If the Iranian regime survives the ongoing war, it will rebuild and rearm—and its Arab neighbors will pay the price.

The ongoing military confrontation in the Persian Gulf region—pitting the United States and Israel against Iran—has spilled far beyond the confines of its direct combatants. Iran’s neighbors, including the Gulf states, Iraq, and Jordan, though not architects of this conflict, have nonetheless emerged as its primary victims. Facing the targeting of energy infrastructure, the disruption of maritime navigation in the Strait of Hormuz, the erosion of economic confidence, and the retreat of investment flows, the Gulf has found itself positioned as the primary recipient of the fallout from a conflict whose objectives and endgame are defined well beyond its borders.

This reality imposes a strategic question of acute sensitivity, one that resists the comfort of diplomatic platitudes. The Gulf states are not genuine partners in this confrontation, and they put their diplomatic weight into preventing it; nevertheless, they are bearing the consequences of a war whose trajectory and terms of closure lie outside their control.

Why Iran Is Trying to Destroy the GCC’s Economy

For four decades, the Arab nations of the Gulf engaged with regional wars as supporters, financiers, or indirect stakeholders, but almost never as participants. Even during the Iran–Iraq War and the 1991 liberation of Kuwait, their territory remained largely outside the zone of systematic targeting. That era is over; in the two months of Operation Epic Fury, Iranian missile and drone campaigns have struck oil and gas facilities, power and desalination plants, airports, and logistics nodes across all six Gulf Cooperation Council (GCC) states. As the Carnegie Endowment aptly put it, the war turned “historically secure neighbor states into war zones overnight.”

Iran’s decision to strike at the GCC, whose members were not involved in Operation Epic Fury and opposed it from the outset, may seem strange. In fact, however, the ongoing drone and missile strikes on GCC infrastructure amount to far more than symbolic retaliation. Iran is pursuing a deliberate strategy to as a pressure point against the United States—one that Tehran believes can impose costs on Washington that it will not tolerate indefinitely.

Iran’s war on the Gulf is a calculated economic assault. Through targeted strikes on Saudi Aramco, ADNOC, and QatarEnergy facilities—along with attacks on oil fields in Kuwait and Bahrain—and the effective strangulation of the Strait of Hormuz, Tehran is deliberately seeking to cripple the Gulf’s energy backbone and drive global oil prices sharply upward. The fallout is already severe: Iraq has been forced to declare force majeure on its oil exports as disruptions in the strait have choked off shipping access. By shutting down the flow of oil through Hormuz, Iran can inflict tremendous pain on the economies of the United States and its allies, as well as those of most other oil-importing countries of the world—in Europe, Asia, and elsewhere. The fact that the primary victims of this strategy are Iran’s neighbors in the Gulf, little more than innocent bystanders in the war, is irrelevant in Tehran’s calculation.

The deeper damage to the Gulf is structural. Recognizing the dangers of overreliance on the oil trade, all six of the GCC states have pushed ambitious economic diversification plans—Saudi Arabia’s Vision 2030 and NEOM, the United Arab Emirates’ logistics and AI pivot, and Qatar’s post-World Cup diversification, to name a few. This transition, however, is predicated on the Gulf’s reputation as a stable, predictable destination for foreign investment. Every additional month of attritional warfare against the Gulf states damages that reputation, perhaps irrevocably.

The Iraq Precedent: Military Victory Does Not End the Threat 

The historical analogy is unavoidable, and it cuts against the optimism now circulating in Washington. In 1991, a US-led coalition inflicted one of the most lopsided military defeats in modern history on Saddam Hussein’s Iraq. Amid the annihilation of the Iraqi army in Kuwait, economic catastrophe at home, and two simultaneous uprisings in Iraq’s north and south, analysts confidently predicted the Ba’athist government would collapse within months. It did not. Saddam’s regime survived for 12 more years, during which it remained a chronic source of threat to the Gulf—crushing internal dissent, flirting with weapons of mass destruction, exporting terror, reopening disputes with Kuwait, and running sophisticated sanctions evasion networks across the region. Only the 2003 US invasion closed the file for good—and it only did so by creating a strategic vacuum that Iran and its proxies promptly filled, generating the very threat now bombarding the Gulf. As the Texas National Security Review documented, Washington’s post-1991 failure to resolve the “Saddam problem” caused “lasting, and probably irreparable, damage to US interests and to the post–Cold War order.”

