Five weeks into the U.S.- Israeli military campaign against Iran, the Gulf Cooperation Council finds itself caught between two fires: the Iranian missiles overhead and an economy fracturing beneath its feet.

The alerts reached millions of phones across the UAE in the early hours of Monday morning. Three waves of notifications from the Ministry of Interior, each one a reminder that the war being fought in Iranian airspace had found its way to the streets of Dubai and Abu Dhabi. By 7:14am, UAE air defenses were still tracking and intercepting incoming missiles and unmanned aerial vehicles. By late morning, authorities declared the situation safe…for now.

That cycle of threat, interception, and fragile calm has become the rhythm of life across the Gulf over the past five weeks. What was conceived in Washington and Jerusalem as a targeted campaign to dismantle Iran’s military infrastructure has produced a sprawling regional crisis with consequences that no government in the region had fully prepared for.

Iran has launched more than 5,000 missiles and drones at Gulf Cooperation Council targets since the conflict began. The toll has been modest in human terms: 27 killed and over 274 injured across the GCC, but the psychological and infrastructural damage runs far deeper.

Kuwait has seen strikes on power generation plants and water desalination facilities. Bahrain has had an oil facility targeted. Qatar’s liquefied natural gas infrastructure at Ras Laffan, one of the largest such facilities on the planet, sustained a hit that forced the country to halt LNG production and declare force majeure on its export contracts. In Haifa, an Iranian missile struck a residential building, killing two people and wounding four, with two others still missing as of Monday.

In the UAE, residents have been advised repeatedly to shelter in place, avoid filming incidents, and follow official channels. The government’s messaging has been measured and consistent, designed to prevent panic. But no volume of official reassurance fully neutralizes the impact of waking up to air defense explosions before dawn.

Iran, meanwhile, has rejected Trump’s deadline to reopen the Strait of Hormuz by Tuesday, with a senior Iranian official telling Reuters that Tehran sees Washington as unprepared for a permanent ceasefire and will not accept being pressured into decisions under a timeline it did not negotiate. Pakistan has submitted a ceasefire proposal that Tehran says it is reviewing, though Iranian officials have been careful to frame their engagement as deliberation, not concession.

The strategic logic behind Iran’s campaign in the Gulf is transparent: if Tehran cannot match U.S. and Israeli airpower, it can strike at the arteries of the global economy and force Washington to feel the war’s costs far from the battlefield.

That logic is working. Under normal conditions, approximately 20 million barrels of oil move through the Strait of Hormuz every day, about one-fifth of global consumption. Qatar’s LNG exports account for roughly another fifth of the world’s liquefied natural gas trade. With the Strait effectively shut down and Qatari production halted, energy markets have absorbed a shock that analysts describe as historically unprecedented. Oil prices have climbed past $100 per barrel in some projections. Gasoline prices in the United States have reached their highest point since 2022. In Europe and Asia, natural gas prices are climbing even faster.

The United States cannot compensate for this volume of supply. American LNG terminals are operating near capacity, and crude exports average roughly 4.4 million barrels per day, a fraction of what normally flows through Hormuz. Washington is not positioned to replace Gulf energy exports in any meaningful timeframe.

For the GCC states themselves, this disruption reaches the foundations of their fiscal model. Hydrocarbon revenues fund government budgets, social programs, and the infrastructure of modern state life across the Gulf. A prolonged interruption forces governments to draw on sovereign wealth funds, which collectively hold trillions of dollars invested in U.S. and European markets. That disinvestment, if it materializes at scale, will carry its own consequences for financial markets far from the Middle East.

The one government that benefits from all of this is in Moscow. Russian oil, already selling at a discount due to Western sanctions and price caps, becomes more competitive as global prices rise. The United States has already waived sanctions on Russian vessels bound for India and on a German subsidiary of Rosneft. The war in the Gulf is quietly eroding one of the primary economic tools the West built to constrain Russia’s war effort in Ukraine.

The Gulf states have so far avoided direct retaliation against Iran. This is not a sign of weakness. Saudi Arabia, the UAE, Qatar, and their GCC partners possess meaningful military and intelligence capabilities. Their restraint is a strategic posture, and a deliberate one.

By refusing to strike back, GCC governments serve several goals at once. They avoid expanding the number of parties involved in the conflict. They preserve their standing as mediators, Oman and Qatar have both pressed for diplomatic resolution, and Riyadh has sustained its engagement within existing channels. They also undermine Iran’s legal argument at the UN Security Council: it is difficult to claim preventive self-defense against an adversary that declines to retaliate even when attacked.

Saudi Arabia has signaled that military options remain available if the conflict escalates further, but Riyadh’s silence in action sends its own message to Tehran, that the Kingdom does not intend to fight a war that, in its view, primarily advances Israeli strategic interests.

Yet restraint has its own political costs. GCC populations are watching infrastructure burn. The image of Gulf cities as islands of stability in a turbulent region, an image built painstakingly over decades and marketed to investors, tourists, and multinational headquarters, is under pressure in ways that no press release can fully address.

Washington has made this harder. The Trump administration launched a major military campaign without consulting its allies. It then applied pressure on them to do more, including demands that they help reopen the Strait of Hormuz, a task the far larger and better-equipped U.S. Navy has not attempted. The diplomatic relationship between Washington and its Gulf partners has frayed noticeably, even as those partners continue to host tens of thousands of American troops.

For residents across the Gulf, expatriates and citizens alike, the past five weeks have introduced a new layer of daily uncertainty that the region has not experienced in this form before.

The UAE alone is home to over nine million people, the vast majority of them foreign nationals from South Asia, Southeast Asia, Europe, and elsewhere. These communities have no formal voice in the political decisions being made around them, and many lack the resources to relocate. Monday’s wave of missile alerts produced genuine fear across those communities, not just inconvenience.

Businesses dependent on Gulf stability, logistics, aviation, hospitality, finance, are recalibrating. Dubai International, one of the world’s busiest airports, has had to manage its own operational pressures. Supply chains that route through the Gulf are being rerouted where possible and disrupted where they cannot be.

The social contract that Gulf governments have built with their residents rests on a promise of order, prosperity, and safety. That contract is being tested, and the test is not over. In the medium term, three dynamics are likely to shape the Gulf’s trajectory.

First, GCC governments will move closer to one another. The conflict has accelerated intra-Gulf security coordination at a pace not seen since the Arab Spring. Common defense responses are being discussed and planned, driven by a shared recognition that the current situation cannot be accepted as a permanent condition.

Second, the Gulf states’ relationship with the United States will be redefined, not severed. The GCC needs American security guarantees; Washington needs Gulf bases, overflight rights, and energy stability. But the terms of the relationship are shifting. Gulf governments will increasingly demand to be consulted, not merely informed after decisions are taken.

Third, Iran’s influence in the region, whatever survives this conflict, will be diminished among Gulf populations and governments who have now watched Iranian missiles target their infrastructure. The damage Tehran has inflicted may outlast the military campaign.

What remains deeply uncertain is when and how the shooting stops. Iran will not reopen the Strait under a unilateral American deadline. Washington, committed to a campaign whose objectives have shifted repeatedly, has not defined what success looks like.

The Gulf states, caught between both, are managing the consequences of a war they did not start and were not asked about.

By I. Constantin