Since the outbreak of the Iran war, Gulf Arab states face escalating attacks on critical infrastructure that threaten their economic model built on connectivity, investment, and stability. Gulf leaders now seek to recalibrate security policies while avoiding regime collapse in Iran, which could destabilize the region further. Despite all negative implications, the conflict also creates opportunities for deeper EU-Gulf cooperation in maritime security, economic resilience, energy transformation, and dialogue on managing relations with Iran in a fragile regional order.

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IN THE EYE OF THE STORM: THE GULF BUSINESS MODEL ON THE BRINK‍
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Since the outbreak of the Iran war on 28 February, the Arab Gulf states have found themselves at a center of a rapidly escalating crisis. From their perspective, a nightmare scenario is unfolding: a war is being imposed on them that they do not regard as their own. Recent drone and missile strikes on critical infrastructure such as oil refineries in Bahrain or Saudi Arabia, data centers in Bahrain and the United Arab Emirates (UAE), airports in Kuwait and Dubai, and desalination plants in Bahrain illustrate this dynamic. These attacks target the most sensitive nodes of the Gulf states’ business model, which is built on innovation, investment, infrastructure, and international connectivity.

For Gulf governments that have increasingly positioned themselves as diplomatic brokers, convening platforms, and hubs of interconnectivity, the current situation represents a pivotal test. A prolonged war risks drawing them deeper into a confrontation they have long sought to avoid. In recent years, several Gulf states have pursued active de-escalation with Iran. Mediators such as Oman, often referred to as the “Switzerland of Arabia,” and Qatar facilitated indirect negotiations between Tehran and the Trump administration. Meanwhile, Saudi Arabia advanced a broader regional de-escalation initiative, adopting a “not alone” approach founded on dialogue and diplomacy. This shift culminated in the restoration of diplomatic relations between Riyadh and Tehran in March 2023 after years of Cold War-like estrangement. This omni-balancing approach was driven by pragmatic calculations: Despite internal divergences, Gulf states share a structural dependence on regional stability. Leaders in Riyadh, Doha, and Abu Dhabi increasingly portray themselves as modernization managers and diplomatic entrepreneurs seeking to diversify their economies through external partnerships and investments in tourism, advanced technologies such as AI, entertainment, and global sports. By embedding themselves deeply in global networks of finance, infrastructure, and diplomacy, Gulf states hoped to become indispensable – and therefore more secure – in an era of rising geopolitical tension.

The outbreak of the war has placed this strategy under severe strain. Long-standing reliance on US security guarantees has not shielded Gulf states from attacks but has rather exposed their vulnerability. At the same time, rapprochement with Iran appears to have produced no deterrent effects, while normalization with Israel through the Abraham Accords has not delivered broader regional de-escalation. As a result, Gulf leaders now find themselves surrounded by powerful but unpredictable actors whose priorities do not necessarily align with regional stability or economic integration. Frustration toward Iran, Israel, and the United States has therefore intensified. Many policymakers argue that despite investing significant diplomatic, financial, and security capital into alliances and reconciliation efforts, these partnerships have not strengthened their core security objectives.

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RECALIBRATING SECURITY AGENDAS: PROTECTING A REPUTATION AS ARCHITECTS OF PEACE AND PROSPERITY
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Against this backdrop, Gulf states are increasingly compelled to recalibrate their security agendas – in particular towards Iran. Gulf governments recognize that geography cannot be changed: regardless of the outcome, they will have to coexist with Iran. For this reason, most Gulf leaders have little interest in regime change in Tehran. State collapse raises fears of a Libya-style scenario marked by anarchy, fragmentation, and competing militias. Such instability would pose immediate risks to the Gulf’s neighborhood. Spillover dynamics in Iraq, Lebanon, and Pakistan already suggest how a prolonged war could trigger wider destabilization through migration flows, supply disruptions, and mounting economic pressure. In societies sensitive to economic uncertainty, these developments could also erode the credibility of leaders who have long promised stability and prosperity.

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This reputational dimension makes the current moment particularly sensitive. Over the past decade, Gulf governments have invested significant political capital in presenting themselves as brokers of peace and drivers of economic modernization. Their emergence as middle powers and logistical hubs depends on a stable international environment with secure trade routes and reliable energy flows. If the regional order becomes more fragmented and conflict-driven, this model will face serious strain. In such a context, Gulf states are likely to pursue broader partnerships and overlapping alliances to spread risk and preserve their role as anchors of regional stability and economic connectivity.

