Gulf recalibrates as Iran emerges intact from war

The region emerged from one of its most dangerous crises in decades with the balance of power broadly unchanged, Iran politically emboldened, and Gulf confidence in U.S. protection deeply shaken, Gulf sources, diplomats and analysts say.

Iran remains a formidable and undefeated force capable of threatening Gulf Arab states and global energy flows, they say, while the United States again revealed the limits of military power against a resilient adversary.

For Washington, the deal offers an exit from a costly confrontation that failed to deliver its most ambitious objectives — from forcing Tehran’s capitulation to dismantling its nuclear and missile capabilities, the sources add. For Iran, it amounts to something equally significant: survival.

After absorbing relentless U.S. and Israeli strikes, the Islamic Republic emerges battered but standing, preserving both its political establishment and much of the leverage that brought the parties to the table.

“‘Epic Fury’ has been an epic disaster,” said Aaron David Miller, a former U.S. official and negotiator, referring to the U.S.-Israeli campaign launched on Iran on Feb. 28 that killed Supreme Leader Ayatollah Ali Khamenei and top officials.

Sunni Gulf states 

The Memorandum of Understanding, to be signed on Friday, provides for a 60-day cessation of hostilities during which the two sides will negotiate a permanent settlement, including disputes over Iran’s enriched uranium stockpile.

The sharpest shock, however, is being felt in the Sunni Arab Gulf states, where the stability behind decades of economic growth has been sharply challenged. By this measure, they are the war's main losers: spectators to decisions that reshaped their security landscape, now left to absorb the fallout.

The deal, Gulf sources say, has already begun to reshape Gulf strategic thinking, eroding confidence in U.S. protection, entrenching Iran as an enduring regional force, and accelerating a shift toward accommodation rather than confrontation.

A senior Gulf government source put it bluntly: any de-escalation is positive, but the situation is unequivocally worse than before the war.

The emerging deal also appears unfavorable to Israel, according to three Israeli officials, as it omits its core demands, including dismantling Iran’s enrichment capability and limits on its missile program.

Officials said Israel was caught off guard when U.S. President Donald Trump signaled Thursday that a deal was close, highlighting its limited influence over the terms. Prime Minister Benjamin Netanyahu raised the issue directly with Trump, according to a statement from his office, which stressed that Israel was not party to the agreement and outlined its conditions for a final deal — ending Iran's nuclear ambitions.

Far-right National Security Minister Itamar Ben-Gvir rejected the deal, saying Israel was not bound by it "in any way."

Engagement with Iran 

The agreement may end this phase of the conflict, Gulf sources say, but it does not resolve the strategic dilemma it has exposed: Iran remains a potent force, the Strait of Hormuz has emerged as a recurring pressure point, and the assumptions underpinning Gulf economies look more fragile than at any point in recent memory.

For Gulf states, the U.S.-Israeli campaign triggered precisely the consequences they long feared: Iranian strikes on energy and civilian infrastructure and disruption to Hormuz, dealing a heavy economic blow.

Gulf capitals might welcome a pause in fighting, but many are drawing a sobering conclusion: neither U.S. nor Israeli force removed the Iranian challenge, while the costs of confrontation fell disproportionately on those caught in between.

“More and more Gulf states are coming to realize that Iran is here to stay, that it retains the capacity to disrupt the regional order,” said Middle East scholar Fawaz Gerges.

“The Gulf states don’t trust Iran. They had hoped the United States would bring about regime change. The reverse has happened,” Gerges said. “Now more and more Gulf rulers realize they cannot depend on the U.S. or Israel to deliver security or stability.”

That reassessment marks a deeper shift. Gulf states have long distrusted Iran but relied on U.S. power to contain it. Now, engagement with Tehran has already begun.

Gulf capitals intensified contacts with Tehran lately, seeking economic and security understandings to reduce the risk of confrontation, regional sources say.

Before the war, the central regional question was the scope of Arab–Israeli normalization, Gerges said. In its aftermath, the focus is shifting toward Gulf-Iran accommodation.

Missed objectives

Saudi analyst Abdulaziz Sager is more explicit. In his view, Washington failed to deliver its declared objectives from regime change to curbing Iran’s nuclear program, while handing Tehran two new points of strategic leverage — the weaponization of Hormuz and the ability to directly threaten Gulf states.

"(The Americans) switched from unconditional surrender to an MOU. They caved in," said Sager, chairman of the Saudi-based Gulf Research Center. "They said they would change the Iranian regime — they couldn’t. They said they would resolve the missile and nuclear file — that didn’t happen.”