THE ECONOMIST: Iran ceasefire cold comfort for Gulf states on the edge

The ceasefire between America and Iran, as Donald Trump tells it, will usher in a “golden age” for the Middle East. Yet the first day of that truce was among the bloodiest days the region has seen since the war began on February 28.

Everyone breathed a sigh of relief on April 8 when the President retreated from his harrowing threat to wipe out Iranian civilisation.

Mr Trump had spent the previous two weeks demanding that Iran reopen the Strait of Hormuz or face attacks on its power grid.

With less than 90 minutes to go before his deadline, however, Mr Trump announced a two-week ceasefire.

Negotiators from America and Iran are due to meet to discuss a permanent end to the war.

Their first meeting is scheduled for April 10 in Islamabad, the capital of Pakistan, which has played a central role in passing messages between the warring parties.

Relief soon turned back to dread, though: aside from America, no one immediately ceased fire. By far the worst violence was in Lebanon, where Israel has been fighting Hezbollah, an Iranian-backed Shia militia, which joined the war on March 2 by firing a volley of rockets at Israel.

Shehbaz Sharif, the Pakistani Prime Minister, had said that the truce with Iran would also include Lebanon.

His Israeli counterpart insisted it did not, and Mr Trump offered no resistance.

Hours later Israel launched a co-ordinated wave of more than 100 air strikes across the country. Hundreds of people were killed and injured; hospitals were overwhelmed, and ran short of blood.

Meanwhile, Iranian missiles and drones continued to rain down across the Gulf.

In Saudi Arabia they hit a vital pipeline that carries seven million barrels per day of oil to the Red Sea, allowing a share of the kingdom’s oil exports to bypass Hormuz. In Kuwait they targeted power and water-desalination plants.

The United Arab Emirates said it was attacked more than 50 times. This was one of the heaviest days of Iranian attacks since the start of the war.

Some analysts saw it as a response to Israel’s actions in Lebanon. Others wondered if it was a consequence of the decentralised way Iran has fought this war.

With its leaders hidden in bunkers and the mobile-phone network penetrated by Israeli spies, communication is difficult; the Islamic Revolutionary Guard Corps, the regime’s most elite fighting force, has given commanders in the field latitude to launch attacks on their own initiative.

Some may be unaware of the ceasefire, or even choosing to ignore it.

It is too early to know whether the ceasefire will truly take hold, let alone whether the talks in Pakistan will succeed.

That means it is premature to adjudicate whether Iran or America won the war (although that has not stopped both from claiming victory).

If the negotiations lead to a deal, and Iran agrees to end its regional aggression in exchange for relief from American sanctions, both would arguably win; if they fail and the war resumes, both might lose.

No safe harbour

Similarly, how the war ends will shape how other countries in the region see the future.

If Iran and America remain at daggers drawn, Gulf states will have to steel themselves for further conflict.

On the other hand, a deal might mean that, in time, they will come to view Iran as a commercial competitor rather than a military menace.

What is clear, though, is that Gulf states have suffered some of the heaviest losses.

The economic cost of the war has run into the tens of billions of dollars: lost oil-and-gas revenue, damage to vital infrastructure, even the bill for air-defence interceptors.

The reputational damage may be greater still. The war has exposed two frightening vulnerabilities — one geographic, the other geopolitical — for which Gulf states have no easy fix.

First is their reliance on the Strait of Hormuz.

For most Gulf states, the waterway is either their primary sea link to global markets or their only one: they send out hydrocarbons and other commodities, and import everything from cereals to cars.

Iran’s ability to shut the strait poses an existential threat; its plan to charge tolls on vessels using the waterway smacks of extortion.

To be fair, it may not be able to implement the scheme in peacetime, especially if Oman, which sits on the south side of the strait, does not go along with it.

Yet officials across the Gulf are discussing alternatives to the strait. One, proposed under Joe Biden’s administration, would be a corridor of railways and pipelines that stretches to Israel. Another would terminate in Syria — which, remarkably, has been among the safest places in the region over the past six weeks.

They could also expand existing pipelines which terminate on the Red Sea or the Gulf of Oman. Yet none of these offer a quick or reliable solution.

Pipelines would take years to build and are easy targets, as the latest Iranian strike on Saudi Arabia demonstrated. Moreover, the main customers for Gulf oil are in Asia, and the largest oil tankers are too heavy to transit the Suez Canal when fully laden.

Piping crude to the Mediterranean would be a costly, slow workaround. The same goes for imports: fleets of lorries are a poor substitute for cargo ships.

The other vulnerability for Gulf states is their reliance on an increasingly unreliable America.

For decades, the presence of American troops on the Arabian peninsula was meant to deter external attack.

Mr Trump’s war has flipped that logic on its head: instead of deterring a conflict, America initiated one.

In public, most Gulf officials insist the war will not shake their bond with America. Their private views are more nuanced.

A few express a sort of buyer’s remorse about Mr Trump, a President they worked hard to court.

Less than a year ago he stood in the Saudi capital and announced an end to “interventionalist” wars in the Middle East. Now he is waging one.

Yet when it comes to the broader relationship with America, Gulf states have no clear alternative.

Britain and France are helping to shoot down drones above Qatar and the UAE, but their reluctance to commit to a post-war maritime mission in the Strait of Hormuz has irked some Gulf governments.

Europe, in their eyes, is unwilling and unable to embrace a serious hard-power role.

They have other options, of course. Qatar will deepen its ties with Turkey, which has deployed troops in the Emirate since 2017.

Saudi Arabia will firm up the defence pact it inked with Pakistan in September. South Korea rushed an air-defence system to the UAE during the war; the two countries have grown increasingly close.

If such middle powers can help them diversify their relationships, however, they cannot substitute for a superpower.

Great powers, small comfort

This points to another lesson of the war. Arab states thought they could stay out of competition between America and its great-power rivals.

When Russia invaded Ukraine, the Middle East sought to remain neutral. Vladimir Putin has not returned the favour.

Russia has reportedly provided Iran with satellite imagery to help it strike targets in Arab states.

Meanwhile, Volodymyr Zelensky rushed to the Gulf to offer help shooting down drones: the Iranian Shahed models that have wreaked havoc across the region, after all, are the same ones Russia is using against Ukraine.

There is also frustration with China. It did help nudge Iran towards accepting Mr Trump’s ceasefire. But a country that imports most of its oil from the Middle East joined Russia in vetoing a UN Security Council resolution, sponsored by Bahrain, to authorise a military mission in Hormuz.

At the same time, Russia and China have been underwhelming allies for Iran as well. The former has provided targeting help but seemingly not much more. The latter is unlikely to offer much help with post-war reconstruction if America does not ease sanctions.

A few years ago everyone in the Middle East was keen to talk about the region’s new multipolar era. Now America is at the centre of events, for better or worse, and its rivals are on the margins.

Yet one of America’s closest allies is increasingly viewed with suspicion as well.

Outside the UAE, many Arab officials now regard Israel as a destabilising force in the region. They believe it dragged Mr Trump into the war by misleading him about how easy it would be to topple the Iranian regime (a charge that wrongly absolves Mr Trump of blame).

They also think its ferocious bombing of Beirut on April 8 looks like an effort to blow up the American ceasefire with Iran.

All of this leaves the Gulf states in a quandary. Before the war the region had enjoyed decades of relative peace.

It thought itself an entrepot immune from the Middle East’s many conflicts.

America would keep it safe, even as it pursued closer ties with Russia and China; for some, closer ties with Israel also offered the promise of a staunch ally against their foe in Tehran.

The war has upended all of those assumptions at once.