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Abstract The international system is currently undergoing a process of reconfiguration that is having an impact on all areas of global development. In this process of reordering power relations, there is a tendency to move towards multipolarity, leaving behind the unipolar coalition established after the Second World War. In this context, several emerging powers are gaining increasing international power, which has led to changes in the hierarchy of power on the international geopolitical chessboard. Such is the case of the People's Republic of China, which has established itself not only as a power of great impact and relevance in the Asian region, but also in the entire international system. Namely, the management of the government and the Party in terms of innovation, industrialization, informatization, productivity, expansion and internationalization of its economic model, positions this country as the most dynamic center of the international economy. Evidencing that alternative models to the capitalist system are possible and viable, which strengthens the trend towards a systemic transition and multipolarity in the International System Introduction In the last two decades, a set of geopolitical and geoeconomic tensions and conflicts have become evident, with significant implications extending throughout the International System. As a result, we are currently experiencing a convulsion of the established order, giving way to a process of new global reconfigurations. In this context, several researchers and academics such as Jorge Casals, Leyde Rodríguez, Juan Sebastián Schulz, among others, have noted that these conditions have led to a crisis and hegemonic transition process, with a trend toward multipolarity in which the Asia-Pacific region is gaining increasing relevance. This article, titled "The International Reconfiguration’s Process Towards Multipolarity: The Role of China as an Emerging Power," is dedicated to analyzing the position of this country within the current international reconfiguration of power. Accordingly, the first section will systematize some essential guidelines to understand the current crisis and the decline of the hegemonic order established in the post-World War II period. The second section will address China's positioning amid the international reconfiguration of power. In this regard, it is important to note that China's rapid rise highlights how development management aligned with the Sustainable Development Goals can lead to a shift in the paradigm of international relations, as well as power reconfigurations that challenge the current balance of forces. Thus, it can be affirmed that China's rise constitutes a decisive element within the current trend toward multipolarity. DevelopmentNew International Order: Approaches to the Multipolar Reconfiguration of the International System The current international context is marked by a process of crisis. This crisis reflects the fact that the world order no longer aligns with the correlation of forces that gave rise to it during the post-World War II period. It is not a circumstantial crisis, but rather the interlinking of various interconnected crises that span across all sectors of life. That is to say, the effects of one crisis often become the causes of another, involving economic, political, social, cultural, ethical, moral, technological, commercial, and environmental components. In other words, it is a structural and systemic crisis—one that cannot be resolved unless a similarly systemic transformation occurs. To gain greater clarity, it is important to consider that the consolidation of the capitalist system brought about the process of globalization. This, in turn, introduced large-scale production and technological development capable of increasing output. This process, along with other characteristics of the system, has exponentially accelerated social inequalities between developed and developing countries. It has also led to strategic tensions over the control of resources, raw materials, and inputs, resulting in geopolitical conflicts. Furthermore, the capitalist system has imposed an extremely high environmental cost, demonstrating that it is exceeding both its own limits and those of the planet. Specifically, in its constant pursuit of profit and maximization of gains, negative environmental impacts are not factored into cost-benefit analyses, leading to widespread environmental degradation. Among other harms caused by the system, we observe a decline in investment rates, an increase in public debt, loss of autonomy in monetary policy, rising unemployment levels, reductions in real wages, and growing inequality, among others. In short, capitalism has become an unsustainable system whose primary concern is profit generation—something that is currently entirely incompatible with environmental preservation and the responsible use of natural resources. Therefore, it can be affirmed that some of its most alarming effects include: vast amounts of currency without backing, increasingly concentrated in fewer hands; acceleration of capital concentration in the West; rising military expenditures; and environmental pollution and destruction (Casals, J., 2023). On the other hand, it is necessary to clarify that, for a particular state to be considered hegemonic, it must not only exert its influence predominantly within the system of international relations; its hegemonic role must also be linked to the founding and establishment of a universally accepted concept of world order. That is, the majority of other states must recognize it as such and identify with the model promoted by the hegemon. Therefore, it is not merely a matter of a hierarchical order among states, but rather the adoption of a dominant model of production that involves those states. As a result, certain mechanisms or general rules of conduct are established for the participating states. For this reason, a hegemonic crisis involving the dominant actor in the system of international relations leads to a crisis in the social, economic, political, and institutional structures upon which that actor’s dominance was built. In light of these elements, we currently observe a set of powers within the International System that are vying to establish a new distribution of power—one that moves away from the unipolar coalition led by the United States following World War II. From this perspective, Juan Sebastián Schulz asserts: “A hegemonic crisis occurs when the existing hegemonic state lacks either the means or the will to continue steering the interstate system in a direction broadly perceived as favorable—not only for its own power, but also for the collective power of the dominant groups within the system.” (Schulz, J. S., 2022) As a result, strategic alliances have been formed and new power groups have emerged that influence international relations.These blocs are precisely what the new polarity is forming around, increasingly reinforcing the trend toward multipolarity. This is a system in which hegemonic influence is not determined by a single power, but by two, three, or more. In this regard, Juan Sebastián Schulz further notes that a process of insubordination is becoming evident, particularly in the Western peripheries. As a consequence, several countries have begun to criticize the configuration of the contemporary world order, initiating efforts to organize and propose alternative models (Schulz, J. S., 2022). This reveals the emergence of a new kind of power hierarchy, generating a global order in which a diversity of forces and actors prevails. In this context, China has experienced rapid growth, thereby contributing to the trend toward multipolarity. While this does not imply that the United States will cease to be one of the central powers in the system of international relations—given its considerable global influence—it is evident that there is a noticeable decline in the dominance it held during the unipolar era that emerged after the collapse of the USSR in 1991. This process of intersystemic transition unfolds in various phases. First, there is an observable economic transition marked by a shift in the center of gravity of the global economy toward emerging and developing economies. This shift is accompanied by a necessary technological transition, characterized by a new struggle—this time to lead the technological revolution. These changes, in turn, must be supported by a political transition. Currently, countries from the Global South have gained increasing prominence on the international stage [1]. From this foundation, a geopolitical transition is also underway, where the center of gravity and decision-making—once concentrated in the Anglo-Saxon West—is shifting toward the Asia-Pacific region. Finally, a cultural or civilizational transition is taking place, wherein the previously dominant value system is giving way to the rise of a new worldview. Based on this, the phases of the transition process can be outlined as follows: Existence of a stable order that brings together the majority of nation-states in the International System. - A crisis of legitimacy begins to affect the established global order. - A deconcentration and delegitimization of power emerges, impacting the hegemonic power. - An arms race and formation of alliances ensue in an attempt to preserve the hierarchical order by any means. This leads to a widespread crisis and the rise and emergence of new actors. - A necessary resolution of the international crisis. - Renewal of the system. (Schulz, J. S., 2022) In light of the above, it can be stated that a “new international order” is taking shape. Its manifestations are multifaceted, such as: - The rise of movements and associations of states that serve as alternatives to the neoliberal order. - Emerging powers like China and Russia are gaining strength in various sectors of the international geopolitical arena. - Russia's confrontation with NATO in the context of the conflict with Ukraine. - Sanctions imposed by the United States on various NATO and European Union countries have strengthened the BRICS nations. - The incorporation of new members into BRICS can be seen as an attempt to counterbalance the economic and political dominance of the United States and the European Union. - The expansion of anti-imperialist and anti-neoliberal integration mechanisms that promote South-South cooperation, such as the G-77 + China group. - The financial sanctions imposed by the West on Russia in the context of the Ukraine conflict have sparked a debate about the viability of the international monetary system and the role of the U.S. dollar as a reserve currency. - China and Russia conduct transactions in yuan and sell oil in this currency to Iran, Venezuela, and Gulf countries. China has increased its economic and political influence in the world, which can be seen as a challenge to U.S. hegemony. Its leadership within BRICS and its growing role in the global economy may be indicators of a shift in the balance of power. All these developments reflect a growing awareness within the International System of States regarding the importance of international cooperation to address global challenges such as the climate crisis, pandemics, and food security. They also serve as indicators that a transformation is underway in the way countries interact with each other, resulting in a shift in the economic, political, and strategic center of gravity. In this context, the United States has unleashed a global hybrid war as a desperate attempt to defend and maintain its hegemonic position, which once appeared unshakable in the postwar world. To this end, it has targeted China, as the latter represents its main threat in the economic and scientific-technological order. From this perspective, tensions between the United States and China have significantly deteriorated since the Republican administration of President Donald Trump. Beginning in 2017, his policy took on an aggressive stance toward China, manifesting through a trade war and economic attacks aimed at preserving U.S. global hegemony. This demonstrates that, in response to a process of decline already underway, nationalist and protectionist efforts intensified in the U.S., with policies targeting some of the emerging pillars of the crisis-ridden world order—China being a primary example. Under the administration of Joseph Biden, the focus shifted toward competition, emphasizing the commitment to protect U.S. sovereignty from potential Chinese threats. A significant shift in U.S. foreign policy toward Taiwan became evident with the approval of arms sales to Taiwan in August 2023, which escalated tensions in the region (Collective of Authors). Furthermore, in recent years, the United States has increasingly worked to generate geopolitical and geoeconomic motivations aimed at fostering tensions between China and Russia, potentially sparking conflict between the two. It has strengthened alliances with neighboring countries of these powers—most notably Taiwan and Ukraine—which has triggered concerns and tensions in both nations. A containment policy has also been deployed, including the imposition of trade barriers and tariffs on Chinese products; restricting Chinese companies’ access to U.S. technology and markets; and promoting the diversification of supply chains to reduce dependence on China. Nevertheless, the ongoing sanctions and restrictions have only served to reaffirm the shared survival interests of both powers, strengthening corporate ties and relations between them. These actions also reflect the growing concern among U.S. power groups over the decline of their hegemonic dominance. The Emergence of China and Its Role in the Transition Toward Multipolarity In a previous article titled "The Synergy Between Economy and Environment in China Through the Achievement of the Sustainable Development Goals," (‘La sinergia entre economía y medio ambiente en China mediante la consecución de los Objetivos de Desarrollo Sostenible’) the process of socioeconomic transformations experienced in the People's Republic of China over the past decade was discussed. These transformations have been primarily aimed at revitalizing the nation in preparation for its centenary in 2049. This strategy is rooted in aligning the Centenary Goals with the Sustainable Development Goals (SDGs) set for 2030, under the leadership of the Communist Party and the momentum driven by President Xi Jinping. The results of this strategy have had an impact not only on the Asian Giant itself—now a decisive actor in the Asian region—but also on the international order as a whole. As a result, China has emerged as a powerful rising power, with promising prospects for further elevating its development standards. This is backed by sustained GDP growth, averaging between 6% and 8% annually, indicating a robust economy. In addition, China holds vast foreign exchange reserves, granting it economic stability and the capacity to withstand potential external shocks. It also invests heavily in modern infrastructure and cutting-edge sectors such as artificial intelligence, 5G technology, and renewable energy—all of which enhance its competitiveness and lay the groundwork for long-term sustainable growth (Lagarde, CH). Nonetheless, China has also had to confront significant challenges in its gradual and progressive approach to the desired development model. Among these is the environmental cost associated with its rapid economic growth. For instance, China still experiences high levels of greenhouse gas (GHG) emissions, along with air, water, and soil pollution. In response, measures have been implemented such as the establishment of a national monitoring network and the replacement of coal heating systems in Beijing. Efforts have also been made to purify water resources polluted by industrial processes, and imports of solid waste have been reduced to help decontaminate soils affected by industrial and agricultural activities (González, R., 2023). In general, the development of renewable energy and a circular economy model is being promoted to enable a gradual transition toward a green economy, grounded in the concept of an ecological civilization. For this reason, China’s new era is committed to scientific and technological innovation as a means of driving economic growth that is both sustainable and capable of ensuring a higher quality of life for its population. This, in turn, leads gradually toward a new model of political leadership and economic management. In this regard, Jin Keyu, Professor of Economics at the London School of Economics and Political Science (LSE), has stated that “trillions of dollars of investment are needed for the global green transition, and China is going to play an essential role in that transformation” (Feingold, S., 2024). Based on the aforementioned elements, various authors such as Dr. C. Charles Pennaforte, Dr. C. Juan Sebastián Schulz, Dr. C. Eduardo Regalado Florido, among others, have indicated that the millenary nation represents a threat to the hegemony held by the United States since World War II. Consequently, it is recognized that a process of hegemonic crisis and transition is currently underway, with the Asia-Pacific region emerging as the center of gravity of the global power, thereby contributing to the multipolar transformation of the International System. The authors of “Is China Changing the World?” argue that “market socialism with “Chinese characteristics” must gradually and more clearly diverge from capitalism if it is to embody a genuinely alternative path for all of humanity.” In pursuit of this goal, China bases its policy of peaceful coexistence on five fundamental principles:Respect for sovereignty and territorial integrity, regardless of a country's size, power, or wealth. Mutual non-aggression Non-interference in the internal affairs of other countries, acknowledging that each nation has the right to freely choose its own social system and path of development. Equality and mutual benefit Peaceful coexistence. (Herrera, R.; Long, Z.; and Andréani, T., 2023) The rise of China as a major international power under these principles has been consolidating since 2012 under the leadership of Xi Jinping and the Communist Party of China (CPC), gaining particular momentum from 2020 to the present. Thus, China has not only become the leading power within the Asian regional balance but has also expanded its presence across Europe, Africa, and Latin America—primarily through loans, investments, and multilateral cooperation initiatives such as the Forum on China-Africa Cooperation (FOCAC) in Africa and the China-CELAC Forum in Latin America. In addition, China has positioned itself as a leader in several sectors, and it is projected that its economy may surpass that of the United States, increasing its Gross Domestic Product (Rodríguez, L., 2022). It has also undergone a process of opening up, energizing both its international trade and its overall foreign relations, all under the control of the Government and the Party. This, combined with its rise and development initiatives, has made China a focal point of interest for many countries within the International System seeking to jointly advance projects based on cooperation, the principle of shared advantage, and multilateralism. In this regard, the white paper "China and the World in the New Era," published by the Central Committee of the Communist Party of China in 2019, states: “The world is moving rapidly toward multipolarity, diverse models of modern development, and collaboration in global governance. It is now impossible for a single country or bloc of countries to dominate world affairs. Stability, peace, and development have become the common aspirations of the international community.” (People’s Republic of China, 2019. Quoted in Schulz, J. S., 2022) Undoubtedly, this rise has become a source of concern for U.S. power groups, which have increasingly applied geostrategic pressure. Notably, the United States has strengthened military alliances with India, Japan, and Australia in an effort to encircle China and attempt to control or obstruct its maritime routes—this also being a manifestation of the intensification of the imperialist arms race. Nonetheless, China has maintained its development strategy and, as part of it, has strengthened its diplomatic network and its relations with multiple countries across all world regions. For all these reasons, China has become the most dynamic center of the global economy. Notably, it went from representing 4% of global GDP in 1960 to 16% in 2020—undeniable evidence of rapid economic growth. Moreover, it has become the world’s largest exporter of goods and also the leading importer, establishing itself as a major industrial power. In this regard, United Nations data reveal that China leads global industrial production, accounting for 30% of the total. This figure surpasses other industrial powers such as the United States (16%), Japan (7%), Germany (5.7%), and South Korea (3.2%) (Schulz, J. S., 2022). In addition, China has remained the world’s leading manufacturing power for approximately 15 consecutive years, according to statements from the Ministry of Industry and Information Technology at the beginning of this year. This sector alone has contributed over 40% to overall growth. Likewise, in 2024, China experienced a significant increase in foreign investment, reflecting its interest in strengthening international cooperation for development. Efforts are also underway for urban renewal in 2024, with around 60,000 projects being implemented across various cities. These initiatives are primarily aimed at transforming underdeveloped neighborhoods and creating smarter urban areas (Embassy of the Republic of Cuba in the People's Republic of China, 2025). In this regard, the following graphs illustrate the value of China’s international trade during the 2016–2024 period, highlighting a strong presence of exports compared to imports. A second chart shows China's global export share, where it holds a dominant position.   