Our Gulf allies have been royally screwed by the war in Iran. Even though many of them tried hard in the months leading to Operation Epic Fury to get the Trump/Vance administration to understand the dire consequences of an all-out war in Iran, they now face weakened economies, major oil market disruptions and massive regional instability, not to mention bombed out energy infrastructure that will take years and years and billions and billions to rebuild.
A Congressional Research Service report found that Iran fired more than 6,700 drones and missiles at Gulf Cooperation Council (GCC) states between February 28 and May 17 alone. All six GCC countries were attacked. In its April regional outlook, the International Monetary Fund (IMF) projected GCC economic growth of just 2 percent in 2026 – a 2.3-percentage-point downward revision from its October 2025 forecast. By July, economists surveyed by Reuters had downgraded most Gulf economies again as hopes for a rapid normalization of shipping through the Strait of Hormuz faded.
There is also understandable infuriation among them that the war has unraveled their reputation as regional safe havens for business and tourism – a huge blow for nations that have tried hard to transform the region into a center of finance, aviation, technology and tourism. Their airports, five-star hotels, and data centers have been bombarded; tourists have cancelled; expats are rethinking their futures; and real-estate deals are on hold. During the initial weeks of fighting, the World Travel & Tourism Council estimated that the war was costing the region around $600 million a day in lost tourism revenue.
Dubai billionaire Khalaf Ahmad Al Habtoor, chairman of the Al Habtoor Group, gave voice to that anger when he addressed President Trump in a post on X: “Who gave you the authority to drag our region into a war with Iran? And on what basis did you make this dangerous decision? You have placed the countries of the Gulf Cooperation Council and the Arab countries at the heart of a danger they did not choose.” He ended with this: “Who gave you permission to turn our region into a battlefield?”
And now – regardless of what happens from here – our allies are stuck with an empowered, resentful, defiant, and extremely ticked-off Iran that has nothing to lose.
