While Washington and Tehran trade threats and missiles, the real bill is landing elsewhere. The Gulf states that spent years hedging between both powers, hosting American bases while pursuing détente with Iran, are now absorbing the economic and security shock that neither capital will acknowledge. Ali Larijani’s threat to Donald Trump on X this week is just the latest signal that the posturing will continue. The civilians, businesses, and governments of the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman are the ones paying.
The Gulf is footing the bill for a war it tried to prevent
According to AP News, Iran has launched new attacks at Israel and Gulf countries as it keeps up pressure across the Middle East. The GCC foreign ministers condemned the strikes in the strongest terms and invoked Article 51 of the UN Charter, affirming the right to respond. As The Guardian reported in early March 2026, Gulf states are on the verge of acting against Iran over what they call reckless strikes across the region. Qatar’s foreign ministry stated the attacks cannot go unanswered and that a price has to be paid. Years of careful diplomacy have collapsed in days.
Iran fired more than twice as many missiles and about twenty times more drones at its Arab neighbours than at Israel, with the UAE and Kuwait each facing nearly 200 ballistic missiles. Saudi Arabia’s Ras Tanura oil refinery and Qatar’s Ras Laffan LNG facility, the world’s largest LNG export complex, have been hit. Qatar shut down liquefied natural gas production. As Foreign Policy reported, the Iran war’s spread to Dubai, Saudi Arabia, and Qatar is jeopardizing the entire global economy. Global equity markets lost an estimated $3.2 trillion in value within 96 hours. Over 70 percent of flights to UAE, Qatar, and Bahrain were cancelled. Maritime insurance premiums have risen to six-year highs.
Gulf leaders had worked urgently to prevent this war. They publicly emphasized neutrality and prohibited offensive operations from their territories against Iran. The US launched strikes on Iran on February 28, 2026, without warning its Gulf treaty partners, despite explicit warnings from Saudi Arabia, Qatar, and others that such action would trigger Iranian retaliation against their territory. As the Carnegie Endowment noted, Gulf monarchies are caught between Iran’s desperation and America’s recklessness. Their warnings went unheeded. The region absorbed the damage anyway.
Neither Washington nor Tehran will admit who bears the cost
Washington frames the conflict as a necessary response to Iranian aggression. Tehran frames it as resistance to American and Israeli pressure. Both narratives ignore the same fact: the Gulf states are politically neutral but operationally entangled. They hold between $3 and $4 trillion in US-linked investments, including government bonds, infrastructure deals, and sovereign wealth fund holdings. The UAE had recently pledged $1.4 trillion in US investments over the next decade. Gulf officials are now in internal discussions about withdrawing from financial commitments, with some reviewing whether they can legally exit existing contracts under force majeure clauses given the billions in economic damage they are absorbing from a war they opposed.
Iran’s strategy of inflicting economic pain on Gulf neighbours to pressure Trump to end the war has backfired. As Reuters reported, Iran’s strikes on Gulf states may widen the war against Tehran. Analysts say the strikes forced Gulf states from hedged neutrality into open alignment with Washington. Abdulaziz Sager, Chairman of the Saudi-based Gulf Research Center, explained that the strikes forced us to be their enemies. Qatar shot down two Iranian jets, marking the first time an Arab Gulf state has militarily clashed with Iran. The GCC activated joint air-defence systems. Iran’s President Masoud Pezeshkian later apologised to Gulf nations, but the apology was characterised as very conditional. Qatar intercepted missiles shortly after his address aired.
What This Actually Means
The Gulf capitals are not bystanders. They are the primary economic and logistical theatre of a conflict they did not choose. Washington and Tehran both benefit from treating the Gulf as a stage for their rivalry: the US gets basing and financial leverage; Iran gets a way to hurt American interests without directly confronting US forces. Neither power has to admit that the real cost is borne by ordinary Gulf residents, businesses, and governments. The hidden price is the collapse of years of hedging, the destruction of critical infrastructure, and the erosion of the assumption that the Gulf offered a safe haven from regional conflicts. Until both capitals acknowledge that cost, the bill will keep landing on the same people who tried hardest to avoid the war.
Background
What is the Gulf Cooperation Council? The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. It was established in 1981 as a regional political and economic union. The council’s headquarters is in Riyadh. Member states have historically balanced security partnerships with the US against economic and diplomatic outreach to Iran.
Who is Ali Larijani? Ali Larijani is a senior Iranian security official and former speaker of parliament. On Tuesday March 10, 2026, he wrote a message on X threatening US President Donald Trump, as reported by AP News.
Sources
AP News, The Guardian, Foreign Policy, Carnegie Endowment for International Peace, Reuters