The lesson is blunt: degrading a regime’s military capability does not end its capacity to threaten its neighbors. Ideologically hardened security states adapt and reconstitute through asymmetric tools: proxies, drones, cyber, and maritime harassment, all of which are dramatically cheaper to deploy than to defend against.

The Islamic Republic is more powerful than the Ba’ath Party, and the Iranian Revolutionary Guard Corps (IRGC) is more dangerous than the Iraqi Republican Guard or other paramilitary groups under the army’s umbrella. Saddam’s regime rested on a narrow Sunni Arab nationalist base and a shattered conventional army. The IRGC is embedded in a religious revolutionary ideology with deeper mobilizational roots. It commands a regional proxy network—Hezbollah in Lebanon, the Houthis in Yemen, and a powerful network of militias in Iraq—and operates a missile and drone complex vastly more sophisticated than anything Baghdad possessed in 1991.

The proof of this can be seen in the Gulf today. Even after a massive two-month air campaign against Iran, the United States and Israel have been unable to meaningfully curb Iran’s ability to exert power in the Gulf. If the far weaker Ba’athist regime required 12 years and a ground invasion to dislodge, the notion that airstrikes will end the IRGC as a regional threat is absurd.

“Mission Accomplished,” Redux

This is not to suggest that the only solution is to escalate the war until the fall of the Islamic Republic—an outcome that, if accompanied by broader state collapse, would undoubtedly unleash chaos across the region. As Henry Kissinger once wrote, the true purpose of war is not to defeat one’s enemies once and for all, but to forge an enduring peace.

After the Napoleonic Wars of the early 19th century, the victorious coalition established a new regional balance of power in Europe. By incorporating France as an equal member and respecting its interests rather than shunning it, they ensured a century of peace and prosperity on the continent. Conversely, after the devastation of World War I, the Western Allies extracted punitive concessions from Germany designed to leave it in ruins—only to repeat the war two decades later.

It may well be the case that the Islamic Republic is politically unreformable and would never consent to equal participation in a peaceful, stable regional order. Yet that order must be the overarching strategic aim of America’s policy in the Middle East, and its actions with regard to Iran, whether through war or peace, must be geared toward creating it.

In fact, the most dangerous scenario for the Gulf is not escalation, but premature closure. Over the past half-century, from Vietnam to Afghanistan, Washington has repeatedly declared victory and terminated its military operations politically before truly resolving them strategically. The Trump administration, by temperament and doctrine, is an especially strong candidate to do so again: declaring that Iran’s nuclear program has been “obliterated,” claiming the IRGC has been “broken,” and pivoting rhetorically to “America First” retrenchment. In such a scenario, Israel will pocket its tactical gains, and Washington will sell the political win at home. But the Gulf will be left in the line of fire—facing a wounded, vengeful Iran with every incentive to wage a long-term, low-intensity campaign through proxies and deniable strikes on Gulf strategic infrastructure, in the mold of the 2019 attack on Saudi Aramco’s oil facilities and the 2022 attacks on Abu Dhabi.

The decisive question for the Gulf is not when the current war ends, but what comes after Washington declares victory. If the 1991–2003 era taught the Gulf states anything, it is that the end of kinetic operations is often the beginning of a longer, more insidious phase—one fought through attrition, proxies, and economic coercion, long after the great powers have declared the file closed.

Washington will script the language of victory; the Gulf will be left to engineer the terms of survival. And if its capitals misread the Iraqi lesson—confusing the cessation of strikes with the disappearance of danger—they may discover, years from now, that they are still paying the price for a war whose initial architects declared it finished and moved on.

About the Author: Khalid Al-Jaber 

Dr. Khalid Al-Jaber is the executive director of the Middle East Council on Global Affairs in Doha, Qatar. A leading researcher and academic, he is widely recognized for his expertise in international relations, political communication, and the dynamics of the Middle East and North Africa (MENA) region.

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