Since Israel launched its attack on Iran in June 2025, the conflict has been analyzed largely through the lens of military escalation and fluctuations in global energy markets. Yet the war’s consequences extend far beyond oil prices. Heightened risks to shipping through the Gulf have exposed the vulnerability of global supply chains that depend on the uninterrupted movement of commodities, manufactured goods, and industrial inputs across the region. As governments, corporations, and financial markets assess the fallout, the Strait of Hormuz has emerged as the central strategic question around which a host of other issues now revolve: regional security, global trade, energy flows, infrastructure corridors, sanctions, reconstruction, and the future political order of the Middle East. Whether the Strait remains open, becomes contested, or is transformed through new logistical arrangements has become the focal point through which competing visions of the region are being negotiated.
To unpack these wider dynamics, we turn to political economist Adam Hanieh, whose work has long examined the Gulf's place in global capitalism, the political economy of regional integration, and the relationship between state power, energy, and empire. In this interview, Hanieh challenges narrow accounts of the war that reduce its significance to fluctuations in oil prices. Instead, he situates the conflict within a broader political economy of empire, tracing how the Gulf’s strategic importance lies not only in energy exports but also in its central role in global supply chains, financial markets, and emerging infrastructure corridors. The conversation examines the war’s implications for US power, Gulf-Israeli normalization, fossil-fuel dependence, and regional reconstruction, while highlighting how the consequences of conflict are disproportionately borne by vulnerable populations across the Middle East, Africa, and South Asia. Hanieh’s central intervention is that the war should be understood not as a discrete geopolitical event but as part of a wider struggle over the organization of trade, capital flows, infrastructure, and political authority in a rapidly changing global order.
Responses to these interview questions were submitted on June 1, 2026.
Arabian Peninsula Page Editors (AP Editors): In your recent writing, you emphasize the centrality of the Strait of Hormuz not only to global oil flows but to supply chains more broadly. In your view, what aspects of the current disruptions are being overlooked or under-analyzed? And looking ahead, what might an Iran-dominated regime over the Strait mean for the organization of regional and global trade?
Adam Hanieh (AH): So much of the media coverage around the economics of the US–Israeli war on Iran has focused on the movement of oil prices and their impact on consumers in the United States or Western Europe. What this misses is that the Strait of Hormuz is not just an oil chokepoint, but a major trade route for many other commodities, including basic chemicals, petrochemical feedstocks, fertilizers, and aluminium. In this sense, the war has demonstrated that we need to move away from an orientalist stereotype of the Gulf states as simply giant oil spigots and understand their centrality to wider global industrial supply chains.
This is especially important because the Gulf’s main commercial links now run increasingly eastward, rather than primarily toward the United States or Western Europe. The region connects East Asia, South Asia, and the African continent through the flow of basic commodities that sustain agricultural and industrial production. Because of these shifting geographies of trade, the economic implications of the war are potentially very serious and extend far beyond just an energy shock, especially in countries already facing war and conflict. We could take Sudan, for instance, which imported 54 percent of its fertilizers by sea from the Gulf in 2024, the highest share in the world. Sudan is also reeling from a three-year civil war—in which Saudi Arabia and the UAE are major protagonists—and that has displaced one-third of the Sudanese population. So we can see here how the US–Israeli war against Iran can act to magnify pre-existing crises.
Control over the movement of goods through the Strait would obviously give Iran a powerful lever over global shipping, energy flows, and regional security calculations. But I think this would come under enormous pressure from major Asian importers that depend on uninterrupted Gulf supplies, and I believe it is unlikely they would agree to such an arrangement. Over the longer term, this could accelerate efforts to diversify routes and suppliers.
AP Editors: Over the past few years, we have seen a range of efforts to develop alternatives to the Strait of Hormuz: overland corridors linking the UAE to Jordan and Israel, pipelines connecting eastern Saudi oil fields to Red Sea ports, and more improvised rerouting within the UAE and between the UAE and Oman. Do you see these initiatives evolving into durable, long-term infrastructure? To what extent can they meaningfully reduce the dependence of Gulf states—and global supply chains—on the Strait? And what analytical lens should we use when assessing the viability and strategic significance of these so-called “alternatives”?
AH: The Emirati overland pipeline to Fujairah, Saudi pipelines to the Red Sea, and improved road and port connections within the UAE might reduce pressure on some crude exports, but I do not think they can easily replace the density of intermodal infrastructure built up in the Gulf over many decades. Again, we need to remember that the Gulf states are not just exporters of oil—pipelines cannot transport fertilizers, chemicals, foodstuffs, and other commodities that are produced in the region. Such alternative infrastructures are also vulnerable to military attack and sabotage.
