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Has the Iran war changed the Gulf forever?

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Has the Iran war changed the Gulf forever?


Smoke rises in the sky after blasts were heard in Manama, Bahrain on February 28, 2026. — Reuters
Smoke rises in the sky after blasts were heard in Manama, Bahrain on February 28, 2026. — Reuters

Members of the Reuters Gulf team, like so many of our neighbours in the region, have huddled in stairwells and windowless bathrooms, listening to volleys of missiles being intercepted above our homes while trying to soothe frightened kids and field messages of concern from abroad.

We have become newly alert to where a window might blow in, how to track down difficult-to-find supplies of basics like chicken or bananas and how every rumble, even a neighbour closing a cupboard, can send the heart racing.

Across a region whose newly treacherous airspace is closed and where the only viable escape route is a long cross-desert drive through territory under Iranian attack, we’re all weighing the same impossible questions: stay or go, and how?

Federico Maccioni, a member of Reuters’ finance team in Dubai, said that for the first time, he perceived a hint of doubt about what lies ahead for the city. Still, Rachna Uppal, the news agency’s Abu Dhabi-based chief economics correspondent, said she was struck by how normal life continued, with people shopping, attending dental appointments, and even jetskiing.

A satellite image shows the Breaker residential tower in Seef, Bahrain on March 2, 2026. — Reuters
A satellite image shows the Breaker residential tower in Seef, Bahrain on March 2, 2026. — Reuters

Meanwhile, as reporters, they’re stretched across the Gulf to make sense of it all. This week in Gulf Currents, Iran’s drones are proving relentless, punching through Gulf defences and striking airports, hotels and data centres.

Tourism is buckling, business hubs are paralysed, and decades of Gulf state-building are suddenly in doubt. This briefing unpacks the economic shock, the strategic stakes and what this war may change forever.

Gulf fundamentals

For decades, the Gulf’s rise rested on two core assumptions, i.e. its cities offered a safe haven in an unstable region and that vast wealth from uninterrupted energy exports would keep flowing. This week’s events have shaken both pillars at once, perhaps irreversibly.

First to falter was the idea of the Gulf as a sanctuary insulated from the region’s violence. Dubai, the flagship embodiment of that promise, was built on the premise that turmoil stopped at its borders. But days of Iranian missile and drone strikes on airports, ports and luxury landmarks punctured that carefully constructed brand.

Smoke billows from Jebel Ali port after an Iranian attack, following United States and Israel strikes on Iran, United Arab Emirates on March 1, 2026. — Reuters
Smoke billows from Jebel Ali port after an Iranian attack, following United States and Israel strikes on Iran, United Arab Emirates on March 1, 2026. — Reuters 

UAE President Sheikh Mohammed bin Zayed tried to project business-as-usual as he strolled through Dubai Mall on Monday evening, yet outside, flights were grounded, financial markets shut, and jumpy residents queued for supplies, all while deep thuds rolled through the skyscrapers as air defences intercepted barrage after barrage.

The psychological blow raises doubt about whether cities like Dubai, Abu Dhabi, and Riyadh — the success of which has been built on confidence, mobility, and positive perceptions — can maintain premium appeal when they suddenly prove vulnerable to regional turmoil.

Economic fragility, repercussions

The second rupture is economic, and deeper still.

The closure of the Strait of Hormuz and the shutdown of QatarEnergy’s vast LNG operations, supplier of a fifth of global LNG and long proud of never missing a shipment, have unleashed a supply shock once considered inconceivable.

Damage caused by an Iranian drone strike on one of the buildings next to the Navy Base Headquarters of US Navy 5th Fleet in Juffair, Bahrain on March 4, 2026. — Reuters
Damage caused by an Iranian drone strike on one of the buildings next to the Navy Base Headquarters of US Navy 5th Fleet in Juffair, Bahrain on March 4, 2026. — Reuters 

Iraq has slashed production; Saudi Arabia is rerouting crude; hundreds of tankers sit idle near the port of Fujairah, which is still burning after an attack, without safe passage. Prices for oil, gas and related commodities have surged.

