The Illusion of American Protection: Gulf States’ Leverage, War, and the Case for Collective Security

There is a stark contradiction between the Arab Gulf states’ systemic importance to the global economy and Washington’s recurring disregard for their strategic interests.

The Arab Gulf States made every possible effort to prevent the United States from attacking Iran, knowing in advance that they would be among the biggest losers from such a war. Rather than listening to them, Washington appears to have prioritised Israel’s interests. As Kamala Harris, the former U.S. vice-president, stated at a Michigan Democratic Women’s Caucus event in Detroit, Trump “entered a war — got pulled into it by Bibi Netanyahu… a war that the American people do not want.”

This logic effectively traded Gulf stability for Israeli security calculations. It disregarded the fact that regional peace is essential to the Gulf States’ economic transformation programmes, which depend on attracting investment and expanding non-oil sectors, including tourism, logistics, technology, research, and knowledge-based development.

This was not the first time the United States ignored Gulf concerns. In 2003, Washington invaded and occupied Iraq despite Gulf Arab fears that toppling Saddam Hussein would destabilise the region and empower Iran. The current American–Israeli war on Iran should also be understood as an extension of Israel’s war on Gaza since 7 October 2023 and of a broader American project aimed at empowering Israel over its regional rivals under the slogan of “peace through strength.” In practice, this amounts to “peace through subjugation”: the defeat and destruction of Israel’s enemies.

The Gulf States possess significant leverage over the United States, yet have not used it to protect their own interests. A new security paradigm in the Gulf is needed: one not based on American protection, but on collective regional security. The war on Iran has exposed the limits of U.S. protection, underscored the centrality of resolving conflicts involving Israel to regional stability, and demonstrated the urgent need to move toward a collective Gulf security framework.

The Cost of War for the Gulf States

The consequences of the ongoing U.S.–Israeli war on Iran go far beyond the direct security damage to the Gulf States caused by Iranian strikes and the disruption of energy exports. Oil and gas losses alone are likely to exceed $100 billion because of the sharp reduction in Gulf exports through the Strait of Hormuz, while attacks on energy infrastructure have created additional long-term damage, including Qatar’s reported loss of roughly one-sixth of its liquefied natural gas (LNG) export capacity, valued at about $20 billion annually.

The war has also struck at the core of the Gulf’s economic transformation model. Gulf States depend on regional stability to attract capital, expand tourism, aviation, logistics, technology, services, and reduce their dependence on oil and gas. Yet the war has damaged this investment climate in measurable ways. Maritime war-risk insurance and freight costs through the Strait of Hormuz have risen sharply, with some estimates placing the added war-risk premium at $5–15 per barrel of oil.

Gulf financial markets have also reflected this loss of confidence: Dubai and Abu Dhabi reportedly lost about $120 billion in market capitalisation by late March, while Qatar and Bahrain’s exchanges fell by roughly 4% and 7%, respectively. Aviation and tourism have also been hit by jet-fuel shortages and elevated costs.

The losses are not limited to crude oil, LNG, and investment flows. Gulf economies also export strategic industrial products, including aluminium, fertilisers, petrochemicals, and helium, which are deeply embedded in global supply chains. The region produces roughly 8–9% of global aluminium output, Gulf countries account for about 36% of global urea exports, and Qatar alone supplies roughly 25–33% of the world’s helium. The closure of the Strait of Hormuz has therefore imposed several billion dollars in additional losses on these sectors, beyond the much larger losses in oil and gas exports.

The implications of these disruptions extend beyond the Gulf and the major Asian energy importers most directly affected by the Strait of Hormuz. For countries like Canada, whose economic ties with the Gulf span defence products, aerospace, energy, technology, agriculture, and infrastructure, Gulf instability is not a distant regional issue. Canadian exports to GCC states have grown steadily, while Canadian pension funds and investors hold substantial Gulf-linked assets. Any major war in the Gulf or disruption of maritime routes would therefore have indirect but meaningful implications for Canadian trade, global energy-market stability, investment exposure, and the multilateral institutions through which Ottawa engages the region.

