Transcription
It was a tense scene. More than a hundred US aircraft were in the air. Bases and warships across the region all moving on the same mission, breaking Iran's blockade of the Strait of Hormuz. There was one country this mission needed more than any other. It's runways, it's airspace. That country was Saudi Arabia.
But Riyadh backed down. It just refused to help. It wanted de-escalation with Iran. The mission went on without it. But American officials admitted at the time that the damage wouldn't easily undo itself. Washington's response to being told no was brutal. It was a threat to pull the troops, the jets, and the air defenses that Saudi Arabia depends on out of the country entirely.
Every so often the region of West Asia or the Middle East gets a war that changes everything. 2026 has done something similar, if not bigger. From here on out, everything looks different. The US, Israel, Iran, Saudi Arabia, and [music] other Gulf states, they are all trapped in an ugly dance. So what's the link? Let's find out.
The West Asia region is prone to wars that flip the equation on its head each time. In 1948, it was the creation of the state of Israel and a Palestine fault line that was never closed since. In 1967, six days of war with Israel and the entire Arab world's confidence collapsed along with it. Then the Iran-Iraq War between 1980 and 88 turns Tehran into the most feared, most isolated power in the region and turns the Gulf into Washington's very nervous clients. Then came 1990, which planted American military power permanently in the sand. Again, changing the region forever. Then in 2003, the US brought Iraq to its knees. Five wars, different decades, different players. But each time the equations changed, the geopolitics was altered.
Going into this war, the American footprint here was enormous. Roughly 40,000 troops in the region, bases across at least 19 sites in 10 countries, eight of them permanent. Bahrain alone hosts the US Navy's fifth fleet. None of that stopped Iranian missiles and drones from reaching wealthy, heavily defended Gulf monarchies anyway. And that's the real headline. Not an attack that happened, but that your untouchable feeling turned out to be a promise nobody could actually keep.
And this is where the second-guessing began. When Washington launched Project Freedom, the operation meant to break Iran's blockade of the Strait of Hormuz, it needed Saudi Arabia's runways and Saudi airspace. But Saudi Arabia said no. The one base the mission needed most simply wasn't available. But because Saudi Arabia said no, the US is threatening to pull out roughly 2,300 troops, fighter jets, and Patriot air defense batteries, the very hardware that shields Saudi oil infrastructure from Iranian attacks. The perils of saying no to the US.
Saudi Arabia wasn't alone in its frustration, though. Oman's foreign minister, who'd spent months quietly mediating between Washington and Tehran, said that he was dismayed the strikes undercut real diplomacy. Turkey's Erdogan called the strikes a clear violation of international law. The region is fatigued. A shared threat is supposed to unite a block. This one didn't. Gulf states took visibly different lines on Iran throughout the war, and that split bled straight into the oil politics. The UAE's exit from OPEC, for example, layered onto a scramble for market share among Gulf producers. And it exposed a rift years in the making.
Then came the short-lived ceasefire, and it didn't bring relief either. It stopped the shooting, but Iran came out of it politically intact and still holding real influence over the one straight the entire Gulf economy still depends on. For Gulf capitals, that's an open question about long-term security, not just a resolution. So, what do you do when the guarantee looks shakier and your own block is just fractured? You build a second option.
The Gulf states are keeping channels open with Iran, deepening ties with China, [music] and it isn't only the Gulf. In June, Netanyahu of Israel told his rarely reserved officers that Israel needs to break free of dependency on the US and build its own arms industry. And in July, after US Vice President J.D. Vance called America Israel's only powerful ally left anywhere in the world, >> If I was in the cabinet of the Israeli government, I might not be attacking the only powerful ally that I have anywhere left in the entire world. >> Netanyahu pointed to support from India instead. An Israeli Prime Minister invoking India amid rough ties with the US. It's hedging. It's preparing for the future.
Meanwhile, Gulf states like Saudi Arabia and the UAE are increasingly pricing oil in yuan. They all have the same instinct underneath. Build a plan B quietly in case Washington isn't there the next time the way it was this time.
Now, to the receipts. The Pentagon's own estimate puts Washington's direct cost of this war at roughly $29 billion. All that money for All that money for munitions, logistics, deployments. Gulf producers have lost billions and billions in oil revenue. Recovery, by most estimates, will take years. But, look closer at where that money actually went. Saudi Arabia burned through most of its Patriot interceptor stockpile, and it did so defending against a fraction of that cost in cheap Iranian drones and missiles. Expensive precision hardware fired at disposable threats over and over. And interceptor production is capped at a single factory's output. So, new orders don't arrive that fast. They get in line for years behind everyone else's order, too.
Which means that the war has big losers. Gulf states paying for the missile and the interceptor that stops it. And Iran paying in isolation and wrecked infrastructure. But, this situation also has a much smaller, much steadier set of winners. The handful of companies that build the interceptors, signing new multi-year contracts no matter who's winning the war. Nobody has to win a war like this for someone to profit from it.
Israel leaves this war with the clearest tactical win in the region. But, strategically, that's not so much the case. And it cost something to get there. Interceptor stocks drawn down. The Americans are disillusioned. Meanwhile, a parallel front with Hezbollah in Lebanon kept Israeli attention and air defense split across two borders at once, right when the stockpile was already under strain from Iran. Now, add that strain on the Abraham Accords as well. Relationships built over the last several years, a reputation increasingly described even by neighbors as damaged. Israel is being seen as a regional hegemon rather than a defender, and a prime minister is publicly being questioned. Now, Israel is more feared right now. It is not obviously more secure, though.
And through Iran, the Gulf, Lebanon, and everything else, where did Palestine go? Palestine is largely off the front page. After Hamas announced it had dissolved the body that governed Gaza, the newly formed board of peace put out its own framing instead. One authority, one law, one weapon. Every weapon in Gaza brought under a single new committee's control. And ultimately, success depends on whether Hamas and Israel can even stop fighting. It's a strange twist. The conflict that used to sit at the center of every Middle East story is now a subplot to a bigger one. Iran, the Gulf, and the question of who actually runs security in this region. So, pull that thread all the way through.
40,000 US troops and 19 bases going in. $29 billion spent, 50 billion in Gulf oil losses and even more, and a cease-fire that's already dead. Saudi Arabia saying no to Washington mid-war, the UAE walking out of OPEC, Gulf states courting Beijing and settling trade in yuan, and Israel's own prime minister talking about independence from the one ally that just fought alongside it. The old Middle East ran on that assumption for 50 years, but nobody's sure yet what runs the next one. >> Mhm.