The Long Shadow of the Iran War

President Donald Trump’s announcement, on June 14, of the end of the war in Iran and the reopening of the Strait of Hormuz came as a relief to countries around the world. A negotiated settlement was in the United States’ interest, but its likely terms fall far short of what Washington hoped the war would achieve. After nearly four months of fighting, concerns over Iran’s nuclear program, ballistic missile arsenal, and support for proxies across the Middle East remain largely unresolved. The regime that Trump set out to change is still standing, and it may now be set to receive economic relief in exchange for restoring free passage in a strait that was open before the war began. Iran has emerged from the conflict battered but in a stronger strategic position, with its regime and its ability to threaten the region intact. This outcome, after months of destruction and global economic disruption, is the greatest foreign policy failure of both of Trump’s terms. And the consequences of that failure will persist long after the war ends, making the United States’ growing strategic challenge in the Middle East even more difficult to address.

Since the collapse of the Soviet Union, the United States underwrote a regional order in which the Gulf depended on Washington for its security, sanctions and military deterrence contained Iranian aggression, and a track toward Arab-Israeli normalization slowly advanced. This arrangement kept oil flows stable, limited Iranian and Chinese influence, and positioned Washington as the indispensable broker of regional stability. When the United States and Israel launched an attack on Iran at the end of February, this status quo was already fraying. But the fighting accelerated its breakdown.

For many Middle Eastern states, the problem with the war’s resolution is not only that the United States was unable to achieve a decisive victory against Iran but also that throughout the conflict, it was erratic and unpredictable. This has damaged confidence in Washington’s ability to maintain its role as the sole guarantor of stability in the Middle East. As Washington’s credibility erodes, U.S. partners in the region have resorted to forming new coalitions that afford them greater agency.

States in the Middle East are coalescing on two opposing sides. On one side is the Abrahamic coalition, anchored by Israel and the United Arab Emirates, which is aligned closely with the United States and sometimes includes Greece and India on military, economic, and energy issues. The roots of this bloc go back to 2020, when Israel normalized relations with the UAE, Bahrain, and Morocco in the Abraham Accords, brokered by the first Trump administration. Israel and the UAE are brought together primarily by their shared perception of the Iranian threat, but also by their growing respective rivalries with Turkey and Saudi Arabia and their deepening commercial ties in technology, trade, and investment.

On the other side is an Islamic coalition, which is anchored by Sunni heavyweights such as Saudi Arabia, Turkey, Pakistan, and increasingly Egypt. These regional middle powers still rely on Washington for their security, but they have moved closer together in response to perceived threats coming not just from Iran but also from Israel, as it projected power beyond its borders in Gaza and the West Bank, Syria, Lebanon, and the Horn of Africa.

The United States’ prosecution of the war against Iran has further convinced countries on both sides of the divide that their deep dependence on Washington could be a liability and that they need to develop greater local agency. “The days when a phone call from Washington issued instructions which we were quick to follow are behind us,” a senior official explained to one of us. “We are no longer interested in being an American satellite state. … We are partners, even if junior partners.”

China, meanwhile, is taking advantage of this shift, positioning itself to play a greater role in the postwar Middle East without having to assume the burdens of leadership that Washington once bore. Aspiring middle powers, such as India and Pakistan, are doing the same. The cease-fire does not mark the end of this chapter of conflict and regional division in the Middle East; it is instead driving a geopolitical realignment along new fault lines. That dynamic extends beyond the region: from East Asia to Europe to Latin America, most governments are reaching similar conclusions about Washington’s reliability, increasingly viewing alternatives to U.S.-centered security, trade, and diplomatic arrangements as a strategic necessity rather than a luxury. The Middle East’s realignment is thus a harbinger for U.S. partnerships around the world.

IRONS IN THE FIRE

When Iran began striking military and civilian targets across the Middle East in February, many expected the Gulf Arab states to close ranks against a common enemy. Instead, the war only widened a gap that had been growing between Saudi Arabia and the UAE, the Gulf’s two largest economies and de facto leaders.

Saudi Crown Prince Mohammed bin Salman and Emirati President Mohamed bin Zayed once worked in close alignment. They each consolidated near-absolute authority in their respective countries and launched ambitious national transformation projects. But as the two leaders developed different economic strategies and competitive interests, and backed opposing sides in the civil conflicts in Sudan and Yemen, their relationship cooled.

Then, in late 2025, the fracture became more visible. That September, Israel conducted a military strike in Qatar that killed one member of the Qatari security forces and five members of a Hamas negotiating team, who had been assessing a U.S. proposal to end the war in Gaza. It was the first-ever Israeli strike on a member of the Gulf Cooperation Council, or GCC, a political and economic grouping comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. And Washington did nothing in response. For Riyadh, the attack signaled that Israel, like Iran, could become a disruptive force that regional powers could not rely on the United States to contain.

