Iran Conflict Enters Critical Period of Uncertainty and Diplomatic Tension

US-Iran Conflict Raises Concerns for Gulf Nations’ Economic Stability

The ongoing conflict in the Middle East has raised concerns about the economic stability of Gulf nations, particularly Dubai and Doha. Airspace restrictions and regional conflicts have forced airlines to reroute or ground flights, affecting global trade and investment. Foreign investors are now questioning the region’s investment safety.

Gulf cities, including Dubai, Doha, and Manama, were built on the assumption that regional stability would attract global investment. However, this premise is now in jeopardy due to the war. Airports operate at reduced capacity, airlines have moved aircraft for security, and Bahrain has reportedly stationed civilian planes abroad as a safeguard.

The US military presence in the Gulf has traditionally deterred Iran and protected Washington’s allies. However, the war has raised questions about whether these bases are contributing to the security problem they aim to solve.

In 2020, US President Donald Trump ordered the killing of Iranian Revolutionary Guard commander Qassem Soleimani in Baghdad. This event marked a turning point in the conflict between Washington and Tehran. Before Soleimani’s killing, Iran relied on a strategy of calibrated pressure through its regional network of partners and proxies.

After Soleimani’s death, Iran became more cautious and less likely to provoke a direct confrontation with the US. However, caution did not halt Iranian activity. The country expanded its military, increased its missile arsenal, and accelerated drone development. The war in Ukraine provided valuable lessons for improvement.

Iran’s regional influence declined as Syria lost its strategic bridge to Lebanon and the Mediterranean. In Iraq, Iran’s grip on armed groups weakened under domestic pressure. In Yemen, the Houthis remained closest to Iran’s core interests.

The agreement with Saudi Arabia, brokered by China in 2023, was a major step towards improving relations between Iran and other Gulf states. However, Israel’s genocidal war on Gaza changed how Iran made its strategic decisions, leading to increased tensions.

Source: Al Jazeera