Lessons from US-Iran war - shifts and changes

For the past two weeks, we have been mapping out the implications, conclusions and lessons from the US-Israeli war on Iran. Having discussed the effects on warfare, and the quest for alternative energy, this piece would deliberate on random changes that affect the belligerents and the region, including the greater Middle East.

First, the Iranian military response (that continues) in targeting Gulf nations housing the US bases (Saudi Arabia, Qatar, the UAE, Bahrain, etc), which at times also hit the civilian infrastructure and energy facilities, will have far reaching implications. This strategy, ostensibly orchestrated by the IRGC/Pasdaran, has: a) undermined the effectiveness of security umbrella provided by the US, forcing these nations to look for alternative net-security provider (China, Russia, Pakistan and India); b) deepened cooperation with Israel (UAE), which even deployed patriot AD systems for infrastructure protection, thwarting Iranian drone and missile combos; c) forced a rethink among these nations on energy production, transportation means and storage alternatives, outside the potential conflict zones, as and when the Strait of Hormuz (SoH) is closed; and d) deepened the historic Arab-Faras (Persian) divide among Muslims that will accentuate the Shia-Sunni competition in countries like Iraq, Bahrain and Pakistan.

Second, another important byproduct of this war, whichever way it settles, is the busting of 'Dubai' dream. The desert oasis was a safe haven for friction-free trade, investment, tourism, culture, religious tolerance and entertainment for decades, attracting global elite, creating immense wealth and unprecedented prosperity for its citizens and expats alike. 'Dubai Chalo' was etched in the collective psyche of Pakistani generations for example. The megapolis provided alternative and safe investment in trade and property to Pakistani elite outside their national boundaries and reach. The city state was, and remains for now, a refuge for tax evaders, political outcasts and out of favour politicians. The fragility of its existence was badly exposed under incessant Iranian missile-drone barrages. The investment climate will take months, if not years, to return to the old normal, if ever. Perhaps the old UAE is 'gone with the wind', most sadly, regrettably and unfortunately. On the optimistic side, the elite 'might' revert some of their wealth back to their countries. Loss of remittances by the expat labour force will keep affecting marginal economies like Pakistan.

Third, the war 'may' be over if the sticking issue of uranium enrichment is resolved during the Pakistan-mediated peace parleys between the US and Iran, but the larger competition between Iran and the Saudi-Gulf combine will enhance. Iran's careless expansion of the battlefield into these countries has evoked not very public military responses also, as reported by The New York Times on May 14, 2026, in an article by Eric Schmitt and Vivian Nereim, tiled "Saudi Arabia and U.A.E. Carried Out Secret Attacks in Iran, U.S. Officials Say". The war also elicited willing, or unwilling cooperation from counties like Iraq, which tolerated or did not know the presence of two Israeli outposts in Najaf Desert in southwestern Iraq, as documented by Erika Solomon and Falih Hassan in the same newspaper on May 17. The UAE's willing collaboration with Israel, as cited, is well reported in the open press. This shows Tel Aviv's audacity and diplomacy.

Fourth, the war has tremendously damaged the liquified natural gas powerhouse, Qatar, producing over 20% of Global LNG. This tiny nation with an oversized role in conflict resolution, took over three decades building supply infrastructure for its LNG and gas-related exports, through SoH to ports across Asia and Europe. Petroleum exports earned Qatar over 60 percent of its revenue. That wealth has transformed Doha, the once parched landscape, turned into a gleaming metropolis with monolithic corporate skyscrapers, and an irrigation systems watering perennial blanket of grass and fuchsia flowers. Qatar, the wealthiest in the world per capita, with $600 billion in sovereign wealth fund, has stakes in diversified portfolios like Heathrow Airport (London), Empire State Building (New York), Rolls Royce and Paris's Saint -Germain Football Club (PSG), to name a few. It sported the world's most expensive Football World Cup in 2022.

Today, Ras Laffan, Qatar's industrial centre for gas production, is shuttered in the wake of sustained Iranian attacks; the vast Hamad port south of Doha is almost deserted, and Doha's main Hamad International Airport, a close regional rival to Dubai, is in noticeable silence like the city's many hotels and boutiques. Qatar, unlike the UAE, bears the brunt as its economy is less diversified and more energy-export dependent.

Restarting energy production is generally an uphill, complex and expensive process. Even then exports cannot be guaranteed, until shipping lines offer and Qatar secures firm commitments from them to return for new loads, and that is extremely difficult, if not impossible, given the risks in SoH. More importantly, the long-held belief in the energy markets of LNG being an 'intermediate alternative' to greener energy is shattered. Moreover, Qatar imports around 90 per cent of its food, and SoH blockade disrupts its supply chains, hiking prices in case of air transportation alternatives.

Fifth, the war may force a rethink on Gulf-Saudi Combine to create storage for their crude and gas outside the conflict zone, like in Gwadar (Pakistan), for example. LNG transportation alternatives especially for Qatar could be pipeline(s) across Arabian Peninsula to liquefaction, storage and export terminal in Jeddah on Red Sea. Or southward to Oman's Duqm port on the Arabian Sea. As an inescapable lesson, more countries will build greater storages, like China. Vietnam and New Zealand are already planning LNG import terminals to shield against extreme price volatility.

Finally, key strategic and geopolitical takeaways from the conflict include the transient, reversible and temporary nature of the US 'combat successes', given Iran's tenacity and residual military capability. The conflict has also solidified the informal emergence of an 'Adversary Axis' of American competitors like China and Russia. These countries continue to provide intelligence, advisory and logistic support to Tehran. Additionally, diplomacy remains disincentivised, because of the US proclivity for military force rather than negotiations. Washington's friends and foes (Saudi Arabia, North Korea, Iran, etc) are gravitating towards the view that nuclear capability remains the ultimate insurance against foreign-led regime change and other interventions. It speeds up quest for nukes.

After 'perceptual' win, Tehran should take the deal!

Concluded…