Gulf States have also had to redirect financial resources toward emergency defence spending, infrastructure protection, and budget support. While no reliable aggregate figure is yet available, analysts expect Gulf Cooperation Council (GCC) military spending to rise as governments reassess their security assumptions after the war exposed the vulnerability of energy infrastructure, ports, airspace, and other strategic assets.

These losses raise two urgent questions: Why were the Gulf States unable to prevent the war? And what must they do to ensure they do not again fall victim to U.S.–Israeli adventurism in the region?

To answer these questions, it is vital to understand the sources of leverage the Gulf States possess — tools that could directly influence the United States if they chose to use them.

The Gulf’s Unused Leverage over Washington

Despite the declining U.S. dependence on Gulf oil since the early 2000s, the region remains central to Washington. The Gulf States sit at the heart of global energy markets, holding roughly one-third of global crude oil reserves and more than one-fifth of natural gas reserves. At the same time, the weakening of traditional Arab power centres after 2003 and 2011 has allowed the GCC states to exercise unprecedented influence over regional politics, diplomacy, finance, and security.

The United States’ military infrastructure in the region underscores this importance. Washington maintains a network of bases and military facilities across the Gulf and Iraq—spanning Bahrain, Qatar, Kuwait, UAE, and beyond—providing it with a broad and flexible operational footprint in the region. This network enables the United States to protect shipping lanes, conduct regional air operations, manage deployments, and project power across the Middle East.

Beyond military considerations, the Gulf States possess substantial financial weight through their investments in the United States and the broader system of “petrodollar recycling,” whereby oil revenues are reinvested in foreign assets, much of them in U.S. markets. These flows help sustain the global role of the dollar, provide liquidity to the U.S. economy, and lower borrowing costs. In 2025, Kuwait, Saudi Arabia, and the United Arab Emirates (UAE) held a combined total of approximately $1.19 trillion in U.S. securities. Additional direct investments by Gulf States support tens of thousands of American jobs: Saudi Arabia’s Public Investment Fund estimates that its U.S. investments have supported over 172,000 jobs.

Together, the Gulf States possess three principal sources of leverage: access to military bases and facilities, vast financial assets within the United States, and Washington’s reliance on them in the context of global competition with China. If used effectively, these tools could shape U.S. foreign policy in the Middle East.

On the financial level, the Gulf States could redirect part of their assets away from the United States, potentially exerting pressure on interest rates and financial markets. A shift toward pricing oil and gas in non-dollar currencies could further weaken Washington’s ability to use economic sanctions as a strategic tool. On the military level, they could impose limits on base access, overflight permissions, or logistical cooperation. Even signalling such shifts would raise the cost of ignoring Gulf interests.

There is little doubt that the use of such leverage would invite counter-pressure from Washington, including security and economic repercussions, and that Gulf States themselves may differ on whether to pursue such a course. However, such risks are not prohibitive. They can be mitigated through the diversification of international partnerships, including with China, Europe, Canada, and other global actors.

The Gulf States therefore possess sufficient leverage to raise the cost of Washington’s disregard for their interests. Their failure to prevent the war on Iran does not stem from a lack of power, but from their failure to mobilise that power through a coherent and collective diplomatic strategy.

This raises the central question: if American protection cannot be relied upon, what security framework should the Gulf States pursue to ensure they do not once again become victims of U.S.–Israeli policies in the region?

From External Protection to Regional Collective Security

The war has revealed several critical realities. As Iranian missile and drone strikes targeted American installations across the region, several bases were rendered effectively unusable, prompting the United States to quietly evacuate personnel from some facilities and repatriate hundreds of servicemembers from countries such as Bahrain and Kuwait. This dynamic underscored a fundamental paradox: installations originally intended to provide security for Gulf States had themselves become liabilities requiring protection.

The second reality is that regional conflicts are deeply interconnected. The war on Iran cannot be separated from Israeli military actions across the Middle East since October 7, 2023. This was clear in the scale of Iranian attacks on the UAE, which appeared to reflect Abu Dhabi’s close alignment with Israel. According to the Foundation for Defense of Democracies’ (FDD) Long War Journal, the UAE faced the largest share of Iranian strikes, more than double that of any other Gulf State. This shows that closer alignment with Israel does not necessarily enhance Gulf security; rather, it can increase exposure to regional escalation.

