Gulf Commerce at Risk as Shipping Threats Multiply in Vital Waterways

Gulf residents and businesses that depend on open shipping lanes face a compounding threat. Iran continues to menace Gulf shipping, economic infrastructure, and the free passage of commerce through critical waterways that underpin global energy supplies and international trade. Simultaneously, escalating Houthi activity in the Bab el-Mandeb raises the prospect of two vital maritime chokepoints closing at once, a scenario with direct consequences for fuel prices, supply chains, and the daily economic lives of millions.

Recent coordinated messaging between senior Saudi and Emirati officials suggests a possible thawing of tensions between the two largest Gulf powers. Whether this diplomatic signal translates into concrete joint action remains uncertain, but the timing carries real weight. A genuine Saudi-Emirati partnership on regional security would give Gulf states their best chance to manage the Iranian threat without depending entirely on U.S. military support or bilateral negotiations with Tehran.

The core problem is straightforward. The Gulf cannot count on Washington or direct talks with Iran to resolve its security dilemma. U.S. commitments have proven unreliable, and Iran shows no sign of abandoning its strategy of threatening neighbors and leveraging control of the Strait of Hormuz as it recovers from recent military losses. What the region needs instead is a coordinated Gulf response built on three interlocking pillars.

The first is credible deterrence. Iran’s drone attacks on economic targets have exposed the limits of even advanced missile defense systems. Gulf states must now establish clear red lines they are willing to defend collectively. At minimum, this means committing that an attack on any Gulf country will trigger a unified response from all Gulf capitals. That response need not be military; it could mobilize the economic, diplomatic, and military leverage that Gulf states possess when acting in concert with European and Asian partners.

Economic tools may ultimately prove more effective than military ones. Gulf states could cut off remaining trade with Iran, shut down the exchange houses and shadow companies that facilitate Iranian sanctions evasion, and close the transshipment routes that have long sustained Iranian commerce despite international restrictions. These measures only work, however, if Saudi Arabia and the United Arab Emirates enforce them consistently. If one Gulf state allows Iranian ships through while others do not, or if one capital offers safe harbor for Iranian business while others refuse, Iran simply shifts its operations and the deterrent collapses.

The second priority involves conditional economic engagement. Some Gulf countries appear to be providing limited economic relief to Iran, such as unfreezing assets, in hopes of purchasing temporary calm. This approach backfires. Gulf states should instead reserve significant economic support as a reward for genuine Iranian restraint, not as a down payment on temporary peace. Conditioning such support on Iran’s commitment to cease all direct and indirect attacks on the Gulf, and to abandon attempts to control or tax shipping through the Strait of Hormuz, would give Tehran an incentive to change behavior rather than simply escalate demands.

The third essential element is maintaining freedom of navigation. If Iran gains administrative control over the Strait of Hormuz, it will exploit that leverage indefinitely to extract concessions from Gulf neighbors. Gulf states, including Oman, have already shown they can unite around opposition to Iranian mandatory shipping fees or Iranian-controlled lanes. That coalition must hold and expand to include major Asian energy consumers and European partners. Meanwhile, as Houthi threats intensify in the Red Sea, similar collective action to protect the Bab el-Mandeb becomes equally vital for the communities and economies that rely on uninterrupted passage through that corridor.

These three priorities do not require identical policies from every Gulf state. Individual countries will naturally pursue relationships with Iran reflecting their own geography, economics, and foreign-policy interests. Qatar’s economic weight and mediation skills, Oman’s close ties with Tehran, and Kuwait and Bahrain’s advocacy for coordination all have value in that mix. But Saudi Arabia and the United Arab Emirates hold the decisive military, economic, and diplomatic leverage. If they can translate recent positive messaging into sustained joint action, they will be far better positioned to contain Iranian aggression and potentially reshape the region’s security architecture on their own terms.

The window for building that partnership is open. How long it stays that way depends on whether the diplomatic signals of recent weeks harden into policy, or quietly fade as the next crisis reshapes the agenda.