Gulf States Seeking Growth Still Hostage To Regional Chaos

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As a result, Qatar, Saudi Arabia and the UAE have invested billions of dollars in efforts to influence governments and groups across the world. This includes the mostly authoritarian governments in the Middle East and North Africa, such as Egypt's .

But here, Gulf states are torn politically. If democratic systems form elsewhere in the Arab world, this could encourage Gulf citizens to push for elected government at home. Yet overly coercive Arab governments outside of the Gulf can be prone to popular unrest and even civil war.

Propping up unpopular regional governments risks backfiring on Gulf Arab leaders in one of two ways.

First, it can entice Gulf states into protracted and damaging wars, such as was the case with Saudi Arabia and the UAE's failed military intervention in Yemen against the Houthis. Second, it can drive a wedge between Gulf states, as is seen with the current conflict in Sudan, in which the Saudis and Emiratis are backing rival factions .

3. Watching which way Iran will turn

Always looming behind complicated Middle Eastern politics is Iran, the historically powerful, populous, non-Arab country whose governing Shiite Islam ideology has been the chief antagonist to the Sunni-led Gulf Arab states since the Iranian Revolution in 1979.

Opposing Gulf Arab and American strategic interests, Iran has for years intervened aggressively in Middle Eastern politics by funding and encouraging militant Shiite groups in Iraq, Lebanon, Yemen and elsewhere.

An assertive Iran has been especially a thorn in the side of Saudi Arabia , which strives to be the dominant Muslim majority power in the region. Dealing with Iran has required careful balancing from Qatar and the UAE , which are more directly exposed to Tehran geographically and have maintained relatively stronger relations.

Given this, Gulf countries may silently welcome the decrease in Iran's military power in the wake of Israel's recent war against Iran and its allies, such as Hezbollah in Lebanon, while also fearing further Iranian-Israeli conflict .

At the same time, a less powerful Iran runs two types of new potential dangers for Gulf states. Should Iran become more unstable , the resulting turmoil could be felt across the region.

In addition, should Iran's military, policy and economic turmoil lead to a new political system, it could disturb Gulf countries. Neither a Muslim majority democratic government nor a more hard-line nationalist variant in Iran would sit well with nearby Gulf monarchs.

Conversely, concerns that the Israeli and US bombing of Iran may actually lead to increased Iranian determination to pursue a nuclear program also worry Gulf leaders.

4. Living with Israel's military assertiveness

Israel, the unquestioned military power and sole nuclear weapons state in the region, has long posed particularly deep political dilemmas to Gulf Arab states.

The current challenge is how to balance the immense global unpopularity of the Israeli government's war in Gaza – including among Gulf Arab citizens – with common strategic interests the Gulf states hold with Israel.

Gulf Arab leaders face domestic and regional pressure to show solidarity for Palestinians and their aspirations for statehood.

Yet Gulf rulers also share strategic goals with Israel. Along with opposition to Iranian influence, Gulf states maintain strong military links to the US, like Israel. They also appreciate the economic and other security value of Israel's high-tech products, including software used for espionage and cybersecurity .

This helps explain the UAE's 2019 decision to join the short list of Arab states with full diplomatic relations with Israel. Hamas attacked Israel in 2023 in part to stop Saudi Arabia from following suit – something that might have further sidelined Palestinians' bargaining power.

Indeed, moves toward open Saudi diplomatic recognition of Israel were stopped by Hamas' attack and the global backlash that followed Israel's ongoing devastation of Gaza.

Saudi Crown Prince Mohammed bin Salman, right, welcomes President Donald Trump for the group photo with Gulf Cooperation Council leaders during the GCC Summit in Riyadh, Saudi Arabia, on May 14, 2025. Photo: Alex Brandon / AP via The Conversation

Gulf leaders may still believe that normalized ties with Israel would be good for the long-term economic prospects of the region. And Bahrain and the UAE – the two Gulf Arab states with diplomatic relations with Israel – have not backed away from their official relationship.

Yet expanding open relations with Israel further, and taking in other Gulf states, is unlikely without a real reversal in Israel's policy toward Palestinians in both Gaza and the West Bank .