The Gulf’s ability to bankroll diversification, mega-investments and a generous social contract depends on secure energy exports. That assumption is suddenly fragile.

Some of this damage cannot be undone.

What future holds?

This war has unlocked a larger unknown: what will relations between the Arab Gulf and Iran look like after this?

After years of tentative détente, Gulf Arab states had begun recalibrating ties with Iran, acknowledging geography and mutual interest. That fragile trust has now been ruptured.

Smoke rises after reported Iranian missile attacks, following United States and Israel strikes on Iran, as seen from Doha, Qatar on March 1, 2026. — Reuters
Smoke rises after reported Iranian missile attacks, following United States and Israel strikes on Iran, as seen from Doha, Qatar on March 1, 2026. — Reuters

The scale of Iran’s attacks has erased the political space Gulf leaders had carved out for dialogue. Having been attacked directly, Gulf capitals must now confront a harder question: even if the fighting stops, can trust in Iran as a neighbour ever be rebuilt, or has the relationship entered a long, hostile freeze?

The implications are profound. The Gulf’s economic model, energy security, and regional diplomacy, long treated as constants, have all been destabilised. Even if the fighting stops soon, the era of hedging with Iran is perhaps over. And a more guarded, security-driven Gulf lies ahead.





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US delegation ‘en route’ to Islamabad as Iran ‘positively reviews’ participation in talks

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US delegation ‘en route’ to Islamabad as Iran ‘positively reviews’ participation in talks



A US delegation led by Vice President JD Vance is en route to Pakistan and expected to land in Islamabad within hours for the second round of talks with Iran, President Donald Trump said on Monday.

Trump confirmed the development in an interview with the New York Post, saying he would be willing to meet Iranian leaders himself if progress is made in the talks.

Apart from Vance, the US delegation includes Trump’s son-in-law, Jared Kushner, and Special Envoy to the Middle East Steve Witkoff, as per a report by Axios.

If reports about the other delegation members are accurate, it would mean the US delegation is the same as in the first round of Iran talks held in Islamabad on April 11.

However, a source familiar with the plan told AFP on Monday that a US delegation will head to Pakistan “soon” for a new round of peace negotiations with Iran.

Meanwhile, mediator Pakistan — which brokered a two-week ceasefire between the two sides on April 8 — was making efforts to end the US naval blockade of Iranian ports and to ensure Iran’s participation in the peace talks.

With the ceasefire set to expire, a senior Iranian official told Reuters that Tehran was “positively reviewing” its participation following Pakistan’s efforts, but no final decision had been made.

The comments conveyed a clear change of tone from earlier statements ruling out attendance and pledging to retaliate for US aggression.

Separately, Deputy Prime Minister and Foreign Minister Ishaq Dar held a phone call with Iranian Foreign Minister Abbas Araghchi, emphasising the importance of continued dialogue and engagement to resolve all pending issues.

DPM Dar stressed that persistent dialogue was essential to ensure regional peace and stability, read a statement issued by the Foreign Office.

Since the announcement of the ceasefire, Tehran and Washington have disagreed on a number of issues, including Iran’s blockade of the Strait of Hormuz and the US naval blockade of Iranian ports.

Tehran effectively blocked the waterway and launched attacks against Israel and US bases across the Middle East in response to the joint US-Israel attacks on February 28.

Iranian Foreign Minister Abbas Araghchi, on April 17, announced the reopening of the strait for commercial vessels following the ceasefire in Lebanon.

However, Iranian authorities blocked the waterway again the following day, citing the US blockade of Iranian ports.

On April 18, the Islamic Revolutionary Guard Corps (IRGC) said that the US blockade represented “acts of piracy and maritime theft”.

“Until the US restores full freedom of navigation for vessels travelling from Iran to their destinations and back, the status of the Strait of Hormuz will remain tightly controlled and in its previous condition,” it said.