Thus, China has risen as a center of power in the international system, with leadership not only in the economic domain but also in science and technology. At the same time, it has promoted a series of investments and a process of internationalizing its national currency. Accordingly, the Asian Giant offers an alternative model of development—one that is more comprehensive and sustainable—allowing it to propel the new phase of Chinese development. This phase aims not only to fulfill the dream of national rejuvenation but also to ensure the survival of its unique political, economic, and social model. Nevertheless, the significant challenges of sustaining growth cannot be overlooked. From this perspective, experts believe that new avenues of growth will be necessary for China to maintain the trajectory it has been experiencing. Specifically, the country must continue expanding its industrial sector while strengthening areas such as artificial intelligence, digital financial services, and green technologies (Feingold, S., 2024). It is also important to highlight the projected continuity and leadership of the Chinese government, with Xi Jinping identified as a key figure in the implementation of the Sustainable Development Goals (SDGs) in China, in conjunction with the socioeconomic transformation strategy toward the 2049 centenary. This has been pursued through the defense of multilateralism, economic openness, and international integration and cooperation in support of global development. Conclusions In light of the above, a decline in U.S. hegemony can be observed, even though this process is not linear—nor is it certain whether any single power or coalition has come to occupy a hegemonic position. What is clear, however, is the existence of a trend toward multipolarity, driven by emerging powers and the strategic ties they are establishing. This is giving rise to a non-hegemonic reconfiguration of power blocs, which are building a multilateral and multipolar institutional framework. It can also be affirmed that China has become the most dynamic center of the global economy. This has been supported by its growth strategy focused on industrialization, digitalization, innovation, productivity, expansion, and internationalization of its development model—while maintaining a strong emphasis on environmental sustainability. A range of key initiatives and development projects have been implemented to support the country's rise, consolidating its role in the multipolar reconfiguration of the International System. All of this has been essential in driving China’s new phase of development and contributing to the broader process of multipolar transformation. Undoubtedly, China’s rapid ascent represents a significant challenge to the International System, as it reflects a shift in international relations and a transformation in the distribution and hierarchy of global power. Notes [1] It is important to clarify that the so-called Global South should not be equated with the Third World, as the distinction between the First and Third Worlds is primarily based on economic and technological differences, which do not align with the current circumstances of the International System of States. In contrast, the term Global South emerges from a new geopolitical perspective that arose in the post–Cold War context, driven by the need to promote South-South cooperation. 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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском I. Introduction On 13 June 2025, Israel attacked more than a dozen locations across Iran in the largest assault on the country since the Iran-Iraq war of the 1980s. Beginning on the evening of 13 June, Iran retaliated by launching ballistic missiles and drones at Israel. Conflicts between the two countries have intensified. Amid intensified conflicts between Israel and Iran, the US attacked Iran by bombing three Iranian nuclear sites on 22 June 2025. In retaliation for these attacks from the US and Israel, Iran may consider closing or blocking the Strait of Hormuz. In fact, Iran’s parliament has reportedly approved of the closing of the Strait of Hormuz on 22 June 2025. However, on 24 June 2025, President Trump announced a ceasefire between Iran and Israel, thereby reducing the possibility of the blockage of the Strait of Hormuz by Iran. Nonetheless, there is still a possibility that conflicts between Iran and Israel continue and then Iran may reconsider the closing of the Strait. This is because the ceasefire is so fragile that the conflicts between Israel and Iran can take place at any time. If the closing of the Strait of Hormuz happens, it will have significant impacts on global economy, in particular on Asian economies, because 84% of the crude oil and condensate and 83% of the liquefied natural gas that moved through the Strait of Hormuz went to Asian markets in 2024. This paper analyzes the impacts of Iran’s closure or blockage of the Strait of Hormuz on the global economy with a focus on Asian economies. II. Examples of Geopolitics Impacting Energy Prices Crude oil remains the world's most geopolitically charged commodity. Despite robust supply growth and growing energy transitions, as Figure 1 shows, turmoil in oil-producing regions such as Russian invasion of Ukraine in 2022 continues to ripple through prices.   Figure1: Examples of Geopolitics Impacting Crude Oil Prices As Figure 2 shows, in June 2025, global oil price surged into the mid‑$70s per barrel amid escalating Iran–Israel tensions and threats to the Strait of Hormuz. In mid‑June 2025, Israeli airstrikes on Iranian nuclear infrastructure led to an immediate 7–11% increase in the Brent crude oil price. The market reacted swiftly to the geopolitical risk, particularly over fears of supply disruption through the Strait of Hormuz. Iranian lawmakers, who threatened to close the Strait of Hormuz, finally approved of closing the Strait on 22 June 2025. While tanker traffic continued, the Brent crude oil price briefly climbed to $79.50 and then dropped to $74.85.   Figure 2: Movements of crude oil (WTI) and Brent oil prices III. The importance of the Strait of Hormuz 1. Location of the Strait of Hormuz As Figure 3 shows, the Strait of Hormuz, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The strait is deep enough and wide enough to handle the world's largest crude oil tankers, and it is one of the world's most important oil chokepoints.  Figure 3: Picture of the Strait of Hormuz 2. Oil flows through the Strait of Hormuz As Table 1 shows, large volumes of oil flow through the Strait of Hormuz, and very few alternative options exist to move oil out of the strait if it is closed. In 2024, oil flow through the strait averaged 20 million barrels per day (b/d), or the equivalent of about 20% of global petroleum liquids consumption. In the first quarter of 2025, total oil flows through the Strait of Hormuz remained relatively flat compared with 2024.  Table 1: volume of crude oil, condensate, petroleum transported through the Strait of Hormuz Although we have not seen maritime traffic through the Strait of Hormuz blocked following recent tensions in the region, the price of Brent crude oil (a global benchmark) increased from $69 per barrel (b) on June 12 to $74/b on June 13, 2025. This fact highlights the importance of the Strait to global oil supplies. Chokepoints are narrow channels along widely used global sea routes that are critical to global energy security. The inability of oil to transit a major chokepoint, even temporarily, can create substantial supply delays and raise shipping costs, potentially increasing world energy prices. Although most chokepoints can be circumvented by using other routes—often adding significantly to transit time—some chokepoints have no practical alternatives. Most volumes that transit the Strait of Hormuz have no alternative means of exiting the region, although there are some pipeline alternatives that can avoid the Strait. 3. Destinations Flows through the Strait of Hormuz in 2024 and the first quarter of 2025 made up more than one-quarter of total global seaborne oil trade and about one-fifth of global oil and petroleum product consumption. In addition, around one-fifth of global liquefied natural gas trade also transited the Strait of Hormuz in 2024, primarily from Qatar. Based on tanker tracking data published by Vortexa, Saudi Arabia moves more crude oil and condensate through the Strait of Hormuz than any other country. In 2024, exports of crude and condensate from Saudi Arabia accounted for 38% of total Hormuz crude flows (5.5 million b/d). As Figure 4 shows, 84% of the crude oil and condensate and 83% of the liquefied natural gas that transported through the Strait of Hormuz went to Asian nations in 2024. China, India, Japan, and South Korea were the top destinations for crude oil moving through the Strait of Hormuz. Asia accounted for a combined 69% of all Hormuz crude oil and condensate flows in 2024. These Asian markets would likely be most affected by supply disruptions at Hormuz.  Figure 4: volume of crude oil and condensate transported through the strait of Hormuz In 2024, the United States imported about 0.5 million b/d of crude oil and condensate from Persian Gulf countries through the Strait of Hormuz, accounting for about 7% of total U.S. crude oil and condensate imports and 2% of U.S. petroleum liquids consumption. In 2024, U.S. crude oil imports from countries in the Persian Gulf were at the lowest level in nearly 40 years as domestic production and imports from Canada have increased. IV. Economic Effects of the Blockade of the Strait of Hormuz Iran has repeatedly threatened to block the Strait of Hormuz, notably during crises with the United States in 2011, 2018 and 2020. So far, these threats have never materialized into a total closure, but the mere mention of them is enough to provoke crude oil price rises. According to many economists and energy experts, a blockade of the Strait of Hormuz would have significant economic impacts, including sharp increases in oil prices, disruptions to global supply chains, and potential economic sanctions. These effects could ripple through various sectors, affecting businesses, consumers, and global economies alike. The 2021 Suez Canal blockage provides a relevant, if smaller-scale, precedent. The six-day disruption in the Suez Canal caused approximately $9.6 billion per day in global trade delays according to Lloyd's List Intelligence. A Strait of Hormuz closure would likely generate significantly larger economic impacts given the strategic importance of the energy resources involved. 1. Short-term Impacts of the blockade of the Strait of Hormuz Main short-term effects of the blockage of the Strait of Hormuz are as follows:· Increased Oil Prices:A blockage would likely lead to temporary spikes in global oil prices, potentially above $100 per barrel, due to supply disruptions and increased demand. · Disrupted Supply Chains:The Strait of Hormuz is a vital transit point for oil and LNG, and any disruption could cause significant delays and disruptions to global supply chains. · Higher Shipping Costs:With increased demand and reduced supply, shipping costs, including insurance premiums, would rise. · Energy Costs:Higher oil prices would translate to higher energy costs for consumers and businesses, impacting various sectors.  2. Long-term Impacts of the blockade of the Strait of Hormuz Main long-term effects of the blockage of the Strait of Hormuz are as follows:· Reduced Oil Production:Oil exporters might reduce production to conserve resources or diversify export routes, potentially leading to long-term supply shortages. · Economic Sanctions:In response to a blockade, major oil buyers might exert pressure on oil-producing states to increase supply, potentially leading to economic sanctions against Iran. · Diversification of Trade Routes:Oil-producing states and major oil importers might explore alternative trade routes to reduce reliance on the Strait of Hormuz, potentially shifting trade patterns. · Geopolitical Instability:The Strait of Hormuz is a strategic chokepoint, and any disruption could lead to increased geopolitical tensions and conflicts.  3. Overall Economic Consequence  Overall economic effects of the blockage of the Strait of Hormuz are as follows:· Increased inflation:Higher energy costs would contribute to inflation in various countries, impacting consumers and businesses.· Global economic slowdown:Disruptions to supply chains and increased costs could lead to a slowdown in global economic growth.· Regional economic instability:The Strait of Hormuz is a key economic artery for the Middle East, and any disruption could lead to significant economic instability in the region.  V. Analysis of Economic Effects of the Blockade of the Strait of Hormuz According to several Western banks, a complete closure of the Strait could cause crude Oil prices to soar above $120 to $150 a barrel, or even more if the conflict between Israel and Iran is prolonged. According to Deutsche Bank, the scenario of a total closure of the Strait, causing an interruption of 21 million barrels a day for two months, could push oil price to over $120 a barrel, or even beyond if global supplies are permanently disrupted. Analysts from Rabobank, a Dutch multinational banking and financial services company, even mention a spike towards $150 a barrel, recalling that in 2022, after Russia invaded Ukraine, the Brent crude oil price briefly touched $139. But the difference here is major: Persian Gulf oil is geographically concentrated and trapped in a single access point, they note. TD Securities, a Canadian multinational investment bank, points out that the oil market is currently in a situation of oversupply, but if the Strait of Hormuz are blocked, even temporarily, no production capacity - neither from OPEC nor the United States - can immediately compensate for a shortfall of 17 to 20 million barrels/day. According to analyses from these Western banks, consequences of the shutdown of the Strait of Hormuz are below: • Energy inflation: Crude oil and gas prices would soar, affecting household bills, industrial costs and overall inflation. An oil price surge above $120 would trigger a drop in global growth, similar to 1973, 1990 or 2022, claims Deutsche Bank. • Energy shock in Europe and Asia: Europe is still largely dependent on Qatari LNG, which transits through Hormuz. And for Asia, the closure of the Strait would be a major blow, particularly for China, India and South Korea, according to ING, a Dutch multinational banking and financial services corporation. • Disruption of supply chains: Beyond energy, Hormuz is also a key axis of global maritime trade. A prolonged closure would increase marine insurance premiums, impacting the prices of imported goods, and delaying many imports. According to JP Morgan, the situation remains fluid, and the magnitude of potential economic impact is uncertain. However, the impact is likely to be uneven globally.S&P Global projects substantial economic consequences across multiple regions if disruptions through the Strait of Hormuz take place:· Middle East: Direct production and export disruptions would immediately impact regional economies dependent on energy revenues.· Asia-Pacific: The region’s high energy dependency creates a multiplier effect, where initial price shocks trigger broader economic impacts.· Europe: While less directly dependent on Gulf oil than Asia, Europe would face secondary supply chain bottlenecks and inflationary pressures. The Asia-Pacific region faces severe vulnerability, with approximately 84% of its crude oil imports transiting through the Strait of Hormuz according to International Energy Agency data from 2025. This dependency creates a significant economic exposure that extends far beyond immediate energy price effects. For example, nearly 90% of Iran’s oil exports go to China. China has relatively diversified oil import sources and large reserves. However, markets such as India, South Korea, Japan, and Indonesia, which rely heavily on Middle Eastern oil, will be more vulnerable. Higher sustained oil prices would have far-reaching economic consequences in Asia, including China. India, South Korea, and Japan. Even China, with their high dependence on Middle Eastern oil, would see their inflation rates accelerate, their economic growth drop and the price of goods rise because of an increase in energy prices. If rising fuel costs continue, they could be even more devastating for emerging markets in Southeast Asia. Specifically, India is highly exposed to Middle East energy. More than 60% of its oil comes via Hormuz. A $10 hike in global crude will cuts India’s GDP growth by 0.3% and raises inflation by 0.4%, according to India’s Ministry of Finance. Shipping insurers have already raised premiums by 20%. Cargo rerouting around the Cape of Good Hope adds 15–20 days and significant costs. Indian refiners are holding prices for now, but margins are tightening. According to Brig Rakesh Bhatia, an India security expert, it’s not just about energy. India’s trade with Iran, especially Basmati rice exports worth ₹6,374 crore in FY 2024–25, faces disruption due to insurance issues and port uncertainty. According to Amitendu Palit, a Senior Research Fellow and Research Lead (trade and economics) in the Institute of South Asian Studies (ISAS) at the National University of Singapore, the impacts of closing of the Strait of Hormuz or its disruptions on India are below: •  India, which imports about two-thirds of its crude and nearly half of its LNG through the Strait of Hormuz, stands to lose significantly in case of disruption. A closure or disruption in the Strait of Hormuz would spell trouble for India. Nearly 70% of its crude oil and almost 40% of its LNG imports pass through this route, with Qatar alone supplying nearly 10 million tonnes of LNG in 2024. Any blockage could severely impact energy security and prices.• Energy prices: Surging oil and gas costs could spike domestic inflation, especially in transport and food.• Currency pressure: Rising import bills would widen the current account deficit and weaken the rupee.• Sectoral impact: Aviation, logistics, tyres, and manufacturing sectors could face cost surges.• Though India holds strategic oil reserves, experts caution these are built for short-term supply shocks—not sustained disruption from a regional war. According to Palit, the major impacts on India result from the escalation in crude oil prices. India is one of the largest importers of crude oil in the world after China, Europe and the United States (US). However, unlike China, which is the largest global buyer of Iranian crude oil, India’s main sources of crude oil are Iraq, Saudi Arabia and Russia, followed by the United Arab Emirates and the US. Crude oil price rises will impact India’s overall import bill. Though many Indian refiners have long-period forward contracts to purchase crude oil at previously agreed prices, future such contracts entered into now will have to factor in the prevailing higher prices. Needless to say, spot purchases of crude oil, based on immediate requirements, will be at much higher prices. Higher crude prices will impact domestic prices across the board. Refiners are unlikely to absorb these prices and will pass them on to consumers. Liquefied petroleum gas, diesel and kerosene – all of which are refined petroleum products for common household use, including by low-income families – will become costlier. The multiplier effects of higher prices will be noticeable as energy demand is high during peak summer. Higher prices will also be experienced by civil aviation. Air travel is set to become more expensive as aviation turbine fuel prices go up. Apart from domestic air travel, international air travel will also become costlier. Air India and other Indian carriers are already taking longer routes by avoiding the Pakistani airspace. Now, more international airlines, particularly the Middle Eastern carriers, will be rerouting their flights to avoid Israeli and Iranian airspace, leading to longer routes and higher prices. This is certainly not good news during the peak tourist season, with Indians travelling to the West, especially to holiday spots in Europe. Apart from flying costs, there are major disruptions for travel agents and tour planners as they will be forced to rework itineraries. Domestic inflation prospects in India will be aggravated by the sharp escalation in gold prices. Geopolitical volatility never fails to trigger the urge to invest in ‘safe havens’. The tendency is visible through a sharp rise in the prices of the US dollar, and gold and silver. Unless there is a quick resolution of the Iran conflict, precious metal prices will remain high into the festive season, which commences in India in about three months. Consumer pockets and household budgets will feel the squeeze from the cumulative higher costs. For much of India, high prices from exogenous shocks such as the Iran conflict, is clearly not great news in a year when the overall prospects for economic growth are more subdued than in the previous years Unlike India, China appears more insulated. China has been over-importing crude for months, building strategic reserves of more than 1 billion barrels. Its diversified supply lines from Russia, Venezuela, and the Gulf provide flexibility. However, China has significant Belt and Road investments in Iran and Iraq, including infrastructure and power plants, thereby damaging China. Taiwan Minister of Economic Affairs Kuo Jyh-huei estimated on 23 June 2025 that if Iran moves to block the Strait of Hormuz, it would cause crude oil prices to rise and subsequently impact Taiwan's fuel prices and consumer price index (CPI). Currently, less than 20 percent of Taiwan's crude oil and natural gas import pass through the Strait of Hormuz. If the strait were to be blocked, ships would be forced to take longer alternative routes, delaying deliveries, causing oil prices to rise, Kuo claims that a 10 percent increase in oil prices would raise the CPI by approximately 0.3 percent. The ripple effects are already hitting Southeast Asia. As Al Jazeera reports, energy-importing nations like Indonesia, Malaysia, and Vietnam are facing higher shipping costs and insurance surcharges. Bangladesh and Sri Lanka, already under economic strain, are especially vulnerable to energy supply delays and inflation. For Southeast Asia, this situation would result in escalating costs across various sectors. Energy-dependent industries, including manufacturing, transportation, and logistics, would face soaring operational expenses, which could reduce output and increase consumer prices. The manufacturing sector in Southeast Asia, a pivotal component of regional economic growth, would be particularly adversely affected by rising fuel costs, thereby diminishing its competitiveness in the global market. Additionally, inflationary pressures would undermine consumer purchasing power, dampening domestic consumption and subsequently slowing GDP growth throughout the region.  Iran itself would not escape unscathed. Closing the Strait would choke its own oil exports, which account for 65% of government revenue, risking economic collapse and domestic unrest for Iran. On the other hand, Europe’s demand for LNG has increased since the Russia-Ukraine Conflict, although reliance on the Middle East has fallen as Europe imported more from U.S. However, Europe remains highly sensitive to energy prices. Conversely, the U.S., as a net energy exporter, could be less impacted compared to previous oil crises when it relied more on oil imports. However, the U.S. is entering this period from a vulnerable state of increasing risks of inflation and an economic slowdown. It is estimated that a USD 10 increase in oil prices could add 0.3-0.4% to inflation, exacerbating current stagflationary risks given the surge in tariffs. This also complicates the Federal Reserve's (Fed) decision-making. Economic experts still expect the Fed to be slow to cut interest rates, as inflation risks remain larger than unemployment concerns for now.  VI. Conclusion This paper showed that the blockage of the Strait of Hormuz will increase oil & other energy prices, inflation, and shipping costs, while it reduces economic growth in the world. This paper claimed that these negative impacts will be largest in Asian countries because 84% of the crude oil and condensate and 83% of the liquefied natural gas that transported through the Strait of Hormuz went to Asian markets in 2024.