Less than two weeks later, Saudi Arabia signed a mutual defense pact with Pakistan, a nuclear power and Israel antagonist, which states that “any aggression against either country shall be considered an aggression against both.” Since then, Pakistan has deployed 13,000 troops and a squadron of fighter jets to Saudi Arabia. According to reporting in late January, Saudi Arabia was also considering a similar defense agreement with Turkey and held talks with Egypt and Somalia to form a military coalition to counter Israeli and Emirati influence in the Horn of Africa. The result is a Saudi Arabia that is positioning itself at the center of a regional coalition that Washington did not build and cannot fully control.

The UAE has drawn sharply different lessons from the war. Whereas Riyadh views Israeli military unilateralism as a threat requiring a regional counterweight, Abu Dhabi has come to see Israel as the most capable and reliable security partner in the region. When Iranian missiles and drones began landing in the UAE, Israel offered air defense assistance without prompting. Egypt, despite years of Emirati support, failed to provide immediate help, only deploying fighter jets after weeks of criticism from the UAE. As a result, Abu Dhabi has deepened its defense and intelligence cooperation with Israel and the United States, expanded the economic ties cemented by the Abraham Accords, and positioned itself as the anchor of the pro-Israel bloc in the emerging regional order.

These alignments are not rigid. Egypt, Greece, and Israel continue to cooperate on energy issues as members of the Eastern Mediterranean Gas Forum, which was inaugurated in 2019. Saudi Arabia and the UAE are both GCC members and continue to consult each other on countering Iran. But the larger trend was clear even before the war: the region’s major powers are converging into rival camps on the issues that matter most to their national security—Israel and Iran.

WRITING ON THE WALL

The war in Iran did provide some common ground. Both coalitions agree that Tehran is a threat that must be contained, and they view the war as a strategic setback in that regard. For the most part, both blocs also believe that Trump betrayed their security and national interests by allowing Israeli Prime Minister Benjamin Netanyahu to drive the offensive, since Israeli strikes against Iranian energy installations precipitated Iranian counterattacks in Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE. And the two blocs agree that the United States is too narrowly focused on reopening the Strait of Hormuz and closing Iran’s nuclear file, while it pays too little attention to Tehran’s thousands of drones, surviving missile arsenal, and support for formidable militias in Iraq, Lebanon, and Yemen.

The war’s end, however, underscores where the two coalitions diverge most profoundly: how to meet the Iranian challenge once a deal is done. Saudi Arabia and its coalition partners hope to leverage their collective influence and closer coordination to balance against, deter, and possibly reach an accommodation with the Islamic Republic. The Abrahamic coalition, by contrast, views the Iranian regime as a permanent and irreconcilable threat that must be confronted. Rather than joining the Saudi-led effort to exert leverage against Iran, Abu Dhabi is intensifying its efforts to amass hard power and deepening its defense ties with Israel and the United States. In simple terms, the opposing policies are containment and continuing confrontation.

The coalitions also disagree about Israel’s role in the Middle East. Whereas the UAE increasingly sees Israel as central to the emerging Middle Eastern order and, after the war, to its own security, the Islamic coalition is increasingly united by a desire to balance against what its members see as unchecked Israeli power. Since the war in Iran started, on February 28, Israel has expanded occupations in Lebanon, the Palestinian territories, and Syria. In Lebanon, Israel has favored a military campaign against Hezbollah and pressure on Beirut to eliminate the militia’s strategic weapons, whereas Riyadh prefers a more gradual approach that could still include dialogue with Tehran. In Syria, Israel appears to prefer a weak, fragmented country; Saudi Arabia and Turkey, on the other hand, seek to stabilize and rebuild the state under the Islamist government led by Ahmed al-Shara. Meanwhile, the Palestinian issue continues to resonate strongly across the Arab and Muslim worlds. The anger over the war in Gaza and violence in the West Bank has not receded, narrowing the political space Arab governments have to work with Israel. The absence of any credible path toward Palestinian self-determination under Netanyahu has pushed Saudi Arabia to shelve normalization with Israel in favor of greater cooperation with its fellow Sunni middle powers and an uneasy détente with Iran.

This rift extends beyond security, because the two coalitions have different visions for the future of the Middle East as renewable energy competes with oil. In early May, Abu Dhabi left OPEC, the Saudi-dominated alliance of oil producers. The UAE is already the Middle East’s most diversified economy, with robust finance, real estate, tourism, logistics, and technology industries. By leaving OPEC, it has positioned itself to export more oil in the near term, while demand and prices are still relatively high, and channel the proceeds toward long-term bets on technology and digital infrastructure.

Saudi Arabia stands to lose from the development. The UAE is OPEC’s third-largest producer, and its exit means that global oil production may be less restrained and its oil prices therefore lower. This trend would undermine the fiscal calculations that Riyadh’s economic transformation depends on. Saudi Arabia has been trying to catch up to the UAE economically. Its Vision 2030 initiative to modernize and diversify the country’s economy away from oil has made progress, but it remains far from achieving many of its targets, including the goal of attracting $100 billion in annual foreign direct investment by 2030. (Riyadh drew only $35.4 billion in foreign direct investment in 2025, while the UAE took in $45.6 billion.)

