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How the Gulf states reconcile their enhanced dependence on the United States with the need to diversify their strategic options will determine opportunities for businesses. 

Once the guns fall silent in the current war, Gulf states will be left in a strategic quandary.

On one hand, U.S. President Donald Trump’s decision to launch a war of choice that Gulf monarchs spent a year lobbying against will be the clearest demonstration yet that, when push comes to shove, Washington, D.C.’s regional security calculus will always back Israel’s strategic goals, even if that is to the enormous detriment of Gulf economies and highly destabilizing to the broader region. On the other hand, the vast U.S. military footprint in the Arabian Peninsula — further augmented since the onset of the current war — and the deep military-to-military ties between the United States and Gulf states means that there is no immediate substitute for the American security umbrella.

Despite having brokered a historic détente between Saudi Arabia and Iran in 2023, China is a marginal diplomatic and military actor in the Middle East. China has not used its leverage as the largest buyer of Iranian crude to pressure Tehran to reopen Hormuz. Preoccupied with its geostrategic challenges in the Indo-Pacific, from India to the Taiwan Strait, China is not prepared to project power beyond its immediate neighborhood; in fact, Beijing will be content to see the United States bogged down in another Middle East war that diverts resources away from America’s own interests in the Indo-Pacific.

The TINA factor: There is No Alternative 

Thus, while the conflict will force a rethink of Gulf overreliance on the United States for its security needs, there is no viable alternative.

The United States has long been the dominant supplier of advanced weapons systems to Gulf militaries, in effect binding them in a “vendor lock” relationship with the U.S. defense industrial base. This relationship was reinforced in May 2025, when Trump — in the first overseas trip of his second term — travelled to the Gulf and secured bumper arms sale commitments from Saudi, the UAE, and Qatar.

The Saudi mega-package, valued at USD 142bn, is the largest defense sales agreement in history. Air and missile defenses featured prominently in the deal, in a nod to the emerging — and now very real — threat of Iranian drone and missile attacks on vital Saudi infrastructure. The current crisis has prompted Gulf governments to accelerate their purchases of American equipment, with the United States approving a USD 16.5bn emergency arms deal to ship drones, missiles, and radar systems to the UAE, Kuwait, and Jordan. While Gulf militaries have diversified their procurement channels — as demonstrated by the purchase of French Rafales and Eurofighter Typhoons — Washington, D.C. will remain the dominant partner given the interoperability challenge and the “stickiness” of existing security arrangements.

The Diversification Challenge

Furthermore, any attempt by America’s Gulf allies to deepen military and intelligence engagement with United States’ adversaries — chiefly China and Russia — will anger the Trump administration. Gulf countries, constrained by their size, do not enjoy the strategic flexibility that allows India, for example, to buy advanced weapons — such as the Russian S-400 missile system — from U.S. rivals.

At the same time, as middle powers — with enormous financial resources and diplomatic agility — Gulf countries have sought to retain strategic optionality in their relations with East and West. The need for optionality is driven by bold economic diversification programs, such as Saudi’s Vision 2030, that require an openness to both China and the United States, especially in the technologies of the future, including AI, electric vehicles (EVs), clean energy, and autonomous systems.

Thus, Qatar, the UAE, and Saudi have avoided vocal condemnation of Russia’s invasion of Ukraine and — in addition to hosting Vladimir Putin in their capitals — have expanded economic and investment ties with Russia during the war. The UAE is a member of the BRICS group of countries, chaired by India this year, and has signed Comprehensive Economic Partnership Agreements (CEPAs) with leading Asian economies, including India, Japan, and South Korea.

However, Gulf states have found that there are limits to this balancing act, most notably on efforts to reduce reliance on the dollar (through BRICS) and cooperation with China on dual-use technology, with AI chips proving a particular sticking point. Gulf states recognize those domains as United States’ red lines and will be careful to avoid crossing them for fear of antagonizing a Trump administration that is prone to lashing out at the closest of U.S. allies.

The next phase of foreign policy in the Gulf will, therefore, be marked by this tension and balancing act. Washington, D.C.’s actions have harmed the region and undermined the security of these states. Yet, this vulnerability has only enhanced Gulf’s dependence on the United States in the short-term. But, in the medium-term, Gulf states will inevitably look towards expanding their strategic options. How they do this without antagonizing the United States will test their diplomatic mettle. And in this balancing act will lie opportunities and risks for businesses as they deal with a new Gulf.

Ahmed Helal is the Managing Director for the Gulf region at The Asia Group. This is the first in a series of three Front Row pieces on the current moment in the Middle East.