Has the Iran War Changed the Gulf States Cost-Benefit Calculation in Allowing US Military Bases?

Investment Analysis Clubs Macro Economic Trends and Risks
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The Persian Gulf’s extraordinary wealth has long rested on an assumption of stability. The past six months of war have shattered that certainty, exposing a fundamental weakness in Gulf economic models: producing oil and gas is only half the equation when infrastructure and access to global markets can be disrupted.

Ports, airports, power grids, desalination plants, financial centers, and tourism hubs are all vulnerable to the same regional shocks. The energy sector is particularly exposed, with damaged oil and gas facilities potentially taking months or longer to repair. Yet restoring production may prove easier than restoring confidence that Gulf exports can reliably reach global markets.

Qatar, Kuwait and Bahrain are particularly exposed because of their reliance on Gulf maritime routes, including the Strait of Hormuz. Saudi Arabia has greater flexibility thanks to its East-West pipeline, as does the United Arab Emirates because of its oil export hub at Fujairah, which lies on the safe side of the Strait. Oman is also well-insulated, with its key export infrastructure beyond the Strait.

In search of resilience, these states are now building alternative export routes, expanding overseas production, strengthening strategic inventories, and dispersing critical infrastructure.

Ultimately, the past six months have left the GCC members facing different levels of risk. None can simply abandon hydrocarbons or the globalized economic strategies that have made the Gulf prosperous. Instead, the defining question of the post-war period will be whether they can make those strategies resilient enough to survive the next disruption.

More at link.

As Gulf states reconsider their security partnerships with the United States, they will be looking to find a way to protect their countries while maintaining and strengthening their relationships with the United States.

the war has also demonstrated the military capability of the Gulf Arab states. For instance, Saudi Arabia has deployed 108 Patriot launchers and four THAAD batteries, intercepting a large number of Iranian ballistic missiles. Emirati forces have intercepted roughly 92% of the ballistic missiles and 94% of the drones coming from Iran, and Qatar’s forces intercepted 96% of missiles and drones on the first day of the war using F-15s and National Advanced Surface-to-Air Missile Systems.

Unfortunately those missiles no longer exist. And the bases they came from are damaged.

Kuwait, UAE, & Doha are just on the other side of the Persian Gulf. What if Iran decide to attempt amphibious landings. These small states have small armies. And the are located on the wrong side of the Strait of Hormus for the US Navy to aid them. And possibly those states could be occupied before the US could respond.
And Iran could block transit of their oil for export.

Perhaps the Gulf States linkage to a weakened US is not a military benefit to the Gulf states? And questiones has arisen about the US abandoning those Gulf bases.

The war between the United States and Iran has cost Gulf Arab states dearly. The World Bank lowered its 2026 growth forecast for the Gulf from 4.4% to just 1.3%, and Iranian strikes have killed and injured civilians and soldiers in the Gulf, including seven civilians killed and 106 injured in Kuwait alone. Even successful interceptions have been costly: Gulf officials told the United States they were running low enough on interceptors that they had to start choosing which incoming threats to intercept and which to let through.

The war has been costly for the Gulf states.
They had NO say in the use of those bases in the war.
It is questionably that the USA could stop a serious attempt to occupy their nations.
It will likely be years before the US can resupply the used interceptor missiles.
And the Gulf states have no idea if the USA will initiate new meddling in the Middle East.

From a US perspective, the bases are vulnerable from Iranian attacks.
US submarines carry precise cruise missiles that have a range of 1600-2500 kilometers. I couldn’t nail the range. Submarines are difficult to target.

Bases in the Gulf states have no benefit for them. And little use for the USA.

Unless someone here can show me the error of my thinking; we should just write off the Gulf bases.
IMO The Gulf States would be crazy to keep US bases in their nations.

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…and given the emotional and almost certainly corrupt sources of the disastrous strategy, with little sign of rational or simple prudential considerations playing a part, I expect that for a long time to come no sane nation will wish to enter into the sorts of covenants the USA has almost taken for granted since WWII to guarantee free trade and peace on our terms.

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In my view this “war” will be more consequential in world affairs than Gulf War I, Gulf War II, or Afghanistan, not to mention Vietnam and even Korea.

We have shown Gulf States how vulnerable they are, and that we cannot help them but temporarily. We have shown the world that we are unreliable, and you can expect everyone from Japan to Poland to ramp up their military spending - and probably not by buying American armaments.

We have entered a new phase of warfare, where asymmetric threats in the way of drones and mines count fr more than B-2 bombers, and where a small band of terrorists like the Houthis can affect the world economy at least a little and get a lot of attention they otherwise would not.

We have enlarged Iran’s political hand while diminishing our own; we have angered allies and entertained former enemies. We have stoked inflation worldwide, and put economic sanctions on the front burner because military might hasn’t worked. We have installed a new, even more hostile and radical government in Iran, a country which has been a stalwart provider of mischief in an already unstable part of the world, and one on which the world relies for energy.

We have stretched supply lines, stretched US finances, and probably impacted a future generation economically, although exactly how remains to be seen. We have likely convinced many more countries than just those in the oil patch that having a US base might not be the umbrella shield they thought, and in fact it might be a negative in a time of increasing world stress.