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Introduction Strategically located on the eastern shore of the Mediterranean, the Gaza Strip is a crucially important enclave in the Levant. Its proximity to Israel and Egypt places it in an area of high strategic sensitivity, and it is deeply involved in the decades-long Israeli-Palestinian conflict. Territorial disputes, rooted in sovereignty claims, overlap with the involvement of international actors with different economic and strategic interests.This territory, which is no more than 12 kilometers wide and a little more than 40 kilometers long, has been the scene of a confrontation between the State of Israel and the political, military and social organization Hamas (Harakat al-Muqawama al-Islamiya, Islamic Resistance Movement) for the last two years. In this war scenario, three main actors can be mentioned. On the one hand, the State of Israel, created in 1948, which has a great military and technological capacity thanks to the help of the United States. Israel distinguishes that Hamas is a permanent threat to the Israelis, hence its policy of land, naval and maritime blockade, arguing that it must defend itself from the aggressions of this group which has repeatedly launched missiles in this century. Secondly, Hamas, an organization created in 1987 during the first Intifada (rebellion or uprising), which exercises control of the Gaza Strip and leads the resistance to the State of Israel seeking the creation of a Palestinian State. Hamas' capabilities range from military development with the launching of missiles, to public administration and social work in the area. Third, the United States is an external actor in the region, but one that wields considerable influence, for while it sees itself as an arbiter in the Israeli-Palestinian issue, it has done little more than deploy over the decades military, political and financial support for the State of Israel. The choice of the period of analysis from 2023 to early 2025 is due to the succession of events in the area that have demanded specific attention, since the military escalation has denoted a more radical change in the posture of the main actors. Given this situation, the central research question is the following: How have the power dynamics between Israel, Hamas and the United States manifested themselves in the Gaza Strip during the period 2023-2025, and what have been the main implications of their actions. Hence, the main objective of this paper is to analyze the interactions between these three main actors from 2023 to early 2025. Israel, founded in 1948 and with great military and technological power thanks to U.S. support. Hamas, established in 1987, controls the Gaza Strip and leads the resistance, seeking the creation of a Palestinian state that does not recognize Israel. The United States, while presenting itself as an arbiter, has historically provided substantial military, political and financial support to Israel. The October 7, 2023 Hamas's attack, "Operation Al-Aqsa Storm," provoked the Israeli "Iron Swords" counteroffensive. This response included heavy aerial and ground bombardment throughout Gaza, causing widespread destruction and a severe humanitarian crisis. Israel seeks to dismantle Hamas' military capability, eliminate its leadership and release hostages, in addition to the establishment of a security zone. The U.S. position under the administrations of Joseph Biden and Donald Trump has been supportive of Israel, justifying its right to defend itself. However, concerns about civilian casualties and the humanitarian crisis in Gaza have led to calls for "humanitarian pauses." The "cease-fire" that is announced from time to time has not served to definitively stop the fighting; on the contrary, after its termination, the Israeli Defense Forces continue to gain ground. The fighting between Israel and Hamas in the Gaza Strip Israel's blockade of the Gaza Strip has been imposed since 2007, and its level of intensity has varied over the years, but what has not changed is the justification for it, which is related to security issues, to prevent the entry of arms and supplies that could be used by Hamas to attack Israeli territory. According to the State of Israel, the air, naval and land blockade is a fundamental part of its defense to protect its people from rockets launched from the Gaza Strip. On the other hand, the Hamas takeover came after Fatah (Palestine National Liberation Movement, a Palestinian political and military organization founded in the late 1950s, and a leading member of the Palestine Liberation Organization, PLO) lost the 2006 parliamentary elections, and Hamas fighters fought against them. Both parties claim to represent the Palestinians. The battle won by Hamas meant the dissolution of the existing unity government and the division of the Palestinian territories: West Bank for Fatah and the Gaza Strip for Hamas. Hamas' stated goal is the creation of a Palestinian state occupying the entire territory of Palestine, which means non-recognition of the State of Israel. The region has been characterized by rocket fire from Gaza into Israel and Israeli military incursions into Gaza, all within the framework of the Israeli naval, land and sea blockade, although Hamas rearmament has continued due to tunnels linking Gaza to Egypt. Background to the escalation of Violence The escalation of violence between Palestinians and Israelis in 2023, has been a process of accumulation of facts between both parties for decades. One of them has been the stalemate of the Peace Process that has promoted a radicalization of the parties' positions encouraging armed struggle. Secondly, the increasing expansion of Israeli settlements in the West Bank, considered illegal by a large part of the international community, which causes, on the one hand, the fragmentation of Palestinian sovereignty in the territory due to the inability to establish a related communication infrastructure between Palestinian lands, and on the other hand, resentment towards the Israeli occupation, which manifests itself in an armed resistance that is seen as the only solution in the absence of a political settlement. Thirdly, the problem of Jerusalem and the Holy Places (Al-Aqsa Mosque, the Dome of the Rock and other mosques), where there are restrictions on entering the mosque area by Israeli security. This is seen as a violation of religious rights. Jerusalem is claimed to be the capital of the future Palestinian state. Israel denies this because it declared it as the eternal and indivisible capital in 1980 through a law passed by the Knesset (Assembly).Fourthly, the blockade of the Gaza Strip with the resulting humanitarian crisis has generated a lot of poverty, high unemployment, limited access to basic services such as water, electricity and health, which has increased the radicalization of the population.Fifth, the situation of Palestinian prisoners in Israeli jails, some of whom have no open criminal cases, whereby hunger strikes and the conditions in which they live are a cause for protest by Palestinians in Gaza and the West Bank. Finally, the competition between Hamas and Fatah, one in Gaza and the other in the West Bank, only encourages violence to see who represents the Palestinians more, i.e., to settle the representation of the Palestinian people, thereby increasing attacks on Israel, which in turn responds militarily: "Israeli forces need to wrest territorial control from Hamas to demonstrate to Palestinians in Gaza and the West Bank that they do not guarantee their security from Israel, just as Hamas's assault has called into question Israeli confidence in its Armed Forces" (Arteaga, 2023, 3). Israel may not need to occupy the entire Gaza Strip, but what it needs is to "dismantle as much of Hamas' military prestige as it can to challenge its Palestinian leadership, otherwise Hamas will increase its ability to influence the rest of the factions in Gaza and the West Bank to the detriment of the Palestine Liberation Organization (PLO)" (ibidem). Hamas attack on Israel in 2023 During 2023, incidents in the Jerusalem area in front of mosques increased, prompting Israeli security forces to intervene, with Palestinians considering it an attack on all Muslims. Simultaneously, Israeli attacks on the West Bank increased to dismantle cells considered terrorists hiding in refugee camps or villages. Israeli settlers living in the West Bank also attacked Palestinian communities, causing damage and casualties. Israeli targeted assassinations of militants in Gaza or the West Bank, leading to hunger strikes in prisons and rebellions by the Palestinian population, should be placed in this context.Faced with this situation, on October 7, 2023, Hamas developed the operation "Al-Aqsa Storm" which involved the infiltration and coordination of fighters using paragliders, attacking Israeli security posts and using boats to infiltrate Israeli communities near the Gaza Strip. The attacks were carried out on villages, military bases, including a music festival, resulting in an estimated death toll of more than 1,200 Israelis and 250 prisoners of whom more than 50 remain in Hamas hands. The release of the hostages has been a strategy to obtain the release of Palestinian prisoners in Israeli jails. Israel's response The Israeli counter-offensive, called "Iron Swords", included intensive aerial bombardments against Hamas military targets in the Gaza Strip, but affected thousands of Palestinian civilians who were killed or wounded and their homes destroyed. The Israelis mobilized reservists for an all-out offensive against the entire Gaza Strip to completely eliminate Hamas, while imposing a total blockade on the supply of water, food, medicine and fuel, increasing the already humanitarian crisis. The destruction reached Hamas military infrastructure and civilian infrastructure such as public buildings, through ground and naval artillery and aerial bombardment. The Israeli ground incursions reached the entire Gaza Strip, because they are aimed at dismantling Hamas' military capacity, tunnels, missile launcher bases, supply sites, arsenals, etcetera. They also aim to dismantle Hamas by eliminating its leaders and the militants responsible for the offensive, to rescue the Israeli hostages, and to establish a future security zone to prevent further Palestinian attacks. Israel has been criticized for the disproportionate response of the Israel Defense Forces (IDF) to the Hamas attack, the failure to distinguish between civilian and military targets and to plan the attacks in such a way as to avoid civilian casualties. Israel has responded that Hamas uses the civilian population as a shield, and that the territory is densely populated so that war casualties could not be avoided, however, despite having the advantage in war material, so far it has not been enough to defeat Hamas militarily. Guerrilla warfare is the tactic employed by Hamas and that has been a complication for Israel, as it had been for the United States in Afghanistan and Iraq. In addition, Hamas blends in among civilians making it even more difficult to locate its fighters, while the Israeli response causes collateral damage among civilians and what little infrastructure is left standing after nearly two years of conflict: "Gaza's demographic characteristics as a 'soft' factor are an advantage against Israel's 'hard' capabilities, where Hamas operatives can intrude into the population to set up ambushes against IDF armored columns" (Trujillo Borrego, 2025, 16). The government of Benjamin Netanyahu gained a great deal of public support for the military operation, however, the rising number of casualties along with the destruction caused in Gaza, brought down support. The families of the hostages are urging the government to enter into negotiations with Hamas to get them back, which clashes with the government's objectives. The mobilization of the reservists, together with the prolongation of the war, has generated social and economic problems, questioning the Netanyahu government, and also the intelligence agencies that were surprised by the preparation and the surprise of the Hamas attack. The position of the United States Historically, the United States has supported Israel economically, politically and militarily based on strategic and geopolitical interests. The Israeli lobby in the US Congress, the veto to UN Security Council Resolutions and the presidential statements, have strengthened the bond between both countries: "Israel remains the main recipient of US aid, an aid that has allowed it to transform its Armed Forces and maintain the "qualitative military edge" (QME) against its neighbors. It has always been guaranteed by the US Congress and has had the support of both major parties, in part thanks to the promotion at the domestic level of organizations in defense of Israel since the Yom Kippur War in 1973 (García Encina, 2023, 3). The US justification during the administration of President Joseph Biden (2021-2025), was that Israel had the right to defend itself by condemning Hamas in solidarity with its traditional ally. Support was maintained until the US administration began to worry about civilian casualties and the humanitarian crisis. Hence the calls for a "humanitarian pause" and a "cease-fire" for the hostage exchange. The position of current US President Donald Trump has been one of absolute support for Israel. While he has stated that "a lot of people are starving" and that "bad things are happening", his relationship with the Israeli Prime Minister has not changed despite mentioning that humanitarian aid is needed. In that sense, he has stated that Hamas has to be completely disarmed in order for the Gaza Strip to be a territory without weapons. Also, one of his proposals is that the United States take control of Gaza and relocate Palestinians to other countries because it is a pile of rubble, violating international law by the principle of self-determination of peoples and determining a forced displacement of Palestinians: “Despite its support for a two-state solution, the lack of effective pressure on Israel and the focus on Israeli security over justice for Palestinians have hindered significant progress toward peace. U.S. policy in the region has oscillated between attempts at mediation and unconditional support for Israel, making it impossible for the U.S. to act as an impartial mediator.” (Donoso, 2025, pp. 27–28) However, Trump has hinted at Israel's unwillingness to negotiate an end to the war, and has expressed that hunger should not be used as a weapon. In addition, he has lifted sanctions against a historical enemy of Israel, Syria, whose president Ahmed al-Sharaa, was linked to Al Qaeda, although he now belongs to another group called Hayat Tahrir al Sham (HTS) (Organization or Life for the Liberation of the Levant). Israel has opposed the lifting of sanctions and has bombed Syria. Trump’s tour of the Middle East this past May demonstrated that the Israeli-Palestinian conflict has taken a back seat due to the intransigence of both Hamas and Israel. For this reason, the U.S. president—who did not visit Israel—traveled to Saudi Arabia, Qatar, and the United Arab Emirates, seeking to invest in the oil sector and encouraging those countries to invest in the United States or purchase American products. For example, Saudi Arabia agreed to buy $142 billion worth of military equipment, including missiles, communication systems, and more. The total deal amounts to $600 billion, covering trade, investments, and arms purchases. Meanwhile, in contrast to the U.S. position of keeping control over the Gaza Strip, there is another initiative led by regional countries such as the United Arab Emirates to invest in Gaza’s reconstruction—without relocating Gazan residents to other countries in the region. Final Considerations The Gaza Strip, a narrow territory located on the eastern shore of the Mediterranean, stands as an epicenter of the Israeli-Palestinian conflict. Surrounded by Israel and Egypt, it represents a strategic geographic point in the region, and has witnessed violence, blockades and a complex interplay between local, regional and international actors, with Israel, Hamas and the United States playing crucial roles. Israel has exerted overwhelming influence with ground and aerial bombardments throughout the Strip to not only eliminate Hamas, but also to secure the release of the hostages. Although at the beginning Israeli society supported this campaign, the cost in lives is being negatively evaluated, in addition to the call for reservists. This call-up has damaged the Israeli economy by extracting more than 300,000 reservists, affecting the labor force in different sectors of the economy. Israel, supported by the United States, has so far declared that it will not end the operation until the elimination of Hamas, the latest [Hamas] has demonstrated a great defensive and organizational capacity, which has been beneficial to the international community that has begun to criticize the Israeli attack due to the high cost in Palestinian victims and the precarious situation of the Gazans. According to the Hamas-controlled Ministry of Health in the Gaza Strip, more than 50,000 Gazans had been killed and more than 100,000 wounded as of March this year, but Israel contradicts these figures, while not allowing impartial observers and journalists into the area. In addition, more than 70% of the infrastructure and homes have been destroyed by Israeli air, land and naval bombardments. This has been compounded by the collapse of industrial production, rising inflation due to food and manufactured goods shortages, and an increase in both overall                 and youth unemployment—factors that further fuel resentment toward those considered responsible, namely the Israelis. Likewise, both exports (such as scrap metal, tropical fruits, and olive oil) and imports (especially food) have declined as a result of the conflict. The United States supported Israel's position from the beginning, but President Trump is now calling for the opening of a humanitarian corridor for the residents of Gaza. While Israel has managed to dismantle most of Hamas’ operational infrastructure, it has not succeeded in defeating the organization, nor in freeing all the hostages, and now is facing mounting international condemnation and accusations of war crimes. At the same time, Israel's public spending has increased significantly, primarily due to military operations, while the country's economic development and employment rates have fluctuated over the past two years. Naturally, the Palestinian economy has suffered far more than Israel’s.The escalation of violence between Palestinians and Israelis since 2023 is the result of a series of long-standing events and processes. Rocket attacks from Gaza, assaults by Israeli settlers on Palestinians in the West Bank, Israeli responses to missile fire, incidents near the mosques in East Jerusalem, the deplorable health conditions in Gaza due to the Israeli blockade, and the destruction of Gazan infrastructure have all prolonged the conflict and deepened tensions. In short, the intransigence of both parties—along with unwavering U.S. support for Israel and diplomatic efforts that have so far failed—has prolonged the conflict, preventing the achievement of a fair and lasting political solution for both sides. This has caused a high number of civilian casualties in Gaza, where a collapsing health system struggles to respond and food is scarce. At the same time, Palestinians living in the West Bank continue to suffer from attacks and displacement by Israeli settlers expanding their areas of control. Bibliography Arteaga, F. (2023). The war between Hamas and Israel: long and hard. Real Instituto Elcano, pp. 1-5. https://media.realinstitutoelcano.org/wp-content/uploads/2023/10/la-guerra-entre-hamas-e-israel-larga-y-dura.pdfBBC News World (2020). West Bank: 6 questions to understand the situation and Israel's plans to annex part of this Palestinian territory. https://www.bbc.com/mundo/noticias-internacional-53142850BBC News World (2021). Israeli-Palestinian conflict: 6 maps showing how the Palestinian territory has changed over the past decades. https://www.bbc.com/mundo/noticias-internacional-54162476BBC News World (2025). "Bullets raining down on us like a deluge": Israel attacks southern Gaza and already over 50,000 dead. https://www.bbc.com/mundo/articles/c0l1r6xdl9koBBC News World (2025). The history of the Gaza Strip, the former territory of the Ottoman Empire destroyed by Israel and from which Trump wants to evict Palestinians. https://www.bbc.com/mundo/articles/c06r7nlr84koDonoso, C. (2025). The United States: a partial and weak mediator in the Israel-Hamas conflict. In, Velasco, C. M. Á., Saint-Pierre, H. L., Mei, E., Borrego, E. T., Donoso, C., & Botta, P. Central theme: Reflections on a year of conflict: Israel and Palestine in the spotlight. Instituto de Altos Estudios del Estado, Paralelo Cero, Estudios estratégicos, geopolíticos y de seguridad, n° 8, pp. 23-30. https://editorial.iaen.edu.ec/wp-content/uploads/sites/12/2025/01/PARALELO-0-Boletin-8-Final-1.pdfDoucet, L. (2025). What is the $53 billion plan for Gaza presented by Arab countries. BBC News World. https://www.bbc.com/mundo/articles/c5yx07841v9oGarcía Encina, C. (2023). USA and Israel: the strength of a relationship. Real Instituto Elcano, pp. 1-9. https://media.realinstitutoelcano.org/wp-content/uploads/2023/11/eeuu-e-israel-la-fortaleza-de-una-relacion.pdfGoldman, A., Bergman, R., Kingsley, P., Koplewitz, G., (2024). Israel's subway war against Hamas tunnels in Gaza. Infobae. https://www.infobae.com/america/the-new-york-times/2024/01/17/la-guerra-subterranea-de-israel-contra-los-tuneles-de-hamas-en-gaza/Gómez Díaz, L. (2023). Hamas and Fatah, rivals with different visions of Israel and the future of the Palestinians. Corporación de Radio y Televisión Española. https://www.rtve.es/noticias/20231020/hamas-fatah-rivales-politicos-palestinos-israel-diferencias/2458571.shtml.Hamdar, M., Razek, H. (2023). The aerial operation Hamas used to infiltrate Israel undetected. BBC News Arabic. https://www.bbc.com/mundo/articles/cv20n56p5ynoInfobae. (2025). With the flag flying in Damascus after 13 years the U.S. embassy in Syria was reopened. https://www.infobae.com/estados-unidos/2025/05/29/reabrieron-la-residencia-del-embajador-de-estados-unidos-en-damasco-mientras-washington-repara-los-lazos-con-siria/Infobae. (2025). Donald Trump spoke about the situation in the Gaza Strip: Many people are starving. https://www.infobae.com/estados-unidos/2025/05/16/donald-trump-hablo-sobre-la-situacion-en-la-franja-de-gaza-mucha-gente-esta-muriendo-de-hambre/Knickmeyer, E. (2025). Trump's Mideast trip highlights deals and diplomacy, but shuts up on human rights. Los Angeles Times. https://www.latimes.com/espanol/eeuu/articulo/2025-05-16/viaje-de-trump-a-oriente-medio-destaca-por-acuerdos-y-diplomacia-pero-calla-sobre-derechos-humanosMerino, A. (2023). The map of the Israeli blockade of Gaza or how to make a territory uninhabitable. https://elordenmundial.com/mapas-y-graficos/mapa-bloqueo-israeli-gaza-territorio-inhabitable/United Nations (2024). Gaza crimes, pollution deaths, Haiti...Wednesday's news. News United Nations. https://news.un.org/es/story/2024/06/1530656Radio France Internationale (2025). Hamas releases three hostages and defies Trump's Gaza plan. https://www.bbc.com/mundo/articles/c06r7nlr84koSaul, J., Farrell, S. (2023). The complex network of Hamas tunnels facing the Israeli army in Gaza. Infobae. https://www.infobae.com/america/mundo/2023/10/26/la-compleja-red-de-tuneles-de-hamas-de-cientos-de-kilometros-de-largo-a-la-que-se-enfrenta-el-ejercito-israeli-en-gaza/Seddon, S., Palumbo, D. (2023). How Hamas staged a blitz attack on Israel that no one thought possible. BBC News World. https://www.bbc.com/mundo/articles/c25we958pwqoTrujillo Borrego, E. (2025). The implicit goals of Israel in its war operations in the Gaza Strip. In, Velasco, C. M. Á., Saint-Pierre, H. L., Mei, E., Borrego, E. T., Donoso, C., & Botta, P. Central theme: Reflections on a year of conflict: Israel and Palestine in the crosshairs. Instituto de Altos Estudios del Estado, Paralelo Cero, Estudios estratégicos, geopolíticos y de seguridad, no. 8, pp. 13-22. https://editorial.iaen.edu.ec/wp-content/uploads/sites/12/2025/01/PARALELO-0-Boletin-8-Final-1.pdf

