Gulf Recalibrates As Iran Emerges Intact From War

The U.S.-Iran deal may silence the guns, but it cannot alter the verdict of more than three months of war.

The region has 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 said.

Iran remains a formidable and undefeated force capable of threatening Gulf Arab states and global energy flows, they say, while the United States has ‌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 February 28 that killed Supreme Leader Ayatollah Ali Khamenei and top officials.

The Memorandum of Understanding (MoU), 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 unfavourable to Israel, according to three Israeli officials, as it omits its core demands, including dismantling Iran’s enrichment capability and curbs on its missile programme.

Officials said Israel was caught off guard when U.S. President Donald Trump signalled on 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.”

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 has triggered precisely the consequences they had long feared: Iranian strikes on energy and civilian infrastructure and disruption to Hormuz, dealing a heavy economic blow.

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

“More and more Gulf states are coming to realise 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 realise 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 have 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 normalisation, Gerges said. In its aftermath, the focus is shifting toward Gulf-Iran accommodation.

While Washington will remain an indispensable partner, regional analysts say the conflict is likely to accelerate a quiet but consequential realignment, with Gulf states diversifying defence ties and hedging against future shocks.

Saudi analyst Abdulaziz Sager is more explicit. In his view, Washington has 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 weaponisation of Hormuz and the ability to directly threaten Gulf states.

“They (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.”

What is being signed, analysts say, is less a peace accord than a mechanism to halt the fighting.

At its core, fundamental disputes remain unresolved: Iran’s enriched uranium, enrichment levels, sanctions relief, security guarantees, and control of key waterways.

The MoU, Miller argues, is not a resolution but “a ticket to negotiation” — a first phase that buys time and space for ⁠talks whose success is far from guaranteed. Its structure echoes the Gaza ceasefire frameworks: a pause that defers the hardest issues, with no guarantee they will ever be resolved.

“What is about to be signed is not peace, but recognition: that the war’s ambitions outran its achievements; that the battlefield produced a stalemate, and that Gulf states, which bore the heaviest costs, are recalibrating their security on shakier ground than at any point in time,” said Miller.

Having withstood both internal unrest and external military pressure, he argues that Iran now faces a different question: whether this war has reinforced, rather than weakened, its sense of resilience, with implications for deterrence in the years ahead.