To gloss over Iran I, we “stopped” Hussein for a while. Not much else, really. For Iran II we expended millions and got regime change, but mostly for naught as they have not become a reliable partner in the area, nor any help to our economy that I can tell. Afghanistan was a complete failure, of course. Vietnam likewise, and it dented the American story but only for a couple years; the failure here will be more long lasting because we have been so reckless and have ignored our supposed “allies” in favor of “go it alone”. Even Korea had little lasting effect, except to further divide the world into “us” and “them”, a schism which was already well underway.

Now to be fair, not all of this dire analysis hews strictly to this Iran debacle. Asymmetric warfare, particularly with drones, was already on the radar thanks to Ukraine/Russia - but the US being caught with our pants down really puts an exclamation point to it. We have always been vulnerable to bad foreign policy mistakes, from the Bay of Pigs to, well, lots of stuff. This, however, seems as though it will last longer than a single fiasco, and with China ascendant a lot of countries and peoples are starting to reevaluate, I bet.

No, i think this is a turning point. Not THE turning point necessarily, it takes a long time to turn around the kind of momentum America has had these last 50-100 years, but this is a big dent in the side or the ocean liner USS Protector, and the Pax Americana surely will not recover to the same state as before.

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Trillions…$
We expended millions in the first day.

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But remember, I’d hate for the US to be completely reliable to fight every war. With drones, more countries can go to war and fight to a draw. The quagmires we do not need.

The Chinese are deep in deflation. Oil prices will rise for them in the global market. The USD will rise as our interest rates rise. The US will fight inflation while raising costs in China. We are seeing action from the Treasury and the Fed. The two economies are being rewritten. The war in Iran is the small potatoes.

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A lot has changed since Bretton Woods and the end of WW II. Back then the Gulf States were mostly sand and camels. Churchill’s interest in the Gulf States was petrol, which he called a valid war aim in WW I.

GoogleAI:

You are entirely right—the global landscape has shifted dramatically since the mid-20th century. The transformation of the Gulf States from largely pastoral, desert economies into global financial and logistical hubs is one of the most rapid economic evolutions in human history.

Your historical memory regarding Winston Churchill is also spot on. As First Lord of the Admiralty before World War I, Churchill made the historic decision to convert the British Royal Navy from coal power to oil. This pivot permanently tied British strategic interests to the Middle East, leading to his famous declaration that fortune had brought oil to the British empire as a “prize from the ocean” and making access to oil a vital geopolitical priority.

The shift from the post-WWII Bretton Woods era to today highlights several massive changes:

  • From Imperial Resource to Sovereign Wealth: In Churchill’s era, Western powers extracted oil through colonial-style concessions. Today, the Gulf States control their own resources through massive Sovereign Wealth Funds (like Saudi Arabia’s PIF or the UAE’s ADIA) that buy up major stakes in Western corporations, sports teams, and real estate.
  • The Post-Oil Transition: While oil funded their initial rise, states like the UAE and Saudi Arabia are aggressively diversifying into tourism, aviation, technology, and renewable energy to prepare for a post-fossil-fuel world.
  • Shift in Global Power: The Bretton Woods system established the US dollar and Western financial institutions as supreme. While the “petrodollar” sustained this for decades, the modern Gulf is increasingly multi-aligned, doing massive business with China, India, and the global East.

It would be a good idea to convert the economy from Petrol to Sun Light and to end colonialism for good. After the Venezuela’s quarter century socialist debacle it is becoming a colony to restart oil production.

War itself is changing. Thousand dollar drones are destroying million dollar missiles. Robots are replacing soldiers. How much cheaper is an unmanned sub than a conventional one?

GoogleAI:

An unmanned military submarine is dramatically cheaper than a conventional crewed submarine, costing roughly 10% to 25% of a conventional crewed vessel to purchase, and less than 33% to operate. [1]

Why Unmanned Submarines Are So Much Cheaper

  1. No Life Support Systems: A massive portion of a conventional submarine’s cost and volume goes into keeping human beings alive. Unmanned submarines do not need oxygen generation, water distillation, galleys, sleeping quarters, HVAC systems, or heavy titanium shielding structured around human escape pods. [1, 2]
  2. Compact Hulls: Because they don’t house a crew, drone submarines are significantly smaller. For example, the U.S. Navy’s Boeing Orca XLUUV is roughly 85 feet long. A conventional manned sub usually spans 200 to 300 feet, requiring exponentially more raw material and advanced engineering to construct. [1]
  3. Negligible Operating & Personnel Costs: Traditional submarines require alternating crews of dozens of highly trained sailors who earn competitive military wages. Drone subs operate autonomously or are monitored via remote command centers thousands of miles away, slashing operational budgets to a fraction of traditional costs. [1, 2, 3, 4, 5]

Armies needed bases to station soldiers. New war equipment can be stationed underwater in any and all oceans.

The difficulty will be dismantling the old war industry. Ukraine can do it because they can’t afford the old. A big rethink is needed. Use the money saved to fund affordable, economically not politically affordable, healthcare.

The Captain

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