The images from the glittering metropolises of the Gulf are bizarre: Luxury hotels are burning in Dubai, the airport in Kuwait is being hit by missiles, and an oil refinery in Saudi Arabia is under attack. The United Arab Emirates (UAE) alone has had to defend itself against more than 180 ballistic missiles and over 800 drones to prevent further strikes. From the beginning of the US and Israeli attacks on Iran on the morning of February 28, all the Arab Gulf states have become targets for Iranian retaliatory strikes.
Triple Damage
For the Gulf states, this marks the realization of a nightmare scenario that they wanted to avoid at all costs. The escalation harms them in three ways. First, it jeopardizes their national security. The Iranian attacks are not focused exclusively on US military bases, but also on civilian targets. There is growing concern among parts of the population that their rulers will not be able to protect them fully—at least if the attacks continue for a longer period of time and there are substantial casualties. Such a scenario could weaken the legitimacy of the rulers in Riyadh, Abu Dhabi, or Doha in the medium term.
Secondly, the “Gulf Brand,” the business model of the Gulf states, is under enormous pressure. Dubai, Doha, and Abu Dhabi define themselves as centers of innovation, investment, and entertainment. They are considered attractive investment locations and tourist destinations, venues for major sporting events such as the 2022 World Cup in Qatar, and reliable business partners for international companies.
With more than 95 million passengers per year and around 8,500 flights per week, Dubai is the largest airport in the world—and was at a standstill after the attacks. Regional stability, on which good business depends, is at risk, and with it the reputation of the respective rulers as successful modernization managers.
Ongoing uncertainty could also jeopardize social cohesion and resilience in the Gulf states: In countries such as Saudi Arabia, economic diversification to break away from oil dependence is an absolute necessity. To this end, jobs are being created in non-oil sectors in order to reduce the relatively high youth unemployment rate and meet the young population’s high expectations for a secure future. If this fails—for example, if investments dry up—there is a risk of growing discontent.
In recent months, the Saudi government has already had to suspend the implementation of several major projects due to a simple lack of financial resources. Most of its revenue still comes from oil sales. The current confrontation therefore threatens not only the investment climate, but also social stability.
Thirdly, the attacks by the US and Israel on Iran, along with the Iranian counterstrikes, are undermining the model of regional conflict management. In recent years, the Gulf region has increasingly relied on diplomacy, de-escalation, and dialogue to find a modus operandi with Iran.
The Limits of Mediation
In doing so, the Gulf rulers pursued a policy based on not aligning themselves with either camp, but rather exercising flexible pragmatism and presenting themselves as problem solvers—especially with regard to Iran. In 2023, Riyadh and Tehran resumed diplomatic relations after seven years of frosty relations, Qatar and Iran are sharing a gas field, and Oman acted as an important mediator between Iran and the US and was itself taken by surprise by the outbreak of war.
In addition, the Gulf states prohibited the US and Israel from using their airspace for attacks on Iran. The aim of these measures was to manage the complicated relationship with Iran, because the Gulf states considered coexistence to be the lesser evil compared to confrontation.
Now they are being brutally confronted with the limits of this mediation policy. The greater the threat Iran poses to them, the more the Gulf states may feel compelled to turn toward the Israeli-American camp—whether they want to or not. This is another reason why the Gulf states are responding with harsh criticism of Iran and calling into question the fragile rapprochement of recent years.
The Gulf states are no friends of Iran, but they fear the chaos and anarchy that could accompany regime change in Tehran, which could have dramatic consequences for the stability of the Gulf states themselves. That is why, despite the current hardening of positions, they are likely to pursue a dual strategy: on the one hand, increasing pressure on Iran, but on the other hand, trying to manage the situation through their various communication channels in order to avoid an escalation that could spiral out of control. In doing so, the Gulf states must perform a balancing act to prevent their own model of success from going up in smoke.
Danger for Europe
For Europe, a destabilization of the Gulf states could have serious consequences. The Gulf states are important energy suppliers, trading partners, and influential power brokers, and have thus become economic and political partners of necessity for European countries. If a prolonged crisis now looms, this would also affect European interests—in terms of energy security, maritime trade routes, and tourism. Gasoline prices at European gas stations have already risen significantly in the wake of Iran's blockade of the Strait of Hormuz, and more than half a million European tourists are stranded at global hubs such as Dubai—including around 30,000 Germans.
Against this backdrop, Europe should strive to de-escalate the situation. However, it lacks the necessary leverage to influence Israel, the US, and Iran. As a result, Europe is merely a spectator, even though the crisis in the Gulf could also become a crisis for Europe.
Translated from the German by Kate Brown
Sebastian Sons is Senior Researcher at the Center for Applied Research in Partnership with the Orient (CARPO).
