Iran takes hammer to Middle Eastern rivals’ global commerce, culture goals

Iran’s scattershot attacks on its Persian Gulf neighbors are taking a toll on the carefully crafted reputations of stability that countries such as Saudi Arabia and the United Arab Emirates have built in recent years, potentially disrupting billions of dollars in Western investment as the U.S. and Iran threaten to intensify attacks on energy infrastructure in the region.

Additionally, the Strait of Hormuz, the strategic waterway used to transport 20% of the world’s oil, has remained closed. The Iranian leadership has promised to keep it closed until attacks cease.

President Trump demanded Saturday that Iran reopen the strait within 48 hours or face attacks on its domestic power stations, which could cut electricity for millions of Iranians.

Iran said it would respond in kind and vowed to hit power sites across the Middle East, including those in Gulf states.

Iran has shown a clear desire to expand its targets over the past three weeks of war. It has struck at the energy infrastructure, civilian architecture and Western-linked financial centers in the Gulf’s Arab states.

Last week, Iranian missiles and drones struck Qatar’s Ras Laffan liquefied natural gas facility, causing “extensive damage” to one of the nation’s most productive energy centers.

Beyond sending troubling shock waves through global energy markets, Iran’s missile and drone barrages have called into question the contention that Western-friendly cities such as Dubai and Riyadh are insulated from the typical instability of the region.

“We’ve already seen attacks on data centers in the Emirates and Qatar, Amazon facilities that have been built in these places, because they seemed for the region to be relatively secure and safe, and they provide all sorts of cheap energy and a very attractive tax atmospheres for international companies,” said F. Gregory Gause, professor of international affairs at Texas A&M University’s Bush School of Government & Public Service.

“Now, with the safety issue front and center for at least a while, Iran doesn’t have to strike anybody else. You just have to say you might, and it vastly increases the risk premium,” he said.

Safety concerns have forced widespread airway closures, cutting off the Gulf region from one of its most lucrative business ventures. Airports in the UAE, Qatar and Saudi Arabia have shown steep declines in traffic since the war began in late February. Dubai International Airport, one of the busiest international passenger hubs, suspended all operations last week, stranding thousands of passengers.

More than 52,000 flights to and from the Middle East have been canceled since the Iran war began, and more than 50% of all planned Gulf flights have been canceled, according to travel industry site Travel Tourister.

Iran announced last week that it would begin attacking Western banks and companies whose technology has been used in the war. Those companies include industry titans Google, Microsoft, Palantir, Nvidia and Oracle. It apparently hopes to cause as much financial pain as strategic success.

Iran has focused much of its missile and drone attacks on the UAE and its two most populous cities, Dubai and Abu Dhabi. Some reports suggest that Iran has launched more than 1,700 missiles and drones at the country since the start of the war, comparable to the number it has launched at Israel.

The costs of defending against the attacks have been staggering. Some estimates suggest the total UAE expenditure on air defense is $1.3 billion to $2.6 billion. The UAE, like most other Gulf nations, has been able to intercept the vast majority of ballistic missiles and drones fired from Iran, but Tehran spends comparatively little on its attacks, and interceptors are expensive and difficult to replace quickly.

Although Gulf nations may be able to intercept more than 90% of incoming missiles, even a small chance of being hit can deter investors.

“Even if you account for some shading of the truth and some covering up bad instances, it’s actually quite good. But there are going to be a lot of people who could invest there or move there, who are going to be much more concerned about the 7% that didn’t get shot down and than the 93% that did,” said Andrew Leber, nonresident scholar in the Carnegie Middle East Program.

Gulf leaders have reacted with frustration and outright anger at Washington and Tehran over the conflict.

Sheikh Mohammed bin Abdulrahman Al Thani, the prime minister of Qatar, said the attacks constituted a “betrayal.” Qatar had been mediating indirect negotiations between Iran and the U.S. immediately before the war began.

Omani Foreign Minister Badr al-Busaidi told Western media that the two sides would reach an agreement, just days before the U.S. strikes.

Qatar’s foreign ministry expelled its Iranian diplomats after the attacks on the Ras Laffan LNG facility.

The UAE Foreign Affairs Ministry strongly condemned Iran’s attacks on the Gulf as an obvious violation of international law and subsequently closed its embassy in Tehran and withdrew its diplomats. Saudi Arabia declared that Iran’s attacks could not be justified because it had publicly disallowed the U.S. military to launch attacks from its bases in the country.

Still, Gulf states have been reluctant to intervene directly against Iran, which has left some American leaders frustrated.

Sen. Lindsey Graham, South Carolina Republican and a close ally of Mr. Trump, has consistently urged Gulf allies to join U.S. and Israeli forces in attacking Iran.

His most recent hawkish advice drew a sharp and rare rebuke from Dubai billionaire Khalaf Al Habtoor, who said the Gulf states “know who dragged the entire region into this dangerous escalation without consulting those he calls his ‘allies’ in the region.” He quickly deleted the post.

Mr. Al Habtoor’s post hints at lingering resentment in the region over the U.S. and Israeli decision to launch the war despite the concerns or objections of many Gulf leaders.

Mr. al-Busaidi told state-affiliated media last week that the goals of the U.S.-Israeli offensive are mainly to reshape the region to prioritize security reliance and diplomatic recognition of Israel.

Other Gulf officials are reportedly angry that Washington has not allocated sufficient resources to defend their territories. The U.S. is focused mainly on protecting its troops and assets in the region, along with Israel.

Still, the Gulf states’ reluctance to intervene in the conflict is not unlimited, Saudi Foreign Minister Prince Faisal bin Farhan said last week. He said Saudi Arabia has “very significant capacities and capabilities” to attack Iran if forced into that path.

Ultimately, Washington’s resistance to Gulf leaders’ mediation efforts underscores a clear imbalance in the partnership, Mr. Leber said.

“It doesn’t seem like these states, if they want to end the conflict, have much leverage with the United States in one direction, and don’t have much leverage with Iran and the other,” he told The Washington Times. “The fact that they can’t even get U.S. officials to stop hinting at a role played by Gulf States is, I think, a sign that they are very much not in control of the narrative and have currently, at least, very little inroads into the administration’s decision-making.”

The effects of the war have increased the likelihood that the Gulf states will reconsider their reliance on U.S. security agreements, especially as they seek to rebuild their image of stability.

However, Gulf states have so successfully integrated U.S. military training and assets into their security apparatus that fully disentangling these would be an expensive and lengthy process that could downgrade their security.

Gulf nations have few alternative security partners. China remains focused only on expanding its economic footprint in places such as Saudi Arabia. European nations are expanding their domestic militaries to counter Russian aggression. Some experts say the Gulf states are likelier to use public criticism of the U.S. and Israel to leverage concessions.

“The problem here for the Gulf states, going forward, is this war has demonstrated that they need a security partner; they’re tied into the American military right technologically in terms of intelligence training, all that stuff,” Mr. Gause said. “But finding an alternative to that is really hard. Even though I think that every Gulf leader will be asking themselves, ‘How did we let ourselves get dragged into this?’ They just don’t have any good options.”