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EUROPE AS A PARTNER OF NECESSITY IN TIMES OF REGIONAL ESCALATION  
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In the current war, Europe is not officially involved and takes a disunited position, but it hardly qualifies as a bystander. Several EU member states are indirectly supporting US operations through intelligence cooperation, logistical access, and defensive deployments, whereas others want to stay out of the conflict. For instance, the United Kingdom has allowed US forces to use its bases for operations and interception missions, while France and Italy have started exchanges with Iran on the blockade of the Strait of Hormuz. European navies, including those of France, the Netherlands, Greece, and Spain, are also discussing or preparing deployments to secure maritime routes such as the Strait of Hormuz, reflecting Europe’s strong interest in safeguarding global shipping and energy flows even while avoiding formal participation in combat operations. Whereas Spain, for instance, has taken a very critical position on the US-Israeli attacks on Iran, other European governments, such as Germany, have adopted positions that support the Israeli-US strikes on Iran while downplaying concerns over violations of international law.

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Despite those intra-European divergences and differences, Europe and the Gulf states share several threat perceptions, creating a window for closer cooperation. The European Union signaled solidarity with the Gulf states during the EU-GCC emergency meeting on March 5, 2026. Both sides depend on open trade corridors, stable capital flows, and the containment of irregular migration and terrorism. In this sense, their core interests largely converge in the current crisis. Several short- and mid-term avenues for cooperation, therefore, emerge.

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• First, maritime security is a particularly promising area. Europe is already present in the Red Sea through the EU’s ASPIDES missions, which could be expanded to address potential attacks by pro-Iranian proxies such as the Houthis in Yemen. Although the Houthis have not yet entered the conflict directly, their capacity to disrupt shipping lanes in the Red Sea and the Bab al-Mandab Strait has already been demonstrated in previous crises. For both Europe and the Gulf states, secure maritime routes remain vital for global trade and energy flows. For Saudi Arabia in particular, the Red Sea represents a critical geostrategic hinterland. The kingdom can partially bypass the Strait of Hormuz, blocked by Iran, by transporting oil from its eastern production facilities, including Abqaiq, through the East-West Pipeline to the port of Yanbu on the Red Sea. While this route cannot fully replace exports through the Strait of Hormuz, it provides an important alternative. However, should the Houthis enter the conflict and the Red Sea become another theater of escalation, Saudi export routes and European energy supplies would be at risk. In such a scenario, closer European-Gulf maritime security cooperation would become essential to safeguard energy flows and regional stability.

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• Second, Gulf states and Europe rely on each other in terms of economic development. In a scenario in which trade routes and energy supply are disrupted in the long run, both economies will suffer. Therefore, closer coordination in defense, energy diversification, know-how transfer, future technologies, resilient tourism infrastructure, and people-to-people exchange could accelerate the potential of a European-Gulf economic partnership. Such cooperation would be driven by mutual interests and growing pressure in light of the ongoing conflict, and could build on the strategic commitment outlined in the EU strategy with the Gulf Cooperation Council (GCC), as well as enhanced economic initiatives from Member States such as Germany, France, or Italy.

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• Third, Gulf states recognize that Iran – however threatening to their security – will remain a permanent neighbor as they cannot change geography. The future trajectory of the Iranian state remains uncertain, with scenarios ranging from state fragility to a military-nationalist consolidation or even gradual political reform. Regardless of the outcome, Gulf governments will have to develop a modus operandi to manage relations with a potentially more hostile Iran. Trust in reconciliation may have eroded for now, yet pragmatic relationship management will remain necessary for both security and economic reasons. Europe faces a similar challenge in preparing for a post-war regional order that avoids further escalation or fragmentation. This creates space for a structured EU-Gulf dialogue on Iran, aimed at exploring joint strategies for managing relations with Tehran while preventing renewed regional destabilization. In this context, both sides may seek greater strategic autonomy, particularly given concerns in Europe and the Gulf about the unpredictability of US policy under President Trump.

At the same time, neither Europe nor the Gulf acts as a monolithic bloc. Within Europe, diverging positions on the war have become increasingly visible, complicating coordinated crisis management. While governments such as Spain openly reject the Israeli-US strikes as violations of international law, others, such as Germany, have taken a more supportive stance toward Israel. These differences highlight internal fault lines that limit Europe’s ability to project a unified diplomatic approach. A similar dynamic exists within the Gulf region. In times of external pressure, Gulf states tend to close ranks, as is currently the case. Yet underlying rivalries and strategic competition have not disappeared and may re-emerge once the immediate crisis subsides. Regional cooperation, therefore, often depends on pragmatic coordination rather than deep political alignment.

However, such divergences should not prevent Europe and the Gulf states from intensifying cooperation in practical terms. One option would be the establishment of a regular coordination platform that goes beyond intergovernmental dialogue. By bringing together policymakers alongside experts from think tanks, mediation institutions, and public diplomacy networks, both sides could institutionalize exchanges on shared concerns. A more structured European-Gulf dialogue of this kind would help identify converging interests and support the development of joint approaches aimed at promoting de-escalation and dialogue rather than further polarization.

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