For nearly half a century, much of the Arab regional strategy rested on a simple assumption: a constrained Iran was in their interests.
Before 1979, Iran under the Shah was the dominant economic and military power of the Persian Gulf. It possessed the region’s most advanced industrial base, the strongest military, and a level of prosperity that many neighboring states could not match. Iranian students studying abroad often projected a confidence born of belonging to a country that appeared destined to become one of the world’s major powers. Their Arab classmates in private schools in Europe and the US envied their Iranian classmates and quietly planned their demise.
The revolution changed everything.
Arab states found themselves benefiting from Iran’s isolation. And, the Iran-Iraq War further exhausted both Tehran and Baghdad while allowing the smaller Gulf monarchies to accumulate enormous wealth. Subsequent decades of sanctions further redirected trade, finance, aviation, shipping, tourism, and investment away from Iran and toward cities such as Dubai, Doha, and Abu Dhabi.
As Iran’s aviation sector struggled under sanctions, Gulf carriers became global giants. As Iranian ports and financial institutions faced restrictions, Gulf logistics and banking centers flourished. Capital, talent, and commerce that might otherwise have flowed through Tehran, Bandar Abbas, or other Iranian hubs instead flowed through the Gulf monarchies.
There is a very powerful argument that these Arab states very quietly supported the regime in Iran, while ensuring that Iran remained contained and sanctioned. They played on both sides. The continuation of the regime in Iran was in their interests – if it remained a pariah. Arab states spent lavishly in Western capitals to support anti-Iranian propaganda. Arab states spent lavishly to amplify Iran’s ‘nuclear’ threat while quietly building their own nuclear plants (which they simultaneously denied to Iran and pretended were a tacit bomb program). Arab states quietly aligned with Israel to propagate this narrative.
For decades, this arrangement appeared remarkably successful. Although the fundamentals would support Iran’s advancement, Arabs prospered (largely at Iran’s expense). Iran has a high-altitude airport located 1,000 km closer to Europe and East Asia. Iran is ‘the’ natural aviation hub in the region. Yet, Dubai and Doha prospered. Iran has a domestic population nearing 100 million, with a large industrial appetite. Also, Iran is a natural regional hub for shipping and transportation, supporting landlocked ‘stans’. Yet, a sanctioned and contained Iran needed Dubai’s port to ‘sanction-bust’ to support its economy. This industrial base would support financial markets, yet Dubai is ‘the’ major regional financial market and banking hub. Not to be forgotten has been how these Arab states financed Saddam Hussein’s invasion of Iran. To add insult to injury, Arab states started naming the Persian Gulf the Arab Gulf – and financed the republishing of maps. Iranians suffered; these Arab states prospered. Iranians were so impoverished that young Iranian women started populating these Arab states as prostitutes to help their families at home.
But Arab prosperity has been a two-edged sword. Arab prosperity changed their strategic realities.
The gleaming skylines of these Arab states are not self-sustaining. They depend upon uninterrupted trade flows, energy exports, imported labor, imported food, imported technology, and above all secure maritime access through the Strait of Hormuz.
That is where an irony emerges.
The more successful these Arab states became, the more dependent they became on the very waterway over which Iran possesses immense influence. Every new port, refinery, industrial zone, financial center, and airline hub increased the strategic importance of keeping the Strait of Hormuz open and stable.
A generation of policymakers treated Iran primarily as a threat to be contained. Yet containment never eliminated Iran’s core geographical reality. It never eliminated Iran’s population. It never eliminated Iran’s industrial capabilities, scientific base, missile programs, or strategic position overlooking one of the world’s most important chokepoints.
Recent conflicts have exposed this reality with uncomfortable clarity. Markets reacted immediately to even the possibility of disruption. Insurance rates surged. Shipping routes were reconsidered. Investors suddenly rediscovered something that geography had always made obvious: no lasting Gulf security architecture can exist without accounting for Iran.
This leaves these Arab states facing a difficult dilemma.
The policies that may have helped produce decades of relative advantage also helped preserve the very confrontation that now threatens their prosperity. Every effort to keep Iran weak increased the strategic importance of the one card Iran can never lose—its location.
The result is a paradox. The wealthier and more globally connected these Arab states became, the more vulnerable they became to instability in the Persian Gulf itself. Did they really think they could impoverish Iran forever on false pretexts? Did they really think Iranians would not understand the reality they promoted?
In that sense, the region may have arrived at a moment of strategic reckoning. The old model of sanctions, isolation, and permanent confrontation produced winners for many years. But it also produced a regional order in which everyone’s prosperity ultimately depends on stability with Iran.
And that may be the greatest irony of all: after decades spent trying to reduce Iran’s influence, the success of these Arab states has made Iran more important than ever.
Leave a Reply