US Marines board Iranian vessel

The ceasefire had appeared in jeopardy after the US said it had seized an Iranian cargo ship that tried to run its blockade, and Tehran vowed to retaliate.

The US military said it had fired on an Iranian-flagged cargo ship headed towards Iran’s Bandar Abbas port on Sunday after a six-hour standoff, disabling its engines.

US Central Command released a video showing Marines descending ropes from helicopters onto the vessel.

Iran’s military said the ship had been travelling from China and accused the US of “armed piracy”, according to state media.

They said they were ready to confront US forces over the “blatant aggression”, but were constrained by the presence of crew members’ families on board.

Trump on Sunday warned that the US would destroy every bridge and power plant in Iran if it rejected his terms, continuing a recent pattern of such threats.

Iran has said that if the US were to attack its civilian infrastructure, it would strike power stations and desalination plants in its Gulf Arab neighbours.



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‘War benefits no one’: Pezeshkian urges unity among Muslim nations to foil foreign plots

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‘War benefits no one’: Pezeshkian urges unity among Muslim nations to foil foreign plots



Iran’s President Masoud Pezeshkian says strengthening unity among Islamic countries is the most important way to counter conspiracies and prevent foreign powers from taking advantage.

Speaking during a supervisory visit to the Ministry of Justice on Monday, Pezeshkian received a comprehensive report on the ministry’s actions and missions under the special circumstances resulting from the recent US-Israeli aggression.

Pezeshkian noted that through “empathy, honesty, and collective participation, we can get past this stage and continue the country’s path toward dignity and progress.”

He highlighted the need for a rational approach toward regional and international developments, adding, “War benefits no one. While standing firm against threats, we must use every rational and diplomatic path to reduce tensions.”

He further noted that distrust toward the enemy and vigilance in interactions remain an undeniable necessity.

Following the US and Israel’s recent aerial strikes on Iran launched on February 28, Iran retaliated with barrages of missile and drone attacks on Israeli-occupied territories and US bases and interests in the region.

The president noted that passing through the battlefield does not mean the end of the road. Rather, it marks the beginning of a more important phase: the ‘Greater Jihad.'”

He described this as a struggle in which all people must play a role through patience, tolerance, cooperation, and active participation in rebuilding the country and solving its problems.

“This phase requires greater mental and social readiness than the war era,” he added.

Referring to the decisive role of the guidance of the Leader of the Islamic Revolution Ayatollah Seyyed Mojtaba Khamenei and martyr Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei, Pezeshkian stated, “The support and directives of the great and martyred Leader of the Revolution have been a solid pillar for the government since the very beginning of its work.

“It was the coordination formed in the light of these guidelines that today makes effective decision-making and overcoming challenges possible,” he highlighted.



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US seeks Iran’s surrender; Iranians don’t submit to force: Pezeshkian

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US seeks Iran’s surrender; Iranians don’t submit to force: Pezeshkian



President Masoud Pezeshkian says Iranians will never submit to force despite “bitter messages” from American officials.

Pezeshkian made the remark in a post on his X account on Monday as US President Donald Trump said an American delegation was on route to Islamabad for talks with Iran after he renewed his threat of attacking Iranian power plants and bridges if no deal is reached.

Iranian officials have said there is currently no plan to hold a second round of talks with the US after 21 hours of Pakistani-mediated negotiations failed to yield an agreement on April 11-12 over Washington’s excessive demands and shifting positions

In his post, Pezeshkian stressed that honoring commitments was the basis of “meaningful dialogue.”

“Deep historical mistrust in Iran toward U.S. gov conduct remains, while unconstructive & contradictory signals from American officials carry a bitter message; they seek Iran’s surrender. Iranians do not submit to force,” the president wrote.

Speaking to reporters on Monday, Iranian Foreign Ministry spokesman Esmaeil Baghaei said the United States is not serious about negotiations with Iran, and that Tehran had no plans to take part in a second round of talks with Washington.

A US naval blockade of Iranian ports, excessive demands and shifting positions have hindered progress in the talks.



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