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The relationship between the United States and Israel has been described as one of the most enduring and strategic alliances in modern politics. Beyond shared cultural ties and democratic values, this alliance has been heavily sustained by the systematic influence of pro-Israel state and lobbying groups within U.S political institutions. In this context, the Israeli lobby, most notably represented by organizations such as the American Israel Public Affairs Committee (AIPAC), has played a central role in shaping key foreign policy decisions, from military aid assistance to diplomatic recognition of Israeli interests on the international stage (Mearsheimer & Walt, 2007).  While the presence of interest groups is a common feature of the U.S. democratic system, the Israeli lobby stands out due significant presence and impact on Middle East policy and America diplomacy. As some critics argue, this influence has at times, led to the subordination of U.S. strategic interest in favor of Israeli priorities (Pappé,2017). This article analyzes how the Israeli lobby operates, the mechanisms it employs, and the broader implications it holds for the independence of U.S. foreign policy. Mechanisms of Influence on U.S Foreign Policy         The Israeli state and lobby employs a wide array of tools to influence U.S foreign policy, combining financial, institutional, and narrative-based strategies. One of the most impactful methods is political funding. Pro-Israel Political Action Committees (PACs) have historically directed campaign contributions to congressional candidates who demonstrate unwavering support for Israel, in 2020 there a significant contribution of $30 million to federal campaigns. (OpenSecrest,2021). Lobbying efforts also extend to direct engagement with policy makers. AIPAC, for instance, organizes annual conferences that attract top U.S. officials, including presidents and congress members. Through strategic lobbying, the Israeli lobby has been instrumental in passing measures such as the US-Israel Strategic Partnership Act and ensuring continued military aid exceeding $3.8 billion annually (Mearsheimer & Walt, 2007).  While often presented as an independent force acting within the American political landscape, the Israeli lobby maintains close ties with the Israeli government, which allows it to act as a semi- official conduit for its foreign policy objectives. One clear example of his coordination was evident during the Obama administration’s negotiations of the Iran nuclear deal (JCPOA). During the Obama administration, to finalize the Iran nuclear deal (JCPOA), Israeli Prime Minister Benjamin Netanyahu addressed a joint session of Congress in 2015 without the White House´s approval. This unprecedented move coordinated with Republican congressional leaders highlighted how the Israeli lobby facilitated direct access to U.S. political institutions, effectively bypassing executive authority (Beauchamp, 2015).     Over decades, Israeli influence within U.S foreign policy decision making has moved beyond traditional lobbying, a structural element in how Washington approaches the Middle East. What initially began as advocacy in cultural and strategic alignment has gradually evolved into a form of embedded influence that often shapes policy trajectories before they reach public debate. In recent years, the influence has been reinforced by Israel´s growing military modernization and significant victories against their enemies such as Iranian proxies in Syria, Lebanon, and Gaza. These developments and Israeli momentum have not only bolstered Israel´s image as a capable regional power but also fueled a more assertive posture in its foreign relations. The confidence generated by these military gains has translated into hardened political positions and intensified pressure on allies, particularly the United States.                  These examples illustrate that the Israeli state and lobby does not operate in isolation but often reflects, channels, and amplifies the geopolitical agenda of the Israeli state. This dynamic complicates the notion of national interest within the U.S. foreign policy, especially when lobbying efforts coincide with foreign governmental objectives. From Influence to Entrapment: The U.S.- Israeli Alliance in the Iran Conflict               Despite initial promises of restraint under the renewed “America First” vision, the current U.S. administration finds itself increasingly entangled in a regional conflict it once sought to avoid. Under President Trump´s second term, American foreign policy was publicly framed around non-intervention, prioritizing domestic renewal over costly military initiatives and strategic assertiveness, which have steadily eroded Washington’s space for independent decision making.               Israel´s sustained rhetorical pressure and military assertiveness have shaped U.S. involvement in the ongoing war with Iran. Drawing on a momentum strengthened by recent strikes on Iranian nuclear infrastructure, Israeli leadership has framed Tehran as an imminent existential threat, pressuring Washington to intensify its military posture. As Froman (2024) observes, “Israel´s actions have fundamentally reshaped the security landscape of the Middle East.”  This situation highlights a concerning shift in how the United States is managing its foreign policy in the Middle East. Rather than settling the pace or leading diplomatically, Washington is now largely responding to events already set in motion by Israel. This reflects the long-standing nature of the U.S.-Israel relationship. America leaders now find themselves caught in a conflict they did not start but now must lead. With Iran already responding militarily and tensions rising across the region, the risk of a wider war is growing quickly. This mirrors past U.S experiences in Iraq and Afghanistan, where limited interventions turned into long, costly wars. As Israel continues to act from its position of strength, the U.S. faces danger of a new war.             With the collapse of the Joint Comprehensive Plan of Action (JCPOA) and the sidelining of multilateral diplomacy, there is little room left for negotiation. Institutions such as the United Nations or the International Atomic Energy Agency (IAEA) have been largely absent in terms of more action, also the intervention of the members of the security council of the United Nations, reflecting how hard power dynamics have overtaken diplomatic engagement. In this vacuum, the Israeli security narrative has become dominant. A War of Choice or a Path to Diplomacy The ongoing conflict has triggered a significant reconfiguration of the Middle East´s power structure. For now, Israel, strategically supported by the United States, has asserted its military and political dominance. Iran, weakened by the degradation of its proxy network and recent strikes on three nuclear facilities, finds itself momentarily contained. This alignment places the U.S.-Israel axis in a position of regional superiority.   However, this superiority could be temporary. If Iran succeeds in eventually acquiring a nuclear weapon, the balance may shift again, this time not through conventional power, but through nuclear deterrence. As seen during the cold war, deterrence is not about battlefield victory but about creating unacceptable costs for aggression.  A nuclear-armed Iran would no longer need to outmatch Israel or the U.S. militarily. This is precisely why diplomacy must be reviewed not as appeasement, but as a tool to prevent irreversible escalation. As Vaez (2025) states, “Washington and its partners should not give up on diplomacy with Iran not because it's not easy, but because it is the only sustainable way to prevent further escalation.” The current moments offer a fleeting opportunity: one where military success has bought time for diplomacy to reassert itself. Among the most urgent priorities               is re-engaging in serious negotiations surrounding the Joint Comprehensive Plan of Action (JCPOA), not simply to contain Iran´s nuclear ambitions, but to rebuild a broader framework of strategic dialogue. Failing to seize that opportunity could lock the region into a new war, one shaped not by diplomacy.             References:Beauchamp, Z. (2015, March 3). Why Netanyahu’s speech to Congress is one of the most controversial in history. Vox.  https://www.vox.com/2015/3/3/8142663/netanyahu-speech-congressMearsheimer, J. J., & Walt, S. M. (2007). The Israel Lobby and U.S. Foreign Policy. Farrar, Straus and Giroux.OpenSecrets. (2021). Pro-Israel PACs contributions to candidates, 2019–2020. Center for Responsive Politics.             https://www.opensecrets.org/political-action-committees-pacs/industry-detail/Q05/2020Pappé, I. (2017). Ten Myths About Israel. Verso Books.Vaez, A. (2025, June 16). Don’t Give Up on Diplomacy With Iran. Foreign Affairs. https://www.foreignaffairs.com/israel/dont-give-diplomacy-iran

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском After 12 days of war, US President Donald Trump announced a ceasefire between Israel and Iran that would bring to an end the most dramatic, direct conflict between the two nations in decades. Israel and Iran both agreed to adhere to the ceasefire, though they said they would respond with force to any breach. If the ceasefire holds – a big if – the key question will be whether this signals the start of lasting peace, or merely a brief pause before renewed conflict. As contemporary war studies show, peace tends to endure under one of two conditions: either the total defeat of one side, or the establishment of mutual deterrence. This means both parties refrain from aggression because the expected costs of retaliation far outweigh any potential gains. What did each side gain? The war has marked a turning point for Israel in its decades-long confrontation with Iran. For the first time, Israel successfully brought a prolonged battle to Iranian soil, shifting the conflict from confrontations with Iranian-backed proxy militant groups to direct strikes on Iran itself. This was made possible largely due to Israel’s success over the past two years in weakening Iran’s regional proxy network, particularly Hezbollah in Lebanon and Shiite militias in Syria. Over the past two weeks, Israel has inflicted significant damage on Iran’s military and scientific elite, killing several high-ranking commanders and nuclear scientists. The civilian toll was also high. Additionally, Israel achieved a major strategic objective by pulling the United States directly into the conflict. In coordination with Israel, the US launched strikes on three of Iran’s primary nuclear facilities: Fordow, Natanz and Isfahan. Despite these gains, Israel has not accomplished all of its stated goals. Prime Minister Benjamin Netanyahu had voiced support for regime change, urging Iranians to rise up against Supreme Leader Ali Khamenei’s government, but the senior leadership in Iran remains intact. Additionally, Israel has not fully eliminated Iran’s missile program. (Iran continued striking to the last minute before the ceasefire.) And Tehran did not acquiesce to Trump’s pre-war demand to end uranium enrichment. Although Iran was caught off-guard by Israel’s attacks — particularly as it was engaged in nuclear negotiations with the US — it responded by launching hundreds of missiles towards Israel. While many were intercepted, a significant number penetrated Israeli air defences, causing widespread destruction in major cities, dozens of fatalities and hundreds of injuries. Iran has demonstrated its capacity to strike back, though Israel has succeeded in destroying many of its air defence systems, some ballistic missile assets (including missile launchers) and multiple energy facilities. Since the beginning of the assault, Iranian officials have repeatedly called for a halt to resume negotiations. Under such intense pressure, Iran has realised it would not benefit from a prolonged war of attrition with Israel — especially as both nations face mounting costs and the risk of depleting their military stockpiles if the war continues. As theories of victory suggest, success in war is defined not only by the damage inflicted, but by achieving core strategic goals and weakening the enemy’s will and capacity to resist. While Israel claims to have achieved the bulk of its objectives, the extent of the damage to Iran’s nuclear program is not fully known, nor is its capacity to continue enriching uranium. Both sides could remain locked in a volatile standoff over Iran’s nuclear program, with the conflict potentially reigniting whenever either side perceives a strategic opportunity. Sticking point over Iran’s nuclear program Iran faces even greater challenges when it emerges from the war. With a heavy toll on its leadership and nuclear infrastructure, Tehran will likely prioritise rebuilding its deterrence capability. That includes acquiring new advanced air defence systems — potentially from China — and restoring key components of its missile and nuclear programs. (Some experts say Iran has not used some of its most powerful missiles to maintain this deterrence.) Iranian officials have claimed they safeguarded more than 400 kilograms of 60% enriched uranium before the attacks. This stockpile could theoretically be converted into nine to ten nuclear warheads if further enriched to 90%. Trump declared Iran’s nuclear capacity had been “totally obliterated”, whereas Rafael Grossi, the United Nations’ nuclear watchdog chief, said damage to Iran’s facilities was “very significant”. However, analysts have argued Iran will still have a depth of technical knowledge accumulated over decades. Depending on the extent of the damage to its underground facilities, Iran could be capable of restoring and even accelerating its program in a relatively short time frame. And the chances of reviving negotiations on Iran’s nuclear program appear slimmer than ever. What might future deterrence look like? The war has fundamentally reshaped how both Iran and Israel perceive deterrence — and how they plan to secure it going forward. For Iran, the conflict has reinforced the belief that its survival is at stake. With regime change openly discussed during the war, Iran’s leaders appear more convinced than ever that true deterrence requires two key pillars: nuclear weapons capability, and deeper strategic alignment with China and Russia. As a result, Iran is expected to move rapidly to restore and advance its nuclear program, potentially moving towards actual weaponisation — a step it had long avoided, officially. At the same time, Tehran is likely to accelerate military and economic cooperation with Beijing and Moscow to hedge against isolation. Iranian Foreign Minister Abbas Araghchi emphasised this close engagement with Russia during a visit to Moscow this week, particularly on nuclear matters. Israel, meanwhile, sees deterrence as requiring constant vigilance and a credible threat of overwhelming retaliation. In the absence of diplomatic breakthroughs, Israel may adopt a policy of immediate preemptive strikes on Iranian facilities or leadership figures if it detects any new escalation — particularly related to Iran’s nuclear program. In this context, the current ceasefire already appears fragile. Without comprehensive negotiations that address the core issues — namely, Iran’s nuclear capabilities — the pause in hostilities may prove temporary. Mutual deterrence may prevent a more protracted war for now, but the balance remains precarious and could collapse with little warning.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Abstract This article analyses the shifts in security and defence policies across the six states of the Gulf Cooperation Council (GCC) and disentangles political and geopolitical strains in the U.S.-Gulf relationship from practical measures to boost cooperation and deepen interoperability. In examining the trajectory of security and defence relationships, the article assesses the stability and durability of the underlying components of U.S.-Gulf partnerships in a time of rapid change. The article begins a section that details how and why the perception of U.S. disengagement has evolved, despite ongoing reliance on facilities such as Al-Udeid in Qatar for forward basing arrangements, before a second section examines regional responses to the withdrawal from Afghanistan in 2021, the Russia-Ukraine war in 2022, and the Israeli war in Gaza that erupted in 2023. A third section explores the ‘nuts and bolts’ of security and defence relationships and considers issues such as U.S. arms sales and Department of Defense programs, such as Red Sands in Saudi Arabia and the Comprehensive Security Integration and Prosperity Agreement with Bahrain, as ways to boost cooperation in the face of political tension and stiff competition. As U.S. troop levels have ebbed and flowed, a final section considers whether a more flexible approach to security relationships is sustainable in a far more transactional era of international power and politics. Little more than 6 months separated the chaotic U.S. withdrawal from Afghanistan in August 2021 from the full-scale Russian invasion of Ukraine in February 2022.[1] The manner by which the U.S. was seen by many observers to abandon the Afghan government in the face of a resurgent Taliban cast doubt among partner nations in the Gulf Cooperation Council (GCC) as to the reliability and ‘staying power’ of the U.S. in the region, and rekindled memories of the withdrawal of American support for Hosni Mubarak in Egypt as the Arab uprisings began in early 2011.[2] Kabul appeared to be another blow to a U.S.-led regional order that was already being questioned by officials in the Gulf States even as they contributed to its weakening by diversifying their own political, economic, and, to a lesser extent, security and defence relationships. For many in leadership positions in the Gulf States, the fall of Kabul appeared to be one more step in a process of U.S. disengagement which they perceived to be one-directional and to take place across successive presidencies as different as Obama was to Trump and Trump was to Biden.[3] Whereas the withdrawal from Afghanistan witnessed the U.S. acting unilaterally to secure its own interests, narrowly defined and without seeming to take account of those of its partners and allies, the build-up of tension in Ukraine saw the Biden administration engage intensively with allies and partners in the runup to and aftermath of the Russian invasion. U.S. intelligence and information-sharing, which were seen to have erred badly in Afghanistan in 2021, was a high-profile and very visible policy over Ukraine in 2022, and restored a measure of credibility, especially among NATO allies.[4] However, in the Gulf States, the policy response to Ukraine did not deliver a ‘dividend’ in terms of restoring faith in the U.S. as a trustworthy partner, as GCC states pursued hedging strategies and further diversified their range of security partnerships, albeit in divergent ways. The war in Gaza, which erupted after the Hamas-led incursion into southern Israel on October 7, 2023, generated additional questions about the durability of an increasingly fragile regional order.[5] And yet, the ‘nuts and bolts’ of security and defence ties between the U.S. and Gulf States have continued to evolve, albeit in a looser and more transactional form that at any time since the structure of U.S. primacy in the region took shape in the late-1980s and early-1990s. Examples of diverging trajectories include the United Arab Emirates becoming a safe haven for Russian capital and business, regional responses to Houthi attacks on shipping in the Red Sea, and the resilience of Saudi-Iranian ties even as hopes for Saudi-Israeli normalization faded. In October 2024, the decision of the Saudi Crown Prince, Mohammed bin Salman, to receive Iran’s Foreign Minister, Abbas Araghchi, just as the Biden administration was weighing its support for a retaliatory Israeli attack on Iran, demonstrated how perceptions of regional interests were moving apart.[6] It is this ‘puzzle’ of divergence in the political and security tracks of U.S.-Gulf relations that is the focus of analysis, as ties have simultaneously become more fragile yet also shown resilient adaptability. This article examines the changing trajectories of U.S.-Gulf security relationships and moves beyond the focus, often seen in American policy discourse, on U.S. demands for ‘burden-sharing’ among regional partners, which redoubled in the first and second Trump presidencies. Instead, the article examines the ways in which the Gulf States are developing a more transactional approach to U.S. partnerships, resulting in a more flexible model of cooperation. This is consistent with broader shifts from a U.S.-dominated regional order toward the internationalization of regional security structures, as policy preferences (on all sides) have gradually diverged. While there is no monolithic approach to ‘the Gulf’, by and large there is a trend toward states no longer being willing to rely solely on U.S. guarantees, borne out of events in the 2010s, and to developing a more diversified portfolio of security and defence partnerships, again at different speeds across different countries, and with no uniformity on the choice of external partner. At the same time, several Gulf States, notably Saudi Arabia, the United Arab Emirates (UAE), and Qatar have emerged as assertive regional and international actors, and new forms of partnership have evolved. There are four sections to this article, which begins with an examination of how and why the perception in the Gulf States of U.S. disengagement has evolved, despite ongoing reliance on facilities such as Al-Udeid in Qatar for forward basing arrangements. A second section examines regional responses to the withdrawal from Afghanistan in 2021, the Russia-Ukraine war in 2022, and the conflict in Gaza which began in October 2023. The third section explores the ‘nuts and bolts’ of security and defence relationships and considers issues such as U.S. arms sales and Department of Defense programs, such as Red Sands in Saudi Arabia and the recently concluded Comprehensive Security Integration and Prosperity Agreement with Bahrain, as ways to boost practical security cooperation in the face of political tension and stiff competition. As U.S. troop levels have ebbed and flowed, the concluding section considers whether and how a more flexible approach to security relationships is sustainable in a more transactional era of power and politics. Gulf States’ Perceptions of U.S. Disengagement A belief held by many policymakers in the Gulf States, that the U.S. is less engaged and/or less reliable and predictable in its approach to regional affairs, has taken root over the decade and a half which has elapsed since the Arab Spring uprisings of 2010–11. To be sure, this belief is rooted in an idealized view of U.S.