Abu Dhabi may also reduce or end its participation in other Saudi-dominated institutions, including the Arab League, the Organization of Islamic Cooperation, and even the GCC, further eroding the institutional architecture that once gave Riyadh a platform for projecting leadership in the Arab world. There are already signs that the GCC has split along the lines of the Abrahamic and Islamic coalitions, with Kuwait and Qatar moving closer to Saudi Arabia, and Bahrain tilting toward the UAE. (Oman has become an outlier that coordinates closely with Tehran.) The result is a growing gridlock in the region’s main multilateral bodies, which require consensus agreements.

IT’S ALL RELATIVE

The broader lesson of the war is that the Middle East is moving deeper into a “G-Zero” world, in which no single power is both willing and able to guarantee order. The United States remains the region’s main security actor, but local confidence in Washington has weakened. Regional states are now hedging more openly, diversifying their partnerships, and seeking greater strategic autonomy. Egypt, Pakistan, Saudi Arabia, and Turkey have also begun to play a de facto balancing role, while Israel and the UAE deepen their defense and economic ties with Washington and with each other.

China is the chief geopolitical beneficiary of this shift. Its advantage lies not in hard-power projection but in contrast. To many countries, Beijing appears more predictable, less ideological, and less prone to abrupt policy swings than Washington does. China has no enemies in the Middle East and has shown little desire to become the region’s security guarantor, with all the military burdens such a role would require. Nor does it need to fill that role. In a fragmented region wary of volatile U.S. policy, China can expand its influence through diplomacy, trade, infrastructure, technology, and mediation.

The cease-fire between the United States and Iran may present China with its clearest opportunity yet to shape the postwar regional order. Although Gulf and regional states are expanding defense ties with countries such as France, South Korea, Ukraine, and the United Kingdom to reduce dependence on the United States, they are also broadening their economic and technological relationships with China. Beijing could present itself as the outside power best suited to work with both sides of the region’s new divide.

Given the likelihood that Iran will remain a threat to its neighbors even after an agreement is finalized, Islamic coalition countries led by Saudi Arabia are looking for ways to regulate regional tensions. One idea that Saudi Arabia raised, according to some diplomats, is a nonaggression pact between GCC countries and Iran modeled on the Helsinki process that eased Cold War tensions in Europe in the 1970s. Beijing is well positioned to mediate such an arrangement, given its strong ties with states in the region, its leverage over Tehran, its relative impartiality, and its role in brokering the Iranian-Saudi normalization agreement in 2023, which restored diplomatic relations between the two rivals and created the first sustained channel for managing their rivalry in decades. The prospects of such a pact are unclear, but they appear stronger than Trump’s efforts to expand the Abraham Accords. And it would mark a major diplomatic rebalancing in the Middle East toward the Chinese orbit, with implications that could extend to the proxy conflicts in Iraq, Lebanon, and Yemen. Meanwhile, although the Abrahamic coalition countries are likely to stay more solidly within the United States’ security arena, they may choose to expand their work with China on trade, logistics, energy, and digital infrastructure.

JUST THE BEGINNING

The most likely outcome of this war is a more polarized and fragmented Middle East in which existing multilateral institutions weaken, rival coalitions harden, and outside powers compete for influence. China, as well as India, Pakistan, and others, will make further inroads, expanding their economic and diplomatic role while avoiding the costs of hegemonic leadership. This trend is unlikely to remain limited to the Middle East.

Governments across the world are already acting on a shared diagnosis: the United States is no longer reliable, and reducing long-term dependence on Washington has become a strategic imperative. Europe is building toward autonomy through higher defense spending, nascent European command structures, and a growing emphasis on non-U.S. arms procurement—reducing Washington’s leverage over European foreign policy and straining the interoperability on which NATO’s collective defense depends. In Asia, Japan has relaxed its postwar restrictions on arms exports, and South Korea is exploring sovereign nuclear capabilities that would have been inconceivable a decade ago—developments that signal an erosion of the extended deterrence guarantees that have underpinned the U.S. alliance architecture in Asia for over 70 years. In Latin America, countries are focused more on developing EU and intraregional trade agreements than U.S.-centered frameworks. The pace and the institutional depth vary across regions, but the direction of travel is the same.

As in the Middle East, China need not take on the burdens of replacing the United States to exploit these shifts. In Asia, its dominant positions in batteries, electric vehicles, and the critical minerals that underpin the energy transition make it an indispensable commercial partner for major energy importers regardless of their security ties with Washington. Beijing understands that influence flows not to the power that is willing to guarantee order but to the one that is best positioned to mold what replaces it.

The Iran war has done more than reshape the Middle East. It has accelerated a redistribution of power along an axis stretching from the eastern Mediterranean to the Indian subcontinent, weakened the U.S.-led regional order, and opened new space for competitors. But if the Middle East is the first region to move definitively into a G-Zero world, it will not be the last.

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