Iran-US war enters attrition phase, straining Gulf economies and alliances

The United States and Israel’s six‑month campaign against Iran has settled into a pattern of stagnation and attrition, analysts say, with no sign of a regime collapse in Tehran or a decisive victory for Washington. The war, which began on 28 February after surprise Israeli and U.S. strikes on Iranian targets, has instead created a protracted conflict in which economic and military pressure is being applied but has not yet forced a structural change in Iran’s leadership.

The initial U.S. strategy was to use sanctions and a naval blockade to cripple Iran’s economy and push the regime toward concession. Six months on, that vision appears unlikely. The U.S. military remains entrenched in the Middle East – the most militarised region in recent years – and the intensity of the fighting has eased only after a memorandum of understanding was signed by Washington and Tehran in June. Yet the cease‑fire has not materialised, and uncertainty about the conflict’s trajectory persists.

Oil‑dependent Gulf economies are still absorbing supply shocks. Iranian attacks on shipping through the Strait of Hormuz and the U.S. blockade of Iranian ports have reduced traffic to levels just above pre‑war figures. The Strait of Hormuz, a key chokepoint for global oil flows, has seen a “trickle” of traffic, while the Bab al‑Mandeb Strait has become increasingly hazardous after Houthi rebels – allied with Iran – declared a naval blockade of Saudi Arabia in July. These disruptions have kept oil, derivative products and liquefied natural gas shipments at risk, forcing Gulf states to confront higher prices and rising inflation at the same time.

The war has also accelerated existing trends in the region. Sanam Vakil, director of the Middle East and North Africa Programme at Chatham House, told Al Jazeera that Gulf countries were already diversifying their economies and broadening defence partnerships beyond U.S. guarantees. “The war has just accelerated trends, but hasn’t really started anything that wasn’t already under way,” Vakil said. The recent defence agreement signed in Mecca by Turkey, Pakistan and Saudi Arabia is likely to be the first of many such pacts in the region.

Israel continues to pursue its “paramountcy” project, according to HA Hellyer of the Royal United Services Institute. Hellyer told Al Jazeera that there is no chance of Tehran’s government falling in the next six months. “If everything were to theoretically stay the same … with just increased economic pressure, that could eventually cause a ripple effect that could lead to state collapse in Iran. But we’re talking years, not months, and everything is not likely to stay the same,” Hellyer said.

The closure of the Strait of Hormuz and the attacks on regional cities have also undermined Gulf states’ plans to use oil revenues to diversify their economies and maintain their reputation as safe havens for investors. John Sfakianakis, chief economist at the Gulf Research Center, told Al Jazeera that oil prices have risen in line with the Gulf states’ export difficulties. “Is this going to go for six months? Is it going to go on for longer?” Sfakianakis asked, highlighting the uncertainty that surrounds the region’s economic future.

The war’s impact extends beyond the Gulf. Existing tensions, such as those between the Houthi rebels and Saudi Arabia in Yemen, are likely to intensify as the conflict drags on. Rival powers, including India and China, remain active in the region. Beijing’s Belt and Road Initiative has already established a foothold in the Middle East and North Africa, and its influence is neither halted nor halted by the current hostilities.

For now, the majority of Gulf states caught between the two sides are focusing on ways to live with the turmoil and manage the consequences. They are investing more in defence while attempting to maintain economic stability in a volatile environment. As the war continues, the region remains in flux, with formal alliances no longer guaranteeing safety. The United States and Israel’s campaign against Iran has not produced a decisive outcome, and the Gulf’s future continues to be shaped by a complex mix of economic uncertainty, military entanglement and shifting geopolitical alliances.