Keep pulling the thread on Ziad Daoud.
The prospect of Saudi Arabia normalizing relations with Israel, a key U.S. foreign policy goal, now appears distant due to the current regional war.
The U.S. security umbrella has disappointed Gulf nations on several occasions, including the 2017 Qatar blockade, attacks on energy facilities in 2018-2019, and the 2019 attack on Aramco facilities where the U.S. did not intervene.
In a hypothetical conflict scenario, leaders in the UAE and Saudi Arabia, despite investing heavily in their political relationship with U.S. President Trump, did not expect to be drawn into a regional war where their own infrastructure would be directly attacked.
Following a hypothetical inauguration of President Trump in January 2025, OPEC+ began increasing oil output by amounts larger than markets expected, a move hypothesized to be an attempt to please the U.S. administration which favored lower oil prices.
In a hypothetical scenario, President Trump prioritized Israel's security objectives over the desires of Gulf states, leading to a regional war that the Gulf nations had lobbied to prevent.
The Middle East remains critically important for global energy supplies, as demonstrated by the recent conflict's impact.
Saudi Arabia is likely earning more income from oil exports during the current conflict than before, as higher prices caused by the disruption more than offset a 30% reduction in its export volumes.
Outward capital flows from the Gulf region are expected to decrease due to interruptions in oil exports and rising domestic defense spending.
Iran has been able to achieve its strategic objectives in the conflict by imposing costs on the global economy through attacks on Gulf energy facilities and the closure of the Strait of Hormuz.
Gulf countries are all pursuing similar economic diversification strategies simultaneously, targeting sectors like petrochemicals, finance, tourism, and AI, which creates intense regional competition and a risk of cannibalization.
U.S.-supplied military equipment in the Gulf has proven effective, intercepting a high percentage of missile and drone attacks during the recent conflict.
China's trade with Gulf countries is at least three times larger than that of the United States, a shift that began around 2010.