I think it is important to analyze these various infrastructure schemes through the lens of the wider region—especially the US and European attempts to promote normalization between the Gulf states and Israel. One example of this is the India Middle East Corridor (IMEC), which aims to build alternative energy and trade corridors linking India and Europe through the Gulf, Jordan, and Israel. This proposal predates the genocide in Gaza, and discussions have continued apace since October 2023. IMEC is explicitly framed by US and European powers as a counterweight to China’s Belt and Road Initiative in the Middle East. Similarly, the 3+1 gas initiative connecting Israel, Cyprus, and Greece has been promoted as a way to reduce European reliance on Russian gas while anchoring the eastern Mediterranean more firmly in a US-aligned energy architecture. In this sense, these developing infrastructure alternatives are attempts to reorganize the region’s trade and economic linkages around the United States and its key allies.
AP Editors: Alternatively, might this moment signal a broader historical shift toward more localized production and an accelerated transition to renewable energy?
AH: Unfortunately, I do not think that is likely. Faced with supply disruptions and price volatility, the dominant global response seems to be a doubling down on fossil fuels through new oil and gas deals, expanded LNG infrastructure, subsidies for domestic hydrocarbon production, and the weakening or postponement of environmental regulations.
The United States, in particular, is attempting to use fossil fuel dominance as a means to push back against its global weaknesses in other areas. We saw this in Venezuela and now in Cuba, as well as the war against Iran. The waging of war itself also reinforces the strategic centrality of fossil fuels because modern militaries are extraordinarily oil-intensive institutions. A state of permanent war thus locks the world even more tightly into hydrocarbon dependence. This current war has also illustrated how oil needs to be seen as much more than simply a source of liquid transport fuels. Petrochemical products such as plastics, fertilizers, and other synthetic materials derived from oil and gas are essential to sectors far beyond transport, including food and agriculture systems, and a wide array of manufacturing industries.
But I think the bigger issue here is the false belief that we are somehow in a “transition” to renewable energy. 2025 saw the largest consumption of oil, gas, and coal in human history. Because of capitalism’s innate push to endless expansion, energy throughput tends to grow incessantly. What we are witnessing is the addition of renewable energy on top of fossil fuels—just like the so-called “coal-to-oil” transition in the middle of the twentieth century did not mean a decline in coal consumption, but its expansion.
One clear illustration of this additive nature of energy systems can be seen in the Gulf states, where there are substantial investments in solar, wind, and other forms of low-carbon infrastructure. The Gulf states are also setting ambitious targets for the use of renewables in electricity generation. But this is happening alongside, not instead of, projected increases in oil and gas production. The core reason for this expansion of renewables is that the Gulf states want to free up more oil and gas for export, rather than burning it at home for electricity generation. As the Saudi energy minister Prince Abdulaziz bin Salman put it a few years ago, renewables offer a “triple win”: greater oil exports, cheaper domestic energy, and the prestige of meeting emissions targets. So rather than a move away from fossil fuels, we are seeing renewables layered onto an expanding hydrocarbon base.
AP Editors: While this war is often framed as a confrontation with Iran, it can also be read as one that profoundly implicates the Gulf states themselves. US political discourse—particularly under Trump—has frequently emphasized extracting economic and strategic concessions from Gulf economies in exchange for so-called security guarantees. How do you interpret US interests in the GCC in the context of this war? To what extent are Gulf states partners, clients, or even sites of extraction within this broader geopolitical and economic strategy.
AH: Since the mid-twentieth century, the Gulf has been a central anchor of US global power. This was first and most obviously because of the region’s enormous oil and gas resources, which helped drive the global shift to oil after the Second World War. But the Gulf’s significance has never been reducible to physical energy supplies alone. Equally important are the vast financial surpluses generated through oil and gas exports. Since the 1970s, these surpluses have largely flowed into dollar assets, Western banks, US Treasury markets, and consumption of US military hardware. Through these financial flows, the Gulf has played a key part in sustaining both the international role of the dollar and the wider architecture of US financial power.
What has changed over the last two decades is the emergence of new centres of capital accumulation outside the United States, above all China. China’s rise has coincided with a relative weakening of US dominance in key technologies, industries, supply chains and infrastructures. At the same time, the United States now faces a range of deep internal problems including political dysfunction, rising social violence, mass incarceration, homelessness, and decaying public infrastructure.