-Gulf relations which has, over the three decades since the Gulf War in 1991, been based on extremely visible and large-scale force deployments in the region, especially during the wars in Afghanistan and Iraq, which were not typical of long-term trends.[7] Nevertheless, this perception has lasted across consecutive presidential administrations and has become more deeply entrenched precisely because a pattern has been seen to develop across such different presidencies as Obama to Trump to Biden, and as U.S. troop levels in the region were inexorably drawn down.[8] While there was no regionwide consensus or monolithic view of the U.S. in the Gulf, and no one single incident which sparked a reassessment, attitudes evolved in response to a series of policy decisions which unfolded over the space of a decade. The effect has been to strengthen a process of diversification of Gulf States’ security and defence relationships to avoid over-reliance on any single partner in a world of growing multipolarity and strategic options.[9] Deciding where to begin with the many issues which caused degrees of concern in Gulf capitals at U.S. policymaking intent is a little like asking the proverbial question about how long a piece of string might be. For example, the second term of the George W. Bush administration saw frictions develop between the U.S. and GCC states, notably Saudi Arabia, over the mishandling of the occupation of post-Saddam Iraq and the sense of anger in Gulf capitals that Iran appeared to be the primary geopolitical beneficiary.[10] This caused significant mistrust in Riyadh at U.S. policy intent (and outcomes) in Iraq and the region.[11] It was in the Obama administration, however, that the perception of drift began to develop, including in relation to the so-called ‘pivot to Asia’ in the late-2000s which Gulf leaders (erroneously) saw as a shift in U.S. focus away from the Middle East, rather than post-Cold War Europe.[12] However, it was the withdrawal of political support from the embattled Egyptian president, Hosni Mubarak, in February 2011, which caused shock and bitterness in Gulf capitals, who saw the move as a betrayal of a longstanding U.S. partner.[13] The Obama administration’s response to the Arab uprisings (which, in the case of unrest in GCC states, was far more muted and reflective of U.S. interests in the stability of its regional partners) was followed by the disclosure in November 2013 that American and Iranian officials had been meeting secretly in Oman for over a year, and by the subsequent negotiations between the P5 + 1 and Iran for a Joint Comprehensive Plan of Action (JCPOA) to address the Iranian nuclear file in 2015. Both negotiations cut out the GCC states and added to concerns at the direction of U.S. policymaking in the region.[14] Partly in response to concerns that the JCPOA focused too narrowly on only one aspect of Iran’s regional activity and did not address other issues, Saudi Arabia and the UAE intervened militarily in Yemen in March 2015 to push back the advance of Houthi rebels they believed were in receipt of direct Iranian assistance.[15] An interview given by Obama to The Atlantic magazine in 2016 sealed the breakdown in working relations as officials reacted with fury to a comment about ‘free riders’ which they perceived to be directed at them rather than, as was the case, against the British and French governments over their intervention in Libya in 2011.[16] Genuine displeasure, as well as a degree of bewilderment, at the direction of certain aspects of the Obama administration’s policies toward the Middle East contributed to the early embrace of the Trump presidency by officials in several Gulf capitals, including Riyadh and Abu Dhabi as well as Manama.[17] In June 2017, Trump initially endorsed the Saudi-Emirati-Bahraini (as well as Egyptian) move to isolate Qatar, in a decision which caused shockwaves in Doha as well as in the U.S. Departments of State and Defense. The sight of a sitting president seemingly abandoning a U.S. partner, albeit only temporarily, raised powerful questions about the reliability and durability of the Gulf States’ most important external relationship.[18] Two years later, it was the Saudis’ and Emiratis’ turn to call into question the partnership with the U.S. as the Trump administration chose not to respond to a series of attacks, generally although never formally attributed to Iran or to Iranian proxy groups, on energy and maritime targets in Saudi Arabia and the UAE.[19] In September 2019, 2 days after a missile and drone attack on Saudi oil facilities temporarily knocked out half the Kingdom’s oil production, Trump noted pointedly ‘That was an attack on Saudi Arabia, and that wasn’t an attack on us’ and added that ‘I’m somebody that would like not to have war’.[20] Political decisions by successive presidential administrations therefore injected doubt as to the value or even the existence of security guarantees which were believed by many observers of regional affairs to form the bedrock of contemporary U.S.-Gulf relations.[21] The impact became clear when tensions between the United States and Iran soared in the aftermath of the killing of Qassim Soleimani in an American drone strike in Baghdad in January 2020, when regional officials in GCC states called for de-escalation.[22] President Biden sought to restore U.S. credibility when he reasserted ‘the U.S. commitment to help Saudi Arabia defend its territory as it faces attacks from Iranian-aligned groups’ after he took office in 2021.[23] However, poor relations between Biden and Saudi Crown Prince Mohammed bin Salman, stemming from comments Biden made in a campaign debate in 2019, proved insurmountable, with MBS going so far as to reply ‘Simply, I do not care’, when asked in 2022 what he thought of Biden’s opinion of him.[24] Regional Responses to Afghanistan, Ukraine, and Gaza In August 2021, the disorganized and seemingly unilateral nature of the final U.S. withdrawal from Kabul provided yet another indication, in the eyes of already sceptical policy analysts and officials in GCC states, of the potentially capricious nature of American interests. While there was a broad consensus that the ‘forever wars’ launched in the 2000s could not continue indefinitely, the manner by which the Biden administration conducted its final drawdown reinforced the concerns listed above about the durability of U.S. commitments to regional partners, and as elements of the political right and left coalesced around support for policies of restraint and isolationism.[25] The sight of the Afghan air force rendered inoperable after the withdrawal of American training and maintenance, and the flight of Ashraf Ghani, the U.S.-backed President, to the UAE, were indicators of the vulnerability of over-reliance on single security partners, however powerful.[26] Less than six months later, the strenuous attempts made by the Biden administration to work with allies and partners to coordinate policy in early 2022 as Russian forces massed on the border with Ukraine, and then to push back against Moscow after the full-scale invasion commenced on February 24, ought to have repaired some of the damage caused by the optics around the chaos in Kabul in 2021. Specific measures included the deployment of additional U.S. troops to Eastern Europe as well as the sharing of intelligence designed to deter Vladimir Putin from moving into Ukraine.[27] Qatar, which was accorded Major Non-NATO Ally Status by the Biden administration in January 2022, in part a recognition of its assistance to U.S. and international humanitarian efforts in Afghanistan during and after the withdrawal, also sought to play a balancing role in gas markets as Emir Tamim visited Biden in the White House and hosted Russian energy officials in Doha.[28] Europe’s pivot away from Russia restated the Gulf States’ centrality in global energy security considerations, while the rise in oil and gas prices in late-2011 and for most of 2022 also returned GCC states’ budgets to surplus after years of deficits following the oil price crash of 2014.[29] However, the ‘coming together’ effect noticeable in the U.S.-European (and NATO) response to Russia-Ukraine in 2022 did not appear to mollify strained relationships in the Gulf; if anything, the responses to the invasion made the different trajectories which had taken shape in prior years all the more visible. Like much of the Global South, the Gulf States did not take sides in the Russia-Ukraine war. Policymakers in GCC capitals did not share the view of their counterparts in Washington and Europe that the collective defence of Ukraine was ‘an international order defining event, a generational moment in which international alliances and norms are being reshaped’.[30] Regional leaders refused to get drawn into a new era of bloc rivalry and, unlike the Iraqi invasion of Kuwait in 1990, did not deem Russia’s aggression against Ukraine to pose a direct threat to their political or security interests, in common with counterparts across much of the ‘Global South’.[31] A variation in stances toward the February 2022 invasion and subsequent developments nevertheless fell along a spectrum that ranged from Qatar aligning most closely with Ukraine (and the U.S. position) and Saudi Arabia, Bahrain, and the UAE leaning more closely toward Russia, with Kuwait and Oman falling somewhat in-between. These variations in position mirrored those during the GCC rift between 2017 and 2020, and indicate that, for the Qatari leadership, the sight of a larger power threatening (and ultimately invading) a smaller neighbour carried resonance, so soon after the blockade era when Doha faced pressure from Saudi Arabia, Bahrain, and the UAE. However, while Qatari leaders announced a pause in new investments in Russia, existing links with Moscow remained unchanged, and the Qatar Investment Authority became the largest non-Russian shareholder in Rosneft after BP announced it would terminate its own relationship with the state-owned giant.[32] The UAE position was complicated by the fact that the country had just taken up a rotating two-year seat on the United Nations Security Council for 2022–23. This forced the UAE to take positions even if the Emirati choice was to abstain on two Security Council votes in February 2022 which condemned the Russian invasion and called for an emergency session of the United General Assembly – abstentions which caused considerable friction with the U.S.[33] Policy responses in and after 2022 reinforced perceptions of drift in relations between the U.S. and key Gulf partners. Both Mohammed bin Zayed in Abu Dhabi and Mohammed bin Salman in Riyadh spoke on several occasions with President Putin and appeared to rebuff entreaties by President Biden during the opening weeks of the war.[34] Positions taken on Russia-Ukraine in 2022 illustrated how tensions that built up over a period of years beforehand became manifest in the regional reactions. After the imposition of additional U.S., European Union, and British sanctions on Russian entities in 2022, the UAE (and Dubai in particular) emerged as a welcoming haven for Russian capital and business elites, several of whom appeared to obtain Emirati citizenship.[35] Many of the sanctioned Russian companies continued to do business with counterparts in the Gulf States with few evident consequences, creating gaps in the moves to isolate the Putin regime. In 2023, Mohammed bin Saleh Al-Sada, the former Minister of State for Energy in Qatar from 2011 to 2018, was elected Chairman of the Board of Rosneft, in a private capacity but demonstrative of the limited reach of Western appeals to reduce Gulf ties with sanctioned entities in Russia.[36] The case of oil prices illustrated how the Gulf States assertively put their own interests forward even if they were seen to clash with the interests of partners such as the U.S. There is nothing untoward about this, as states routinely pursue national interests based on a pragmatic calculation of internal and external interests. However, in the context of the emphasis placed by the Biden administration and its European allies on the defence of Ukraine in the name of an international rules-based order, the sight of their closest partners in the Middle East not joining with anything like the same strength of approach sent visible signals of policy divergence over Ukraine. European and American leaders, including Boris Johnson and Joe Biden, visited Saudi Arabia in the spring and summer of 2022 to make the case for an increase in Saudi (and OPEC/OPEC+) output in order to bring down oil prices which had surged.[37] Moreover, the acrimonious aftermath of President Biden’s visit to Jeddah and meeting with Mohammed bin Salman in July 2022, and the coordinated Saudi-Russian oil output cut in October 2022, demonstrated the divergence of interests, especially as officials in D.C. and Riyadh traded barbs over whether (or not) the Saudi decision to cut output, or the Biden administration’s request to increase production, were politically motivated.[38] Following the outbreak of the war in Gaza after the Hamas-led attacks on southern Israel on October 7, 2023, the legitimacy of aspects of the system of international order came under growing scrutiny by critics who contrasted U.S. responses to developments in Ukraine as opposed to Gaza. Images of Palestinian suffering caused anger across the Middle East as well as much of the Global South, including in the Gulf States, and made it politically difficult for officials to ignore, with the Saudi leadership, in particular, reassessing the terms of any normalization agreement with Israel.[39] Discrepancies in labelling acts committed by Russian and Israeli forces (in Ukraine and Gaza, respectively) as ‘war crimes’, and about whether to engage with the International Court of Justice and the International Criminal Court, brought accusations of double standards and hypocrisy, and weakened the credibility of the international order in the eyes of many in the non-Western world.[40] While Gaza did not prove a breaking-point in U.S.-Gulf relations, it did bring to the surface the different trajectories in security and defence interests and priorities. Statements by leaders in Gulf capitals hardened as the bombardment of Gaza continued, with even Mohammed bin Salman going as far as to condemn ‘the collective genocide committed by Israel against the brotherly Palestinian people’ at an Arab-Islamic Summit in Riyadh in November 2024.[41] These remarks came just 14 months after the Crown Prince told Fox News in September 2023 that ‘every day, we get closer’ to a Saudi-Israeli breakthrough that, he predicted, would be ‘the biggest historical deal since the end of the Cold War’.[42] Officials in Oman went further in the use of harsh language to condemn Israeli actions which at times bordered on tacit support for Hamas, and was reflective of and rooted in an upsurge of anger among Omani citizens, hitherto one of the most politically quiescent commentariats in the region.[43] Leaders in all GCC states had to acknowledge the domestic backlash against the destruction of Gaza, a balancing act made more delicate in Bahrain and the UAE, the two Gulf signatories to the Abraham Accords with Israel in 2020.[44] An additional consideration for policymakers in Riyadh, Abu Dhabi, Dubai, and Doha, in particular, was an interest in ‘de-risking’ potential regional volatility as focus turned to large-scale developmental, energy, and infrastructure projects, including those associated with Saudi Arabia’s Vision 2030.[45] ‘Nuts and Bolts’ of Evolving Security and Defence Relationships In the face of the political and geopolitical tensions noted above, U.S. security relationships and defence partnerships with the Gulf States have evolved. A decade of change since 2015 has illustrated that ties tend to work better on an ad hoc, case-by-case basis rather than as part of a grand strategic framework. An example of the latter was the launch of a U.S.-GCC Strategic Partnership in 2015, at a summit at Camp David between Gulf leaders (only two of whom attended) and President Obama, and the creation of five working groups to cover cooperation in counterterrorism, missile defence, military preparedness and training, critical defence capabilities, and cyber security.[46] Both the working groups and the strategic partnership fell into abeyance during the Trump administration, and were superseded by U.S. efforts to form a Middle East Strategic Alliance (MESA) with GCC states plus Egypt and Jordan. MESA failed to gain traction for a variety of reasons, including the intra-GCC rift over Qatar, a failure of parties to agree on the scope and scale of the issues to be covered by the initiative, and Egypt’s withdrawal in 2019.[47] The U.S.-GCC working groups reconvened in February 2023, nearly a year into the Russia-Ukraine war, for their first meeting in years, against the backdrop of the supply of Iranian armed drones to Russia and the provision of Russian defence assistance to Iran. The fact that Iranian weapons systems were being tested on the battlefield in Ukraine and in operational and combat settings against civilian and infrastructure targets highlighted how a secondary impact of the Russia-Ukraine war could impact on U.S.-GCC interests.[48] U.S. and Gulf States’ navies then participated in a major 18-day International Maritime Exercise in February and March 2023 co-led by Saudi Arabia, Bahrain, and the U.S. and directed from the Maritime Security Centre in Oman. Held under the auspices of the U.S. Naval Forces Central Command, more than 7000 personnel and 35 ships from over 50 countries and organizations took part in exercises in the Red Sea, the Gulf of Aden, the Arabian Sea, and the Gulf.[49] Perhaps uncoincidentally, Russia and China joined Iran in a joint naval exercise in the Gulf of Oman the same month, illustrating how, in the ‘nuts and bolts’ of security and defence relationships, the GCC still chose to side with the U.S.[50] A host of new initiatives since 2020 suggest that new security partnerships between the U.S. and individual Gulf States are evolving on bespoke bilateral and issue-specific lines. CENTCOM has worked closely with Saudi officials to develop the Red Sands Integrated Experimentation Centre as a regional testing facility in Saudi Arabia to boost cooperation against the shared threat from missile and drone attacks from Iran and regional proxies.[51] Joint exercises involving U.S. and Saudi forces have tested systems to destroy and disable unmanned aerial systems of the type that breached Saudi air defences during the ballistic missile and drone strikes on oil infrastructure facilities in September 2019.[52] U.S. officials also play an integral role in Saudi Arabia’s defence transformation plan with Department of Defense personnel assisting their Saudi counterparts with overhauling human-capital development, joint staff development, intelligence reorganization and force sustainment, and the development of a National Defence College. The U.S. role in capacity-building is a step up from the hitherto-largely scattered interventions tied to the foreign military sales process rather than in support of any deeper or underlying policy objective.[53] Another example of renewed U.S. commitment to security ties with a Gulf partner was the signing in September 2023 of a Comprehensive Security Integration and Prosperity Agreement (C-SIPA) with Bahrain. Announced during a visit to Washington, D.C. by Bahrain’s Crown Prince Salman bin Hamad Al Khalifa and described as ‘the most advanced formal security agreement the United States has with any country in the region’, C-SIPA will expand defence and security cooperation as well as trade and investment ties through collaborative measures across the security spectrum, albeit without a mutual defence guarantee.[54] Although many of the specific security-related initiatives are classified, C-SIPA may build upon the recent spate of U.S. strategic dialogues with Gulf partners, which began with Qatar in 2017 and now encompass every GCC state on a bilateral (rather than collective) basis. How C-SIPA unfolds will likely be studied carefully in other Gulf capitals, especially Riyadh and Abu Dhabi, which have long demanded enhanced U.S. defence guarantees, most recently in relation to any U.S.-brokered agreement to normalize with Israel (in the Saudi case) and in the desire for ‘codified’ U.S. security commitments (for the UAE).[55] Officials in the UAE have chosen a different approach which reflects the confidence of Emirati policymakers that the country is an influential ‘middle power’ capable of holding its own on an inter-regional and increasingly global stage. This was evident in the signing of the Abraham Accord with Israel in September 2020 in which the text of the agreement signed by the UAE was far more substantive than those signed by Morocco, Bahrain, and Sudan, and included reference to a ‘Strategic Agenda for the Middle East’ that was unique to the Emirati-Israeli accord.[56] The strategic and security-focused aspects of the UAE-Israel agreement enabled the normalization process to survive periodic frictions in the political relationship, as security and defence relations took centre-stage in the new initiatives and joint ventures announced by both parties, and neither the UAE nor Bahrain has withdrawn from the Accords although other states have not joined.[57] Both Israel and the UAE, as small states with significant hard power capabilities, have operationalized formal cooperation in the security and defence realm, including a first joint military exercise in the Red Sea in November 2021 which was coordinated by the U.S. Fifth Fleet (stationed in Bahrain), which ‘set a precedent for collective policing at sea to counter weapons-smuggling and threats posed by pirates and the Iranian navy’.[58] In February 2023, a venture between EDGE, an Emirati defence consortium and Israel Aerospace Industries unveiled their first jointly created unmanned naval vessel, for use in surveillance, reconnaissance, and mine detection, during the annual Naval Defence and Maritime Security Exhibition in Abu Dhabi.[59] Sharing of intelligence, reportedly concerning Hezbollah and the Houthi movement in Yemen, also took place, including in the aftermath of three missile and drone strikes on Abu Dhabi in January 2022.[60] Emirati policymakers have continued to engage with the U.S. and other regional and international partners in a series of more focused ‘mini-lateral’ fora, including the 12U2 (with India, Israel, and the U.S.), the Negev Forum (with the U.S. and other Arab states which have normalized relations with Israel), the Somalia Quint (with the U.S., the U.K., Qatar, and Turkey), and the Yemen Quartet (with the U.S., the U.K., and Saudi Arabia).