The third reality is that this war has never been about Iran’s nuclear programme. Iran’s nuclear programme was under tight supervision by the International Atomic Energy Agency (IAEA) under the Joint Comprehensive Plan of Action (JCPOA) until President Trump withdrew from the agreement in 2018. This war has evolved into an unlawful campaign aimed at decapitating Iran’s leadership and changing the regime. After failing to achieve that primary objective, it proceeded to target Iran’s infrastructure, including schools, universities, hospitals, bridges, water desalination plants, police stations, oil refineries, and more, with the intention of weakening the Iranian state by keeping it occupied with survival and reconstruction. Crucially, a weakened or destabilised Iran would not remain contained within its borders but would have spillover effects across the Gulf region.

The fourth reality concerns Iran’s deterrence doctrine. The war has underscored the centrality of both its missile capabilities and its regional alliances. These have proven indispensable to its ability to confront the United States and Israel and are unlikely to be relinquished absent total military defeat.

Taken together, these capabilities have produced a situation in which military escalation is no longer a viable path to decisive advantage. The United States and Iran have reached a state of strategic deadlock, in which neither side can improve its position through escalation alone: the destruction of Iran’s energy infrastructure, for example, would likely prompt Tehran to target energy facilities in the Gulf, producing catastrophic consequences for Gulf economies, the global energy market, and the United States itself through sharp price increases. Similarly, attempts to maintain a blockade on Iran for a prolonged period would likely be met by continued Iranian disruption of the Strait of Hormuz, and possibly by the extension of confrontation to Bab al-Mandab. These dynamics create a balance of deterrence that limits Washington’s ability to impose its terms militarily and makes a political settlement increasingly inevitable.

The final and most important reality is geographical. Geography shapes the conditions for cooperation and limits strategic choices. The security and prosperity of the Gulf States are therefore inherently linked to those of Iran. The disruption of the Strait of Hormuz has already demonstrated this interdependence, with immediate consequences for regional economies and global energy markets.

These realities point to the need for a fundamental shift in Gulf security thinking toward a regional collective security framework. Such an approach would require sustained dialogue with Iran to establish a shared charter governing regional security, potentially leading to a formal mechanism for collective decision-making.

For this framework to succeed, several conditions must be met. First, there must be agreement on the primary sources of threat. Second, security must be based on equality, ensuring that no state enhances its security at the expense of others. Third, certain security matters—such as the security of the Strait of Hormuz—must be managed collectively rather than unilaterally.

External actors may still play a limited but constructive role in supporting such a framework. In this regard, Canada could contribute to confidence-building, maritime governance, and technical cooperation without displacing regional ownership of security. With its emphasis on multilateralism and international law, Canada could help facilitate dialogue and provide expertise in areas such as maritime safety, infrastructure protection, and regulatory coordination.

Such external support, however, would not eliminate the deeper political obstacles facing collective security in the Gulf. Divisions among the Gulf States and the entrenched presence of U.S. military bases complicate the emergence of an independent regional security framework. Despite these challenges, the war has made one point unmistakably clear: reliance on external protection is no longer sufficient—and may even prove to be a liability. A shift toward a collective, regionally grounded security framework is no longer optional; it is necessary.

The Case for Gulf Agency

Ultimately, the U.S.–Israeli war on Iran reveals that the Arab Gulf States can no longer treat their security as something that can be delegated to the United States or tied to Israel’s regional calculations. The war has shown that U.S. military bases, massive Gulf investments in the United States, and the Gulf’s central role in global energy markets do not automatically translate into effective political influence when these tools are not mobilised through a coherent and independent Gulf diplomacy.

Gulf security, therefore, cannot be achieved through deeper dependence on U.S. policy or closer alignment with Israel. It requires a regional approach that recognises the interdependence of the Gulf States, Iran, and Iraq, and translates it into a collective security framework. This entails a shared regional charter, sustained dialogue, and agreed rules on non-aggression, sovereignty, and the protection of maritime routes. It also requires the Gulf States to act collectively and use their military, financial, and geopolitical leverage to shape outcomes, rather than merely absorb the costs of conflict.

The choice is clear: either the Gulf remains an arena for external conflicts, or it becomes a collective actor capable of defining and defending its own security.