I think the US-GCC relationship needs to be understood within this wider global context. What the United States is attempting to do—and this is a project that predates Trump—is to reassert US primacy in the Middle East. A key part of that is deepening the US relationship with the Gulf monarchies and pushing forward the normalization project with Israel. This goes far beyond the old model of “security guarantees” (which I think was always a bit reductive). Today, the Gulf states are deeply embedded in the US political economy through equity markets, involvement in private equity and hedge funds, sovereign wealth investments, and other financial channels—alongside the continued consumption of US military hardware. They also share with the Trump administration the same commitment to a fossil fuel-centered world. This makes the Gulf an active component in the reproduction of American power, not just passive clients.
AP Editors: Do you see this war as a signal of a declining US empire, as some have argued? Do you anticipate the relationships between the GCC and US and Israel to shift in the war’s aftermath?
AH: I think we have certainly seen a relative decline of US global dominance over the last two decades, and the war is a further signal of this general trend. Yet I do not think this should be taken as a simple collapse of US power. The United States still possesses military dominance, and the centrality of the dollar gives it extraordinary power to weaponize access to global markets through sanctions and extraterritorial controls. But as I have noted above, this weakening has increased the importance of the Middle East to the United States, especially given the reliance of China on the region’s energy supplies and the importance of the Gulf as a key zone of global financial surpluses. This is the context in which the US has continued to push for normalization between Israel and the Gulf around a US-aligned bloc.
It certainly appears that the UAE has deepened its connections with Israel and the United States over the course of the war, and I expect this will continue in the aftermath. What remains unclear is whether Saudi Arabia will formally join the Abraham Accords. Unlike some commentators, I do not feel that Saudi Arabia has distanced itself from the United States throughout this war and I also do not think that the Saudi monarchy is at all opposed to normalization with Israel (it is simply inconceivable that Bahrain and the UAE could have joined the Abraham Accords without a green light from Saudi Arabia). But there are clearly tensions within the GCC itself, and these may well certainly deepen. A major factor in all of this will be the nature of any agreement that might be reached between the United States and Iran in the coming period.
Another important side to this is the question of reconstruction and post-war arrangements in Gaza, Lebanon, Syria, the Gulf, and elsewhere. Trump’s Board of Peace is an obvious vehicle for normalization, bringing together Saudi Arabia, the UAE, Israel, and others in a single institutional framework. To a great degree these reconstruction plans will be a continuation of the war by other means and will also overlap with the various infrastructure plans I mentioned above.
AP Editors: You have pointed to the global social consequences of this war that extend beyond oil prices and trade disruptions. How might these dynamics unfold within the GCC itself? In Bahrain, for instance, we are already seeing rising tensions—protests, arrests, and cases such as that of Sayed Mousawi—while elsewhere Gulf states appear increasingly attentive to their migrant populations, emphasizing themes of inclusion and unity in official messaging. How might this moment reshape internal social and political dynamics in the Gulf, and to what extent could it echo—or diverge from—the trajectories set in motion by the 2011 uprisings?
AH: The war has seen a sharp increase in repression in the GCC, including the detention and death in custody of Sayed Moustafa Mousawi in Bahrain, and the revocation of citizenship of thousands of people in Kuwait. Elsewhere in the Gulf, there have been arrests over social media posts, restrictions on filming or circulating information, warnings against “rumours,” and tighter surveillance of public expression. These measures fit a wider historical pattern in which regional conflict and tensions are used to justify repression and a narrowing of political space.
We also need to think about what a downturn in the Gulf might mean for the region’s migrant workforce. Migrant workers make up a very large share of the labor force across the Gulf monarchies, and millions of households in South Asia, the Middle East, and Africa depend on the remittances they send home. During previous crises, like 2008 and the COVID-19 pandemic, many of these workers lost their jobs and faced deportation. A drop in migrant remittances would impact people in labor-sending countries far beyond the Gulf.
As in 2011, economic grievances can quickly become linked to other political demands and also reveal the divisions within citizen populations. This is especially the case in Bahrain, where economic inequality is connected to sectarian patterns of rule. In Kuwait, the revocation of citizenship predates the war, but the conflict has provided a reason to accelerate (and justify) these measures. But the political landscape in the Gulf is not the same as in 2011, when protest movements were part of a wider regional uprising. The repressive capacities of the Gulf states are stronger than they were then, and I think the space for dissent is more circumscribed and policed. But one factor that is different today is how far normalization with Israel, and the wider Abraham Accords project, becomes a fault line within Gulf societies. Public sympathy for Palestine remains strong, and this sits in tension with the efforts of Gulf rulers to deepen ties with Israel.