[61] Such issue-based tie-ups outside formal institutions provide opportunities for middle powers such as the UAE to engage with specific partners and have become key elements in the UAE’s evolving approach to regional and foreign affairs, especially in Asia and the Indo-Pacific, areas of increasing focus both for the Gulf States (for economic and energy reasons) and the U.S. (connected to power competition and strategic rivalry with China).[62] How the U.S. and its partners in the Gulf balance (or fail to balance) the competing and sometimes diverging interests vis-à-vis China (and, to an extent, Russia) will go some way toward defining the next phase of political relationships that may still impinge on defence and security ties, as seen in the furore over a possible Chinese naval facility in Abu Dhabi that contributed in part to significant tensions in the bilateral U.S.-UAE relationship in 2021.[63] Shifting Toward a Transactional Approach It may be that the future of relationships between the U.S. and the Gulf States will be based around a set of transactional principles that do not commit or bind the parties to long-term arrangements and represent a more fluid approach to regional affairs. A stronger but narrower technocratic focus on shared areas of interest could help to insulate U.S.-Gulf relationships from the types of political pressures and uncertainties which have generated the perception of drift. However, ‘taking politics out’ of the equation may not be easy to do in practice and could add to layers of mutual misunderstandings or grievance, as with the U.S. pressure on the UAE over its relations with China and Russia, or on Saudi Arabia not to join the expanded BRICS + grouping in 2023 (which the UAE joined but the Saudis have yet to do).[64] Several developments since 2023 provide indications as to how a new configuration of interests could function in a genuinely multipolar landscape. The Saudi-Iran agreement in March 2023 to restore diplomatic relations, which was announced in (and by) China, could be a harbinger of what a more variegated relationship might look like, with greater flexibility to rethink and reorient interests and policies. The Beijing deal appeared to take U.S. officials by surprise, and came in the midst of Beltway speculation about the prospect of Saudi normalization with Israel rather than with Iran.[65] While Saudi and Iranian officials had engaged in multiple prior rounds of talks, beginning in 2021 and facilitated by Iraq and Oman, the decision to obtain Chinese endorsement of the deal was as symbolic as it was significant.[66] China has diplomatic relations with Teheran and Riyadh as well as energy and economic ties in both Iran and Saudi Arabia, and thus could play a balancing role in ways the U.S. simply cannot. Moreover, at a time of rising tension between Iran and the U.S. and Israel, the Chinese backing for the Saudi deal signalled the desire of Beijing and its two regional partners for diplomacy and not conflict.[67] As the Gulf has seen a regional de-escalation of tension since 2021, officials in Gulf States have leveraged what influence they have to contribute to security in different ways. These include mediation, whether in regional conflicts (by Oman and Qatar) or in aspects of the Russia-Ukraine war (by Saudi Arabia and the UAE). Oman’s Foreign Minister since 2020 has been Badr bin Hamad Albusaidi, for whom a characteristic of Omani foreign policy has long been that ‘we try to make use of our intermediate position between larger powers to reduce the potential for conflict in our neighbourhood’.[68] Omani officials have kept open indirect channels of dialogue between the U.S. and Iran and also between Saudi and Houthi officials as they continue to seek to reach agreement in Yemen.[69] Qatari mediators engaged intensively with U.S. and Egyptian counterparts to secure the release of hostages taken by Hamas in October 2023, in return for a pause in Israeli military operations in Gaza, and reached a fragile three-stage ceasefire agreement in January 2025, one day before the Biden administration gave way to the second Trump presidency.[70] The close Qatari-U.S. coordination over Gaza built upon the confidence in Qatari mediation abilities generated by their role in facilitating and supporting the U.S. withdrawal from Kabul in 2021.[71] Saudi and Emirati officials engaged differently as they sought to leverage their relationships both with the U.S. and Russia to facilitate prisoner exchanges and contribute to confidence-building measures to mitigate the impact of the war in Ukraine. The occasional releases of prisoners may only have amounted to pinpricks in the course of the most serious conflict in Europe since the Second World War, but they illustrate that, for all the political tensions over the Gulf States’ reluctance to be drawn into picking sides in any great power competition, the ability to maintain diverse contacts and balance different relationships is conducive to diplomatic initiatives in a polarized world. The subsequent Saudi centrality to the process of U.S.-Russian re-engagement in Trump’s second term illustrated the Kingdom’s desire to have a seat at the table and burnish its credibility as a diplomatic facilitator, possibly with potential future Iran-U.S. talks in mind, especially after Saudi and Emirati displeasure at being cut out of the JCPOA negotiations in 2015.[72] Attacks on maritime targets in the Red Sea by Houthi militants in Yemen have nevertheless highlighted the delicate balancing act facing Gulf States as the deadliest war between Israelis and Palestinians since 1948 threatens the rapprochement that had marked the conduct of regional politics across the Middle East prior to October 7, 2023. Memories of Houthi missile and drone attacks against Saudi cities and infrastructure targets (between 2015 and 2022) and against Abu Dhabi (in 2022) remain fresh. Especially as Vision 2030 passed its halfway point (having been launched by Mohammed bin Salman in 2016) and the ‘giga-projects’ along Saudi Arabia’s Red Sea coastline move into the construction and delivery phase, ‘de-risking’ has become a priority for the Saudi leadership as they seek to attract foreign investors and visitors.[73] Officials remain mindful of the optics that went around the world during the Saudi Arabian Grand Prix in March 2022 when the annual Formula One race in Jeddah took place against the backdrop of thick black smoke billowing from a nearby oil storage facility struck by the Houthis the day before.[74] Policy responses to the Houthi attacks in the Red Sea which began in November 2023 and triggered a multinational response in January 2024 indicated the careful balancing act at play in the Gulf, especially for Saudi Arabia, given the location of projects such as Neom on the Red Sea coastline. Bahrain was the only GCC state to be named as a participant in Operation Prosperity Guardian, the multi-country coalition which was formed in December 2023 to respond to the maritime attacks. However, Bahrain did not take part in the kinetic ship- and air-based operations and it was notable that the airstrikes against Houthi targets in Yemen did not involve U.S. or British forces based in the Gulf.[75] Instead, the strikes were launched from bases in Cyprus, the U.K., and the U.S., thereby minimizing the risks to the Gulf States from any blowback either from the Houthis or Iran. Operation Prosperity Guardian may therefore be a harbinger of a more flexible approach to U.S.-GCC relations in which security and defence cooperation continues on a technocratic basis even as there is greater elasticity, and, at times, degrees of divergence in (geo)political interests.[76] The return of Donald Trump to the Oval Office in January 2025, as the first president in 130 years to serve a non-consecutive second term, suggests that U.S. decision-making, in both domestic and foreign policy, will continue along highly transactional, unpredictable, and volatile lines. A move toward a ‘post-American’ order, regionally in the Middle East and in the structure of international politics, is likely to further reshape perceptions and policies. As the Gulf States are neither allies (in the formal sense) nor adversaries of the United States, they occupy a middle ground which may shield them from swings in U.S. policymaking toward these categories of states. It is probable that the assertion of Gulf States’ interests in engaging with Iran, as well as with China and Russia will deepen the divergence of trajectories with the U.S. and increase the likelihood that ties will reframe around a looser and more transactional-based approach. The Gaza war may not have led to a rupture with the U.S., or with Israel, but, coming in parallel with the war in Ukraine, it has intensified the repositioning of the Gulf States in a rapidly changing system of international power. Declaration of Conflicting Interests The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article. Funding The author received no financial support for the research, authorship, and/or publication of this article. Footnotes 1. References in this paper to the Russian invasion of Ukraine refer to the full-scale invasion which was launched by Russian forces on February 24, 2022, rather than the invasion and subsequent Russian occupation of areas of eastern Ukraine and the Crimea in 2014. 2. David Kilcullen and Greg Mills, The Ledger: Accounting for Failure in Afghanistan (London: Hurst & Co., 2021), 222–24; Marc Lynch, The Arab Uprising: The Unfinished Revolutions of the New Middle East (New York: Public Affairs, 2012), 94. 3. Tobias Borck, Seeking Stability Amidst Disorder: The Foreign Policies of Saudi Arabia, the UAE and Qatar, 2010–20 (London: Hurst & Co., 2023), 193. 4. Huw Dylan and Thomas Maguire, ‘Secret Intelligence and Public Diplomacy in the Ukraine War’, Survival 64/4 (September 2022), 34. 5. John Raine, ‘Ukraine versus Gaza’, Survival, 66/1 (February/March 2024), 173–74. 6. Ben Hubbard, ‘Iranian Official Heads to Saudi Arabia as Israel Postpones U.S. Meeting’, New York Times, October 9, 2024. 7. Dania Thafer and David Des Roches, The Arms Trade, Military Services and the Security Market in the Gulf States: Trends and Implications (Berlin: Gerlach Press, 2016), 1–7. 8. Bilal Saab, ‘After Hub-and-Spoke: US Hegemony in a New Gulf Security Order’, Atlantic CouncilReport, 2016, 4 9. Tobias Borck, Seeking Stability Amidst Disorder: The Foreign Policies of Saudi Arabia, the UAE andQatar, 2010-20 (Oxford: Oxford University Press, 2023), 18; Khalifa Al-Suwaidi, The UAE After theArab Spring: Strategy for Survival (London: I.B. Tauris, 2023), 120. 10. Kristian Coates Ulrichsen, Insecure Gulf: The End of Certainty and the Transition to the Post-Oil Era(London: Hurst & Co., 2011), 40. 11. Katherine Harvey, A Self-Fulfilling Prophecy: The Saudi Struggle for Iraq (London: Hurst & Co., 2021),144–45. 12. David Roberts, Security Politics in the Gulf Monarchies: Continuity amid Change (New York: ColumbiaUniversity Press, 2023), 158. 13. Fawaz Gerges, Obama and the Middle East: The End of America’s Moment? (New York: PalgraveMacmillan, 2012), 166–67. 14. William Burns, The Back Channel: American Diplomacy in a Disordered World (London: Hurst & Co.,2019), 361–62; Marc Lynch, The New Arab Wars: Uprisings and Anarchy in the Middle East (New York:Public Affairs, 2016), 226–28. 15. Thomas Juneau, ‘Iran’s Policy Towards the Houthis in Yemen: A Limited Return on a Modest In-vestment’, International Affairs 92/3 (May 2016), 658. 16. Jeffrey Goldberg, ‘The Obama Doctrine’, The Atlantic, March 10, 2016; Turki al-Faisal Al Saud, ‘Mr.Obama, We Are Not ‘Free Riders’, Arab News, March 14, 2016. 17. Mehran Kamrava, Troubled Waters: Insecurity in the Persian Gulf (Ithaca: Cornell University Press,2018), 71. 18. Kristian Coates Ulrichsen, Qatar and the Gulf Crisis (London: Hurst & Co., 2020), 77–78. 19. By contrast, the Trump administration did respond on two occasions when U.S. assets were targeted, firstin June 2019 after a U.S. drone was shot down over the Gulf and then in December 2019 after anAmerican contractor was killed in a missile strike on a base in Iraq. 20. Steve Holland and Rania El Gamal, ‘Trump Says He Does Not Want War After Attack on Saudi OilFacilities’, Reuters, September 16, 2019. 21. David Roberts, ‘For Decades, Gulf Leaders Counted on U.S. Protection. Here’s What Changed’,Washington Post, January 30, 2020. 22. Tamara Abueish, ‘Saudi Arabia’s Vice Defense Minister Discusses De-escalation with Esper’, AlArabiya English, January 7, 2020. 23. Anon., ‘Biden Raises Yemen, Human Rights in Call with Saudi King Salman’, Al Jazeera, February 25, 2021. 24. Emile Hokayem, ‘Fraught Relations: Saudi Ambitions and American Anger’, Survival 64/6 (November 2023), 9. 25. David Deudney and John Ikenberry, ‘Misplaced Restraint: The Quincy Coalition Versus Liberal Internationalism’, Survival, 63(4), 2021, 9; Alexander Hertel-Fernandez, Theda Skocpol, and Jason Sclar,‘When Political Mega-Donors Join Forces: How the Koch Network and the Democracy Alliance In-fluence Organized US Politics on the Right and Left’, Studies in American Political Development, 32(2),2018, 128. 26. Marika Theros, ‘Knowledge, Power and the Failure of US Peacemaking in Afghanistan 2018–21’,International Affairs, 99(3), 2023, 1249–50. 27. Trine Flockhart, ‘NATO in the Multi-Order World’, International Affairs 100/2 (March 2024), 473. 28. David Ottaway, ‘U.S. Calls for Help – Again – From the Tiny Arab Emirate of Qatar’, Wilson Center,February 2, 2022. 29. Li-Chen Sim, ‘The Gulf States: Beneficiaries of the Russia-Europe Energy War?’, Middle East Institute,January 12, 2023. 30. Marc Lynch, ‘Saudi Oil Cuts and American International Order’, Abu Aardvark’s MENA Academy(Substack), October 9, 2022. 31. Chris Alden, ‘The Global South and Russia’s Invasion of Ukraine’, LSE Public Policy Review, 3(1),2023, 2–4. 32. Hazar Kilani, ‘Qatar Investment Authority Holding Onto its Russian Assets for Now’, Doha News,March 2, 2022. 33. Kristian Coates Ulrichsen, ‘The GCC and the Russia-Ukraine Crisis’, Arab Center Washington, March 22, 2022. 34. Dion Nissenbaum, Stephen Kalin, and David Cloud, ‘Saudi, Emirati Leaders Decline Calls withPresident Biden during Ukraine Crisis’, Wall St Journal, March 8, 2022. 35. Natalia Savelyeva, ‘Understanding the Russian Exodus to Dubai Following the Ukraine Invasion’, TheRussia Program, George Washington University, May 8, 2024. 36. Anon., ‘Rosneft Elects Qatari Ex-Minister as New Chairman’, Energy Intelligence, July 5, 2023. 37. Mark Colchester, Summer Said, and Stephen Kalin, ‘Boris Johnson Visits U.A.E., Saudi Arabia, SeekingMore Oil’, Wall St Journal, March 16, 2022. 38. Alex Marquardt, Natasha Bertrand, and Phil Mattingly, ‘Inside the White House’s Failed Effort toDissuade OPEC from Cutting Oil Production to Avoid a “Total Disaster”’, CNN, October 5, 2022;Anders Hagstrom, ‘Saudis Say Biden Admin Requested Oil Production Cut to Come After Midterms’,Fox News, October 13, 2022. 39. Elham Fakhro, The Abraham Accords: The Gulf States, Israel, and the Limits of Normalization (NewYork: Columbia University Press, 2024), 220. 40. Stacie Goddard, ‘Legitimation and Hypocrisy in Gaza: Implications for the LIO’, in Marc Lynch (ed.),Debating American Primacy in the Middle East, POMEPS Studies 54, 2024, 47. 41. Mostafa Salem, ‘Saudi Crown Prince Accuses Israel of Committing “Collective Genocide” in Gaza’,CNN, November 13, 2024. 42. Peter Aitken, ‘Bret Baier Interviews Saudi Prince: Israel Peace, 9/11 Ties, Iran Nuke Fears’, Fox News,September 20, 2023. 43. Giorgio Cafiero, ‘Gaza War Undermines Oman’s Role as Bridge in a Conflict-Ridden Middle East’,Stimson Commentary, August 26, 2024. 44. Dania Thafer, ‘Palestinian Statehood Tops GCC Security Agenda as Diplomatic Struggles Persist’,Middle East Council on Global Affairs, October 7, 2024. 45. Kristian Coates Ulrichsen, ‘Saudi Plans to “De-Risk” Region Have Taken a Hit with Gaza Violence – butHitting Pause on Normalization with Israel Will Buy Kingdom Time’, The Conversation, October 18, 2023. 46. Anon., ‘Fact Sheet: Implementation of the U.S.-Gulf Cooperation Council Strategic Partnership’, TheWhite House, Office of the Press Secretary, April 21, 2016. 47. Kristian Coates Ulrichsen, ‘What Next for the Middle East Strategic Alliance?’, Arab Digest, October 29, 2020. 48. 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Vakil and Quilliam, ‘The Abraham Accords and Israel-UAE Normalization: Shaping a New MiddleEast’, (March 2023), 29. 59. Anon., ‘UAE, Israel Unveil Joint Naval Vessel as Military Ties Grow’, AFP, February 20, 2023. 60. Jean-Loup Samaan, ‘The Shift That Wasn’t: Misreading the UAE’s New “Zero-Problem” Policy’,Carnegie Endowment for International Peace, Sada blog, February 8, 2022. 61. Nickolay Mladenov, ‘Minilateralism: A Concept That is Changing the World Order’, The WashingtonInstitute for Near East Policy, April 14, 2023. 62. Husain Haqqani and Narayanappa Janardhan, ‘The Minilateral Era’, Foreign Policy, January 10, 2023. 63. Gordon Lubold and Warren Strobel, ‘Secret Chinese Port in Persian Gulf Rattles U.S. Relations withU.A.E.’, Wall Street Journal, November 19, 2021; Warren Strobel, ‘U.A.E. Shut Down China FacilityUnder U.S. Pressure, Emirates Says’, Wall Street Journal, December 9, 2021; John Hudson, EllenNakashima, and Liz Sly, ‘Buildup Resumed at Suspected Chinese Military Site in UAE, Leak Says’,Washington Post, April 26, 2023. 64. Sam Fleming, Henry Foy, Felicia Schwartz, James Politi, and Simeon Kerr, ‘West Presses UAE to ClampDown on Suspected Russia Sanctions Busting’, Financial Times, March 1, 2023. 65. Dion Nissenbaum, Dov Lieber, and Stephen Kalin, ‘Saudi Arabia Seeks Pledges, Nuclear Help for Peacewith Israel’, Wall Street Journal, March 9, 2023; Michael Crowley, Vivian Nereim, and Patrick Kingsley,‘Saudi Arabia Offers its Price to Normalize Relations with Israel’, New York Times, March 9, 2023. 66. Anon., ‘Great Expectations: The Future of Iranian-Saudi D´etente’, International Crisis Group, June13, 2024. 67. Amrita Jash, ‘Saudi-Iran Deal: A Test Case of China’s Role as an International Mediator’, GeorgetownJournal of International Affairs, June 23, 2023. 68. Badr bin Hamad Al Bu Said, ‘“Small States” Diplomacy in the Age of Globalization: An OmaniPerspective’, in Gerd Nonneman (ed.), Analyzing Middle East Foreign Policies and the Relationshipwith Europe (London: Routledge, 2005), 258. 69. Giorgio Cafiero, ‘Oman Keeps Trying to Dial Down Tensions in the Middle East’, Stimson Centre,February 2, 2024. 70. Samy Magdy, Adam Geller, and Aamer Madhani, ‘To Secure Gaza Ceasefire, Dealmakers OvercameEnemies’ Deep Distrust’, Associated Press, January 22, 2025. 71. Mirdef Alqashouti, ‘Qatar Mediation: From Soft Diplomacy to Foreign Policy’, in Mahjoob Zweiri andFarah Al Qawasmi (eds.), Contemporary Qatar: Examining State and Society (Singapore: Springer,2023), 73. 72. Diana Galeeva, ‘Saudi Arabia as a Global Mediator: From the Ukraine to Gaza War’, Menara Magazine,March 24, 2025. 73. 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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Israel’s conflict with Iran represents far more than another Middle Eastern crisis – it marks the emergence of a dangerous new chapter in nuclear rivalries that has the potential to reshape global proliferation risks for decades to come. What began with Israeli strikes on Iranian nuclear facilities and other targets on June 13, 2025 has now spiraled into the world’s first full-scale example of what I as an expert in nuclear security call a “threshold war” – a new and terrifying form of conflict where a nuclear weapons power seeks to use force to prevent an enemy on the verge of nuclearization from making that jump. As missiles continue to rain down on both Tehran and Tel Aviv – with hundreds dead in Iran and at least 24 killed in Israel – the international community is witnessing the collapse of traditional deterrence frameworks in real time. Unlike traditional nuclear rivalries where both sides possess declared arsenals – like India and Pakistan, who despite their tensions operate under mutual deterrence – this new threshold dynamic creates an inherently unstable escalation spiral. Iran increasingly believes it cannot deter Israeli aggression without nuclear weapons, yet every step toward acquiring them invites more aggressive Israeli strikes. Israel, for its part, cannot permanently eliminate Iran’s nuclear knowledge through military means – it can only delay it through means that would seemingly guarantee future Iranian determination to acquire the ultimate deterrent. Under this dynamic, neither side can step back without accepting an intolerable outcome: for Israel, an Iran more determined than even in becoming a nuclear weapons nation capable of deterring Israeli action and ending its regional military dominance; for Iran, the risk of regime change through devastating Israeli strikes. The consequences of this deadly logic extend far beyond the Middle East. The preventive strike precedent The stakes could not be higher, as Iranian officials have called the attack “a declaration of war” and vowed that destroyed nuclear facilities “would be rebuilt.” Israel, meanwhile has warned its campaign will continue “for as many days as it takes.” Most ominously, the scheduled nuclear talks between the U.S. and Iran were called off, with Tehran dismissing any such dialogue as “meaningless.” This may suggest diplomacy’s window – which opened for just a few months under Trump’s second administration, after being closed during his first – was deliberately slammed shut. More broadly, the Israeli strikes mark a dangerous evolution in international norms around preventive warfare. While Israeli officials called this a “preemptive strike,” the legal and strategic reality is different. Preemptive strikes respond to imminent threats – like Israel’s 1967 Six-Day War against Arab armies preparing to attack. Preventive strikes, by contrast, target distant future threats when conditions seem favorable – like Japan’s attack on Pearl Harbor in 1941. Israel justified its action by claiming Iran could rapidly assemble up to 15 nuclear bombs. Yet, as the International Atomic Energy Agency director, Rafael Grossi, warned beforehand, an Israeli strike could solidify rather than deter Iran’s nuclear ambitions, potentially prompting withdrawal from the Nuclear Non-Proliferation Treaty. True to that warning, on June 16, Iran announced it was preparing a parliamentary bill that would see the country leave the 1968 treaty. Israel’s calculations in opting to strike build on the same erosion of international legal frameworks that has legitimized preemptive warfare since the United States’ military action in Afghanistan and Iraq after the Sept. 11, 2001 attack. America’s “war on terror” fundamentally challenged sovereignty norms through practices like drone strikes and preemptive attacks. More recently, operations in Gaza and elsewhere have demonstrated that violations of international humanitarian law carry limited consequences in practice. For Israel, this permissive environment has seemingly created both opportunity and justification regarding striking Iran – something that Prime Minister Benjamin Netanyahu has been pursuing for decades. Already, Russia’s attacks on Ukraine’s Zaporizhzhia nuclear plant demonstrated nuclear facilities’ vulnerability in modern warfare. I believe Israel’s actions further risk normalizing attacks on nuclear infrastructure, potentially legitimizing similar preventive actions by India, China or the U.S. against emerging nuclear programs elsewhere. From strikes to regional conflagration Israel’s initial strike quickly triggered inevitable escalation. Iran’s retaliation came in waves: first hundreds of drones and missiles on June 13, then sustained barrages throughout the following days. By the morning of June 15, both countries were trading strikes on energy infrastructure, military bases and civilian areas, with no immediate end in sight. The Houthis in Yemen have since joined the fight, by launching ballistic missiles at Tel Aviv. Notably absent are Hezbollah, Hamas and Iran’s Iraqi militias – all significantly damaged by recent action by Israel. This degradation of Iran’s “axis of resistance” – its traditional forward deterrent – fundamentally alters Tehran’s strategic calculations. Without strong proxies to threaten retaliation, Iran is more exposed to Israeli strikes, making nuclear weapons seem like the only reliable deterrent against future attacks. The escalation pattern illustrates what can happen when when a government casts aggression as prevention. Having initiated the recent escalation of hostilities, Israel now faces the consequences. Iranian President Masoud Pezeshkian’s vow that destroyed facilities “would be rebuilt” underscores that Israeli action designed to prevent nuclearization may instead result in Iran pursuing it with renewed determination. The commitment trap This creates what strategists call the “commitment trap” – a dynamic where both sides face escalating costs but cannot back down. Israel faces its own strategic dilemma. The strikes may ultimately accelerate rather than prevent Iranian nuclearization, yet backing down would mean accepting a nuclear Iran. Netanyahu’s promise that current strikes are “nothing compared to what they will feel in coming days” shows how quickly strikes sold as preventative escalate toward total war. Unlike established nuclear powers that can negotiate from positions of strength, threshold states, such as Iran, face a stark choice: remain vulnerable to preventive strikes and regime change or race toward the protection that nuclear deterrence provides. North Korea offers the clearest example of this dynamic. Despite decades of sanctions and military threats, Pyongyang’s nuclear program has made it essentially immune to preventive strikes. Iranian leaders understand this lesson well – the question is whether they can reach the same protected status before suffering decisive preventive action. Traditional nuclear deterrence theory assumes rational actors operating under mutual vulnerability. But threshold wars break these assumptions in fundamental ways. Iran cannot fully deter Israeli action because it lacks confirmed weapons, while Israel cannot rely on deterrence to prevent Iranian weaponization because Iran’s nuclear program continues advancing. This creates “use it or lose it” dynamics: Israel faces shrinking windows to act preventively as Iran approaches weaponization; Iran faces incentives to accelerate its program before suffering additional strikes. The absence of effective external mediation compounds these risks. U.S. President Donald Trump’s response to the strikes reveals this dynamic starkly. Initially opposing military action and preferring diplomacy to “bombing the hell out of” Iran, Trump pivoted dramatically after the strikes began, and warned that “there’s more to come. A lot more.” His post on Truth Social – “Two months ago I gave Iran a 60-day ultimatum to ‘make a deal.’ They should have done it!” – demonstrates how quickly diplomatic efforts can collapse once threshold wars begin. Global implication The international response reveals how thoroughly Israel’s Operation Rising Lion has normalized aggression against nuclear facilities. While European leaders called for “maximum restraint,” none condemned Israel’s initial attacks. Russia and China condemned the attacks but took no concrete action. The U.N. Security Council produced only statements of “concern” about “escalation.” This normalization sets what I believe to be a catastrophic precedent. The threshold war model threatens to unravel decades of nuclear governance based on deterrence rather than preemption. Indeed, the Iran-Israel threshold war sets dangerous precedents for other regional nuclear competitions. Successful preventive strikes could incentivize similar actions elsewhere, eroding diplomatic nonproliferation efforts. Conversely, rapid nuclearization by Iran could encourage other threshold states, like Saudi Arabia, to pursue nuclear capabilities swiftly and secretly. When preventive strikes become the enforcement mechanism for nonproliferation norms, the entire architecture of nuclear governance begins to crumble. Without these frameworks, the world faces an unstable future defined by cycles of preventive strikes and accelerated nuclear proliferation – far more dangerous than the Cold War-era standoffs that shaped nuclear governance.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском As Israel’s devastating war in Gaza has ground on, the two-state solution to the Israeli-Palestinian conflict was thought to be “dead”. Now, it is showing signs of life again. French President Emmanuel Macron is reportedly pressing other European nations to jointly recognise a Palestinian state at a UN conference in mid-June, focused on achieving a two-state solution. Macron called such recognition a “political necessity”. Countries outside Europe are feeling the pressure, too. Australia has reaffirmed its view that recognition of Palestine should be a “way of building momentum towards a two-state solution”. During Macron’s visit to Indonesia in late May, Indonesian President Prabowo Subianto made a surprising pledge to recognise Israel if it allowed for a Palestinian state. Indonesia is one of about 28 nations that don’t currently recognise Israel. France, Australia, the United States, United Kingdom, Canada, Germany, Italy, Japan and South Korea are among the approximately 46 nations that don’t recognise a Palestinian state.   The UN conference on June 17–20, co-sponsored by France and Saudi Arabia, wants to go “beyond reaffirming principles” and “achieve concrete results” towards a two-state solution. Most countries, including the US, have supported the two-state solution in principle for decades. However, the political will from all parties has faded in recent years. So, why is the policy gaining traction again now? And does it have a greater chance of success? What is the two-state solution? Put simply, the two-state solution is a proposed peace plan that would create a sovereign Palestinian state alongside the Israeli state. There have been several failed attempts to enact the policy over recent decades, the most famous of which was the Oslo Accords in the early 1990s. In recent years, the two-state solution was looking less likely by the day. The Trump administration’s decision in 2017 to recognise Jerusalem as the capital of Israel and move the US embassy there signalled the US was moving away from its role as mediator. Then, several Arab states agreed to normalise relations with Israel in the the Abraham Accords, without Israeli promises to move towards a two-state solution. The Hamas attacks on Israel – and subsequent Israeli war on Gaza – have had a somewhat contradictory effect on the overarching debate. On the one hand, the brutality of Hamas’ actions substantially set back the legitimacy of the Palestinian self-determination movement in some quarters on the world stage. On the other, it’s also become clear the status quo – the continued Israeli occupation of Gaza and the West Bank following the end of a brutal war – is not tenable for either Israeli security or Palestinian human rights. And the breakdown of the most recent ceasefire between Israel and Hamas, the return of heavy Israeli ground operations in May and reports of mass Palestinian starvation have only served to further isolate the Israeli government in the eyes of its peers. Once-steadfast supporters of Israel’s actions have become increasingly frustrated by a lack of clear strategic goals in Gaza. And many now seem prepared to ignore Israeli wishes and pursue Palestinian recognition. For these governments, the hope is recognition of a Palestinian state would rebuild political will – both globally and in the Middle East – towards a two-state solution. Huge obstacles remain But how likely is this in reality? There is certainly more political will than there was before, but also several important roadblocks. First and foremost is the war in Gaza. It’s obvious this will need to end, with both sides agreeing to an enduring ceasefire. Beyond that, the political authority in both Gaza and Israel remains an issue. The countries now considering Palestinian recognition, such France and Australia, have expressly said Hamas cannot play any role in governing a future Palestinian state. Though anti-Hamas sentiment is becoming more vocal among residents in Gaza, Hamas has been violently cracking down on this dissent and is attempting to consolidate its power. However, polling shows the popularity of Fatah – the party leading the Palestinian National Authority – is even lower than Hamas at an average of 21%. Less than half of Gazans support the enclave returning to Palestinian Authority control. This means a future Palestinian state would likely require new leadership. There is almost no political will in Israel for a two-state solution, either. Prime Minister Benjamin Netanyahu has not been shy about his opposition to a Palestinian state. His cabinet members have mostly been on the same page. This has also been reflected in policy action. In early May, the Israeli Security Cabinet approved a plan for Israel to indefinitely occupy parts of Gaza. The government also just approved its largest expansion of settlements in the West Bank in decades. These settlements remain a major problem for a two-state solution. The total population of Israeli settlers is more than 700,000 in both East Jerusalem and the West Bank. And it’s been increasing at a faster rate since the election of the right-wing, pro-settler Netanyahu government in 2022. Settlement is enshrined in Israeli Basic Law, with the state defining it as “national value” and actively encouraging its “establishment and consolidation”. The more settlement that occurs, the more complicated the boundaries of a future Palestinian state become. Then there’s the problem of public support. Recent polling shows neither Israelis nor Palestinians view the two-state solution favourably. Just 40% of Palestinians support it, while only 26% of Israelis believe a Palestinian state can “coexist peacefully” alongside Israel. However, none of these challenges makes the policy impossible. The unpopularity of the two-state solution locally is more a reflection of previous failures than it is of future negotiations. A power-sharing agreement in Northern Ireland was similarly unpopular in the 1990s, but peace was achieved through bold political leadership involving the US and European Union. In other words, we won’t know what’s possible until negotiations begin. Red lines will need to be drawn and compromises made. It’s not clear what effect growing external pressure will have, but the international community does appear to be reaching a political tipping point on the two-state solution. Momentum could start building again.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском AbstractPurpose The purpose of this paper is to analyse the international political economy of Korea and its effects due to geopolitical tension between China and the USA. Design/methodology/approach Economic war between China and the USA has prolonged longer than expected. Aftermath of the COVID-19 pandemic, reforming the supply chain has been the centre of economic tension between China and the USA. Quite recently, with the rapid expansion of Chinese e-commerce platforms, distribution channels come upon a new economic tension between the two. And now is the time to pivot its pattern of conflict from competition into cooperation. In this end, economic diplomacy could be a useful means to give a signal of cooperation. From the view of economic diplomacy, this paper tries to analyse the projected transition of economic war between China and the USA with its implication on the trade policy of Korea. Findings As an implementation of economic diplomacy, China suggested the Belt and Road Initiative (BRI), enhancing trade logistics among related countries to gain competitiveness. In 2023, the Biden administration suggested the India-Middle East and Europe Economic Corridor as a counter to BRI, which will be a threshold for changing trade policy from economic war into economic diplomacy. As a result, it is expected China and the USA will expand their economic diplomacy in a way to promote economic cooperation among allied states, while the distribution channel war would continue to accelerate the economic tension between China and the USA. Korea has to prepare for and provide measures handling this geopolitical location in its trade policy or economic diplomacy. Originality/value This research contributes to the awareness and understanding of trade environments from the perspective of economic diplomacy. 1. Introduction The advent of globalisation has led to widespread economic integration, creating global production networks and markets. However, the COVID-19 pandemic has acted as a significant setback to this trend. In the wake of COVID-19, an economic war has arisen between China and the USA, centred on the restructuring of global supply chains following widespread disruptions. International political economy (IPE) examines the power dynamics between states and the structures of influence within regional economies. Consequently, economic diplomacy has gained unprecedented attention. Economic diplomacy focuses on government actions regarding international economic issues, distinct from political diplomacy through its market-oriented approach in foreign policy. Putnam (1988) categorises economic diplomacy into two levels: unilateralism and bilateralism. Unilateral economic diplomacy (or unilateralism) often relies on hard power, involving decisions on trade liberalisation or market protection without negotiation. Bilateral economic diplomacy (or bilateralism) or multilateral economic diplomacy (or multilateralism), by contrast, involves negotiation among trade partners, resulting in agreements such as regional or global free trade agreements (FTAs). A vast range of state or non-state actors engage in economic diplomacy, navigating the complex interplay between international and domestic factors. Defining economic diplomacy is extremely challenging, but one useful definition is “the broad concept of economic statecraft, where economic measures are taken in the pursuit of political goals, including punitive actions such as sanctions” (Blanchard and Ripsman, 2008).  Figure 1 Recent trend of economic diplomacy To exert influence internationally, ministers and heads of government strive to demonstrate their capacity for national security through two primary approaches, as shown in Figure 1 (above): economic war (or competition) and economic diplomacy (or international cooperation). In the context of global supply chain restructuring, the economic conflict between China and the USA has intensified, marked by threats of supply chain disruptions. This has led to emerging strategies aimed at “crowding out” the USA from global supply chains (去美戰略) or excluding China through alliances such as the Allied Supply Chain and Chip 4. While economic war is inherently “temporary” due to its painstaking nature, economic diplomacy or international cooperation offer a more “long-term” approach because it is gains-taking. This paper analyses the factors contributing to the prolonged nature of this economic war and explores potential outcomes of the supply chain tensions between China and the USA from the perspectives of IPE or geo-economics. In conclusion, it highlights the importance of preparing for trade policy adjustments and strategic economic diplomacy. 2. International trade war and strategic items2.1 Supply chain The supply chain encompasses a network of interconnected suppliers involved in each stage of production, from raw materials and components to the finished goods or services. This network can include vendors, warehouses, retailers, freight stations and distribution centres. Effective supply chain management is a “crucial process because an optimised supply chain results in lower costs and a more efficient production cycle” [1]. Within the supply chain, a leading company typically holds governance power, enabling it to coordinate scheduling and exercise control across the interconnected suppliers, resulting in reduced costs and shorter production times (Gereffi et al., 2005) [2]. Since the 2000s, forward and backward integration have been key strategies for managing time, cost and uncertainty in supply chains. For example, Toyota’s Just-In-Time (JIT) system demonstrated the efficiency of locally concentrated supply chains until disruptions from the 2011 East Japan Earthquake and the Thailand flood. Following supply chain shutdowns in 2020, many businesses shifted from local to global supply chains, utilising advancements of the information technology (IT) and transportation technologies to geographically diversify operations. As the need for a systematically functioning global supply chain has grown, a leading nation, much like a leading company, often assumes governance power in international trade and investment, as illustrated in Figure 2 (below), by aligning with the leadership of a dominant market competitiveness, which makes this leadership valuable.  Figure 2 Supply chain The COVID-19 pandemic dealt a severe blow to the global supply chain, causing sudden lockdowns that led to widespread supply chain disruptions. To mitigate the risks of future global disruptions, supply chains have begun restructuring to operate on a more regionally segmented basis. In this shift toward regional supply chains, China and the USA are at the centre, drawing allied countries within their spheres of influence. This alignment helps explain why the economic war between China and the USA has lasted longer than anticipated. 2.2 Strategic items China has restricted exports of two rare metals, gallium and germanium, which are critical to semiconductor production. Kraljic (1983) highlighted the importance of managing “strategic items” within the framework of supply chain management, as shown in Figure 3. Kraljic emphasises the need to strengthen and diversify critical items. The Kraljic matrix provides a valuable tool for identifying essential items that require focused management within the supply chain.  Figure 3 Kraljic matrix Kraljic identified the importance of managing “bottleneck items” in strategic supply chain management – items that present high supply risk but have relatively low business value. Due to the potential costs associated with non-delivery or compromised quality of strategic items, these must be closely monitored and controlled. From a risk management perspective, establishing medium-term business relationships and collaboration with suppliers is essential. For example, South Korea imports over 90% of its urea for agricultural and industrial purposes from China [3]. Heavily dependent on China for urea supplies due to pricing factors, Korea faced challenges when China imposed export controls on urea, underscoring Korea’s vulnerability within China’s sphere of influence. The European Union (EU) also faces challenges with critical raw materials (CRMs). China remains the EU’s sole supplier of processed rare earth elements, while Chile supplies 79% of its lithium. In response, the EU introduced the CRM Act (CRMA) to support projects aimed at increasing “the EU’s capacity to extract, process, and recycle strategic raw materials and diversify supplies from the third countries” [4]. 2.3 Resilient supply chain alliance In contrast to China’s approach of leveraging supply disruptions to strengthen its influence, the Biden administration in the USA has adopted a cooperative approach focused on building resilient supply chains (Pillar 2) through the Indo-Pacific Economic Framework (IPEF), which includes 14 member countries [5]. The need for resilient supply chains has been further underscored by the Russia–Ukraine crisis. The IPEF aims to address supply chain vulnerabilities by fostering global efforts to reduce risks associated with concentrated, fragile supply chains [6].  Figure 4 Resilient supply chain alliance In Figure 4, the EU Commission presented the Single Market Emergency Instrument (SMEI) in September 2022, a crisis governance framework designed to ensure the availability of essential goods and services during future emergencies. The SMEI operates on three levels: contingency planning, vigilance and emergency. The contingency planning phase focuses on collaboration among member states to mitigate supply chain disruption and monitor incidents. The vigilance phase can be activated when a significant disruption is anticipated, enabling specific measures such as mapping and monitoring supply chains and production capacities. Finally, the emergency phase is activated in cases of severe disruption to the functioning of the single market [7]. Establishing a resilient supply chain through international cooperation may be appealing, yet the reality often falls short of the ambition. In South Korea, the IPEF took effect on 17 April 2024, after an extended negotiation process, marking the first multilateral agreement on supply chains. As a result, during non-crisis periods, the 14 member countries will collaborate to strengthen international trade, investment and trade logistics. In times of crisis, member countries will activate a “crisis response network”. Conversely, opportunities for negotiation with China, South Korea’s largest trading partner, are essential for building supply chain resilience [8]. China has pursued an industrial policy focused on enhancing its supply chain management capabilities. In the semiconductor sector, the decoupling between China and the USA has become increasingly evident. Contrary to expectations, China has adopted a policy of internalising its supply chains, returning to the integration strategies of the 2000s rather than furthering globalisation. A promising opportunity for transformation between the two countries has emerged recently. Since 2015, China and South Korea have maintained bilateral FTA, and with the second phase of FTA negotiations currently underway, there is an opportunity to strengthen trade and investment ties, fostering positive progress through international cooperation. 