies killed in airstrikes, Iran’s Revolutionary Guards have become increasingly powerful. Their aim is to eliminate the present threat of the Islamic Republic. To avoid ongoing wars as Israel occasionally “cuts the grass” as in Lebanon, Iranian demands include the withdrawal of US bases and personnel in the region and security guarantees, written down by credible powers. They are seeking financial compensation, new plans for the Straits of Hormuz including a possible settlement structure and the lifting of sanctions, and the release of between $100 and $120 billion in frozen assets.
The role of the Gulf Cooperation Council (GCC) States (Saudi Arabia, UAE, Qatar, Kuwait, Bahrein, Oman) may be moderate.
Mainly the Sunni Muslim GCC are in a self-inflicted trap. Despite the ban on brotherhood, the GCC’s goal has been a weak Iran that cannot dominate the region. They rely on US “protection” which allows US military bases in their territories. The reigning monarchies have deep economic ties to America. They are major investors, through their sovereign wealth funds, in Western assets and their petrodollars help maintain the US reserve currency. Other GCC members had normal relations with Israel under the Abrahamic covenants.
Since the start of the unrest, Iran’s strategy of wiretapping the GCC countries has been designed to undermine these plans. It has launched strikes on US bases participating in the military campaign even though the relevant states do not recognize US and Israeli use of their land or airspace. In parallel, the targeting of GCC energy supplies, restricting transit through the Straits of Hormuz, and closing airspace are designed to disrupt their economies. Along with energy consumers, the strategy hurts GCC states that rely on energy exports, some of which are already financially strapped. It echoes i Game of Thrones: “If we are new. You are burning with us.”
The GCC finds itself faced with an absurd choice. It could join the US and Israel and retaliate militarily against Iran. Israeli Prime Minister Netanyahu wants to open the land front. The Arab Gulf countries are as important to any campaign as they are to the Iraq wars. This could give America the off-ramp it wants, allowing a transition from active participation to a profitable business of supplying weapons as happened in Ukraine by making that European conflict. The US recently approved a $16.5 billion arms sale to the Gulf states. Alternatively, the GCC could reach an accommodation with Iraq accepting neutrality, dismantling US bases, agreeing to financing, and joint control of key shipping channels.
Each option has problems. Aligning with the US-Israel axis will anger the people of the Gulf, sympathizing with Iran and Palestine. It may signal the end of unpopular and tyrannical rulers. Engaging with Iran would conflict with their Western allies who have a greater interest in ensuring the flow and cost of energy supplies.
Several background factors affect the choice. There is widespread resentment of hypocritical American and Western support for Israel. There are doubts about the nature of America’s security guarantee. Khalaf al-Habtoor, a prominent Emirati businessman, spoke for many in a social media post targeting Trump. “Direct question: Who gave you the authority to drag our region into war with #Iran? And on what basis did you make this risky decision?…Did you calculate the collateral damage before pulling the trigger?Pointing out that the Gulf states were being asked to pay for the reconstruction of Gaza and support the “Peace Board”, he asked “they were financing peace or financing a war that endangered the area?”
Republican Senator Lindsey Graham, a staunch supporter of President Trump and advocate of war, doubts Saudi Arabia’s refusal to join military operations against Iran. The GCC seems to mistakenly believe that American bases were protecting them and not that they were protecting the American people. Given Iran’s staunch resistance (which comes as no surprise to anyone with a passing knowledge of Shia history), the US-Israeli aura of invincibility has diminished. Monarchies have long realized that giving up your security leaves you exposed to the adversary. Now they are afraid of plans to change the regime led by the US against them and the confiscation of their wealth especially overseas.
The GCC itself is also divided. The UAE and Saudi Arabia have long-standing differences over oil production levels. Emiratis want to export at very high levels to monetize goods to finance the new post-oil economy. Saudi control over the OPEC exit agreements has long been vexed, leading to the UAE’s decision to leave the cartel. Saudi Arabia implemented the embargo on Qatar between 2017 and 2021 in retaliation for Doha’s alleged support for extremist groups and ties to Iran. While the 2021 Al-Ula Declaration led to the re-opening of borders and the re-establishment of diplomatic ties, relations remain fragile.
Whatever they choose, the decision will have far-reaching consequences, possibly escalating the conflict. If the GCC aligns with the US and Israel, it will create long-term regional instability. Russia (whose relationship with Iran is transactional and pragmatic) will see it as an increase in Western influence in the region and a continued spiral. China will be concerned about the security of its energy supplies and the future of the extensive Belt-and-Roads infrastructure investment in the region.
If the GCC joins Iran, then it gives these countries control over the Straits of Hormuz, the ability to set prices and use the threat of special sanctions to advance their agendas. The long-term risk to energy security will affect Europe and Asian countries aligned with the US such as Japan. It increases the possibility that they will join a Western military alliance to protect shipping lanes and energy assets.
Israel would view any Iran-GCC alliance as a security threat. It relies on the continued support of the US and the West. Despite the influence of American Zionists and Christian evangelicals who love Armageddon, anger that it pushed the US and the West into this war is growing. President Trump has already made the case for reducing engagement: “You can make the case that maybe we shouldn’t be there at all… It’s like we’re doing it for you. –but we also do it for some of the best partners we have in the Middle East.”
The conflict is far from over and its impact remains uncertain. It is not known what their effects are on the availability and price of minerals, which are still important to the world economy. As Adolf Hitler noted: “The beginning of all wars is like opening the door to a dark room. One does not know what is hidden in the darkness.”
© Ep-26 Satyajit Das Right Reserved