2.4 China manufacturing exodus During the COVID-19 pandemic, China imposed sudden lockdowns without prior notice or preparation, halting production and logistics cycles. This “zero COVID” policy may have triggered a shift towards “de-risking” China from supply chain disruptions. Although China still offers significant advantages as “the factory of the world,” with vast market potential, prolonged trade tensions with the USA, intensified during the Trump administration, have prompted global manufacturers with substantial USA market bases to relocate operations amid rising geopolitical uncertainties. For example, Nike and Adidas have shifted much of their footwear manufacturing to Vietnam, Apple has begun iPhone production at a Foxconn in Chennai, India, and AstraZeneca has contracted production with India’s Serum Institute. In the pre-globalised era, defining the Rule of Origin (ROO) was straightforward, as a product’s components were usually manufactured and assembled within a single country. However, with the complexity of global supply chains, particularly since 2012, determining ROO has become a time-consuming and subjective process. ROO are classified as either non-preferential or preferential. The USA applies non-preferential ROO to restrict imports from countries like Cuba, Iran and North Korea, while offering trade preference programmes for others. Preferential ROO are used to determine duty-free eligibility for imports from approved countries [9], whereas non-preferential ROO play a crucial role in “country of origin labelling, government procurement, enforcement of trade remedy actions, compilation of trade statistics, supply chain security issues.” [10] China manufacturing exodus may negatively impact capital inflows into Hong Kong, traditionally seen as the Gateway to China. In 2023, Hong Kong’s initial public offering volume fell to a 20-year low of $5.9bn [11]. While China-oriented business remains in Hong Kong, which returns fully to Chinese control in 2047, non-China-oriented businesses have migrated to Singapore. As the certainty of contract and ownership rights forms the foundation of capitalism, this capital flight from Hong Kong is likely to persist. 3. Trade logistics and economic corridors Globalisation has allowed supply chains to leverage interdependence and interconnectedness, maximising efficiency. However, while these efficiencies have been beneficial, they have also created a fertile ground for friction between trade partners due to a “survival of the fittest” mindset and the principle of “winner takes all.” This interdependence has also highlighted vulnerabilities; the global supply chain struggled to manage the disruptions caused by COVID-19, prompting a shift towards regional integration initiatives, such as Association of Southeast Asian Nations, Regional Comprehensive Economic Partnership, United States–Mexico–Canada Agreement and Comprehensive and Progressive Agreement for Trans-Pacific Partnership. As the global economy seeks stability, collaboration over competition has become increasingly essential, with economic diplomacy emerging as a priority. The prolonged economic war between China and the USA arguably needs to shift towards economic diplomacy. The global supply chain is restructuring into regional supply chains, building resilience by operating in regional segments that can withstand crises. Michael Porter introduced the concept of value chain as “a set of activities that a firm performs to deliver a valuable product or service to the market.” [12] Complex finished goods often depend on global value chains, traversing multiple countries. As shown in Figure 5, the value chain consists of supply chain and trade channel components. While the focus has traditionally been on which country holds lead status within a regional supply chain, the emphasis is now shifting to how these regional segments can be interconnected and relayed. In this context, the supply chain competition may evolve into a “channel war” in international trade, where trade logistics will centre on the internal flow of goods, standardising channel processes and establishing authority over these channels.  Figure 5 Supply chain v. trade channel 3.1 Trade logistics It is natural for governments to seek environments that enhance competitiveness within in their countries. In terms of trade, effective trade logistics are essential for maintaining competitive advantage. As a prerequisite, a strong IT management infrastructure is indispensable. As shown in Figure 6, trade logistics encompass the internal flow of goods to market, integrating physical infrastructure with operating software – such as transport hubs, warehouses, highways, ports, terminals, trains and shipping vessels. Key areas of conflict in trade logistics involve the standardisation of channel processes and determining who holds governance over operation of these logistics systems. This is equally relevant within the digital economy. Recently, Chinese e-commerce – often referred to as C-commerce – has aggressively sought to gain control over digital distribution channels, interconnected delivery networks and trade logistics via digital platforms. Chinese platforms such as Taobao, Temu and AliExpress are actively working to increase their monthly active users (MAUs), positing themselves as counterweights to USA-based platforms such as Amazon and eBay in digital trade [13].  Figure 6 Trade logistics When the agenda of establishing international trade logistics is introduced to relevant trade members across various countries, initial progress and effective responses are often achieved. However, efforts soon encounter obstacles related to standardising logistics processes and establishing operational governance. Greater reliance on international institutions could help resolve these issues (Bayne, 2017). Yet governments frequently prioritise domestic interests, and after prolonged negotiations, the risk of international agreements failing increases. Amid the economic war between China and the USA, China launched a trade logistics initiative known as the Belt and Road Initiative (BRI), or One Belt One Road, in 2013. Often referred to as the New Silk Road, the BRI aims to establish economic corridors for trade logistics. The World Bank estimates that the BRI could boost trade flows by 4.1% and reduce trade costs by 1.1% [14]. In response, the Biden administration proposed the India-Middle East and Europe Economic Corridor (IMEC) in September 2023 to strengthen transport and communication links between Europe and Asia as a countermeasure to China’s BRI. IMEC has been well received by participating countries, with expectations of fostering economic growth, enhancing connectivity and potentially rebalancing trade and economic relations between the EU and China [15]. Both BRI and IMEC are ambitious projects aimed at boosting international trade through substantial investments in trade logistics infrastructure. Each seeks to assert governance over international trade channels, signalling that the supply chain war may soon evolve into a trade channel war between China and the USA. 3.2 Economic corridors Economic corridors are transport networks designed to support and facilitate the movement of goods, services, people and information. These corridors often include integrated infrastructure, such as highways, railways and ports, linking cities or even countries (Octaviano and Trishia, 2014). They are typically established to connect manufacturing hubs, high-supply and high-demand areas, and producers of value-added goods. Economic corridors comprise both hard infrastructure – such as trade facilities – and soft infrastructure, including trade facilitation and capacity-building measures. The Asian Development Bank introduced the term “economic corridor” in 1998 to describe networks connecting various economic agents within a region [16]. Economic corridors are integrated trade logistics networks, providing essential infrastructure for connecting regional segments of supply chains. As supply chains increasingly operate in regional “chunks,” linking these segments becomes ever more important. Economic corridors typically include a network of transport infrastructure, such as highways, railways, terminals and ports. Initiatives like the BRI and IMEC use economic corridors as instruments of economic diplomacy, shifting strategies from hard power to soft power, as shown in Figure 7. Because less-developed or developing countries often lack sufficient funding to invest in trade logistics, they tend to welcome these initiatives from developed countries, which offer international collaboration and support. However, these initiatives usually come with the condition that participating countries must accept standardised trade processes and governance led by the sponsoring developed country.  Figure 7 Economic corridor initiatives as economic diplomacy To succeed, economic corridors must meet three key conditions [17]. First, government intervention is essential, as economic corridor initiatives primarily involve public infrastructure investments beyond the scope of the private sector. In realising these projects, governments must reconcile three tensions to ensure their policies are mutually supportive: tensions between politics and economics, between international and domestic pressures and between governments and other stakeholders. Second, intermediate outcomes should be measured and demonstrated as results of economic corridors, allowing participants to experience tangible benefits throughout these longer-term projects. Finally, economic corridors should deliver broader benefits. Participants need incentives to utilise the infrastructure sustainably. These benefits may extend beyond economic welfare, such as wages and income, to include social inclusion, equity and environmental gains, which support the long-term viability of the infrastructure. 4. BRI vs IMEC4.1 Belt and Road Initiative (BRI) - Silk Road The BRI can be a modern-day realisation of the Silk Road concept, connecting Europe as a market base with China as a production base. Unlike the ancient Silk Road, which connected trade routes across Eurasia, the BRI poses potential challenges due to its extensive connectivity. Firstly, there are social and environmental externalities, such as increased congestion and accidents from concentrating traffic flows through limited links and nodes within trade networks. Secondly, while the connectivity may benefit the production and market bases at either end, regions situated between these hubs, through which highways and railways pass, may gain minimal advantage. Thirdly, there is often a mismatch between where costs and benefits are realised. Transit regions that facilitate network traffic often see fewer direct benefits compared to high-density nodes within the network. 4.2 India-Middle East and Europe Economic Corridor (IMEC) - The Spice Road The ancient Spice Roads once connected the Middle East and Northeast Africa with Europe, facilitating the exchange of goods such as cinnamon, ginger, pepper and cassia, which, like silk, served as a form of currency. The IMEC proposes a modern route from India to Europe through the United Arab Emirates (UAE), Saudi Arabia, Israel and Greece. Since its announcement in September 2023, some regional experts have expressed reservations about its feasibility, particularly regarding the connection between the Middle East and Israel. The project has faced delays due to the Israel–Hamas war. Despite these challenges, IMEC holds potential to drive economic growth and strengthen connectivity, especially as countries like Vietnam and India emerge as alternative manufacturing bases for companies relocating from China. For Saudi Arabia and the UAE, IMEC is not viewed as a challenge to China but rather as an opportunity to diversify their economies and solidify their roles within the Middle East region [18]. 5. Conclusion A new trade war between China and the USA has begun, with the Biden Administration’s introduction of IMEC as a counter to China’s BRI. This shift could soon transform the nature of economic war from a focus on supply chains to one on trade channels. The China manufacturing exodus was further accelerated by supply disruptions during the COVID-19 pandemic. Amidst the economic tensions between China and the USA, the restructuring of global supply chains into regional networks has made significant progress. With China maintaining its stance on export controls for strategic items, South Korea must prepare for resilient supply chain management. In relation to China–Korea FTA, which is currently undergoing its second phase of negotiation, South Korea should seek clarity on the transparency of China’s strategic item controls. The Committee on Foreign Investment in the United States (CFIUS) plays a key role in monitoring the quality of inbound investments; similarly, South Korea is experiencing increased inbound investment due to the manufacturing shift from China and should apply similar standards to evaluate investment quality. This emerging economic war between China and the USA is now marked by the competing initiatives of the BRI and IMEC. The BRI can be viewed as a modern Silk Road, linking China with Europe, while the IMEC seeks to establish a trade logistics corridor connecting Saudi Arabia, the UAE, Israel and Greece. The South Korean Government should take proactive steps to prepare for the evolving dynamics of the trade war between China and the USA. CitationOh, J.S. (2025), "International trade war - Spice Road against Silk Road", International Trade, Politics and Development, Vol. 9 No. 1, pp. 2-11. https://doi.org/10.1108/ITPD-06-2024-0031  Notes 1. https://www.investopedia.com/terms/s/supplychain.asp2. According to Gary Gereffi et al, 5 governance types of a lead company could be categorised as market, modular, relational, captive and hierarchy.3. Korea imports urea from 12 countries including Qatar, Vietnam, Indonesia and Saudi Arabia, in addition to China.4. https://single-market-economy.ec.europa.eu/sectors/raw-materials/areas-specific-interest/critical-raw-materials/strategic-projects-under-crma_en5. IPEF was launched on May 23,2022 at Tokyo. 14 member countries are Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and the USA. 4 Pillar of IPEF are Trade (Pillar 1), Supply Chain (Pillar 2),Clean Economy (Pillar 3) and Fair Economy (Pillar 4).6. Critics say “lack of substantive actions and binding commitments, instead focusing on process-driven framework building.” https://www.piie.com/blogs/realtime-economics/its-time-ipef-countries-take-action-supply-chain-resilience7. https://ec.europa.eu/commission/presscorner/detail/en/ip_22_54438. As of 2023, the first-largest trade partner of Korea is China (Trade volume of $267.66bn), the second is the US ($186.96bn) and the third is Vietnam ($79.43bn)9. As preferential ROO contain the labour value content requirement in the USMCA, it could increase compliance costs for importers. https://crsreports.congress.gov/product/pdf/RL/RL3452410. USITC(1996), Country of Origin Marking: Review of Laws, Regulations and Practices, USITC Publication 2975, July, pp. 2–411. https://www.barrons.com/articles/hong-kong-financial-center-china-46ba5d3612. Porter identifies a value chain broken in five primary activities: inbound logistics, operations, outbound logistics, marketing and sales and post-sale services. https://www.usitc.gov/publications/332/journals/concepts_approaches_in_gvc_research_final_april_18.pdf13. MAU is a metric commonly used to identify the number of unique users who engage with apps and website. MAU is an important measurement to the level of platform competitiveness in the digital trade logistics or e-commerce industry.14. https://home.kpmg/xx/en/home/insights/2019/12/china-belt-and-road-initiative-and-the-global-chemical-industry.html15. https://www.bradley.com/insights/publications/2023/10/the-india-middle-east-europe-economic-corridor-prospects-and-challenges-for-us-businesses16. The Asian Development Bank (ADB), which first used the term in 1998, defines economic corridors as important networks or connections between economic agents along a defined geography, which link the supply and demand sides of markets. http://research.bworldonline.com/popular-economics/story.php?id=350&title=Economic-corridors-boost-markets,-living-conditions17. Legovini et al. (2020) comments traditional cross border agreements of transport investment focuses only on a narrow set of direct benefits and cost. However, economic corridors can entail much wider economic benefits and costs such as trade and economic activity, structural change, poverty reduction, pollution and deforestation.18. Arab Centre Washington D.C. https://arabcenterdc.org/resource/the-geopolitics-of-the-india-middle-east-europe-economic-corridor/ References Bayne, N. (2017), Challenge and Response in the New Economic Diplomacy, 4th ed., The New Economic Diplomacy, Routledge, London, p. 19.Blanchard, J.M.F. and Ripsman, N.M. (2008), “A political theory of economic statecraft”, Foreign Policy Analysis, Vol. 4, pp. 371-398, doi: 10.1111/j.1743-8594.2008.00076.x.Gereffi, G., Humphrey, J. and Sturgeon, T. (2005), “The governance of value chain”, Review of International Political Economy, Vol. 12 No. 1, pp. 78-104, doi: 10.1080/09692290500049805.Kraljic, P. (1983), “Purchasing must be supply management”, Harvard Business Review, Vol. 61 No. 5, September.Legovini, A., Duhaut, A. and Bougna, T. (2020), “Economic corridors-transforming the growth potential of transport investments”, p. 10.Octaviano, B.Y. and Trishia, P. (2014), Economic Corridors Boost Markets, Living Conditions, Business World Research, Islamabad, October.United States International Trade Commission (USITC) (1996), “Country of origin marking: Review of Laws, Regulations, and Practices”, USITC Publication, Vol. 2975, July, pp. 2-4.Further readingPorter, M. (1985), Competitive Advantage: Creating and Sustaining Superior Performance, Free Press.Putman, R.D. (1988), “Diplomacy and domestic politics; the logic of two-level games”, International Organization, Vol. 42 No. 4, pp. 427-600.USITC (2019), “Global value chain analysis: concepts and approaches”, Journal of International Commerce and Economics, April, pp. 1-29.

I. Introduction Since October 7, 2023, when the Hamas attacked Israel, the Gaza war has entered its third year. Palestinians continue to endure an unprecedented level of violence, trauma, economic hardship, and uncertainty. The war has resulted in a staggering number of casualties and widespread displacement, in addition to massive destruction of physical assets in Gaza, significant reduction of economic output, increased violence in the West Bank, and widespread collapse of basic service provision across the entire Palestinian territories.  As of May 7, 2025, according to Wikipedia and Gaza’s Ministry of Health, 55000 fatalities (53,253 Palestinians and 1,706 Israelis) and more than 110,00 injuries have been reported in Gaza. More than half of the casualties are women, children, and the elderly. An estimated 1.9 million people, approximately 90 percent of Gaza’s population, are currently internally displaced. Seventy percent of Gaza’s Road network, more than 80 per cent of commercial facilities, and close to 90 percent of housing units in Gaza have either severely damaged or have been destroyed.  Since October 7, 2023, the UN has documented over 1,500 clashes between Israeli settlers and Palestinians in the West Bank, resulting in property damage, casualties, and displacement. Over 1,600 Palestinians, half of whom are children, have been displaced due to increased settlers’ violence and access restrictions. Additionally, existing fiscal constraints and growing security concerns have disrupted service provision in the West Bank.  On the macroeconomic front, the Gaza and West Bank face a collapse, which is unmatched in recent memory. The Palestine economy has faced significant contraction, evidenced by a reduced production, sharp decline in gross domestic product (GDP), and soaring unemployment rates. On the other hand, the Gaza war has had significant negative impacts on Israel. The economic and financial costs of war consist of the direct cost of military operations as well as the indirect losses that extend over the medium and long term. One of the most direct costs of the Gaza war was the recall of about 300,000 reservists in the early days, which meant that the Israeli government would bear the cost of conscription, and the Israeli economy would bear loss of output due to their absence from the workforce.Given these situations, this paper analyzes the economic effects of the Gaza war on Palestine and Israel. II. Literature on the Effects of Wars Wars have the potential to alter the parties and “transform the future” of belligerents (Ikle 1991) and they also bring about fundamental changes to the international system (Gilpin 1981).  Scholars in Economics have provided considerable analysis of the macroeconomic effects of a conflict across spatial levels: locally, nationally, regionally, and internationally. Some studies have examined the effects of specific wars such as the Syrian civil war (Kešeljević and Spruk, 2023) or the Iraq war (Bilmes and Stiglitz 2006). For example, an analysis estimated that the Russian invasion of Ukraine had an economic cost of 1% of global GDP in 2022 (Liadze et al. 2023) Others have examined the effects of war in general. For instance, Reuven Glick and Alan Taylor (2010) examine bilateral trade relations from 1870 to 1997 and find large and persistent negative impacts of wars on trade and hence on national and global economic welfare. Similarly, Vally Koubi (2005) investigates the effects of inter- and intrastate wars on a sample of countries and finds that the combined prewar, contemporaneous, and postwar effects on economic growth are negative.  A “war ruin” school emphasized that the destruction caused by wars is accompanied by higher inflation, unproductive resource spending on the military, and war debt (Chan 1985; Russett 1970). By contrast, a “war renewal” school argued that there can be longer-term positive economic effects from war because war can lead to increased efficiency in the economy by reducing the power of rent-seeking special interests, triggering technological innovation, and advancing human capital (Organski and Kugler 1980).  III. Economic Effects of the Gaza War1. Casualties  As Table 1 shows, since the Hamas attacked Israel on October 7, 2023, 55,000 people (as of May 7, 2025, 53,253 Palestinians and 1,706 Israelis) have been killed in the Gaza war according to the Gaza Health Ministry. Scholars have estimated that 80% of Palestinians killed are civilians. A study by OHCHR (The Office of the United Nations High Commissioner for Human Rights) found that 70% of the Palestinians killed in residential buildings or similar housing were children and women.  The majority of casualties have been found in the Gaza Strip. The Gaza Health Ministry’s total casualty count is the number of deaths directly caused by the war.  The 7 October attacks of the Hamas on Israel killed 1,195 people, including 815 civilians. A further 806 Palestinians have been killed in the occupied West Bank (including East Jerusalem).  2. Economic Effects of the Gaza War on Palestine  As Figure 1-1 shows, since October 7, 2023, Palestine’s economy has significantly contracted as a result of continued warfare. As Figure 1-2 shows, economic downturn started from the fourth quarter of 2023. In 2024, Palestine's GDP contracted by 27% compared to the previous year. The decline was driven by a 27% drop in industrial output in the Gaza Strip due to the ongoing Israeli occupation and attack. Especially, economic contractions were recorded in construction (-14.5%), services (-11.0%), financial and insurance activities (-5.3%), information and communication (-3.2%). However, Palestine’s economy began to recover in the fourth quarter of 2024, although it still marked a negative growth.   Figure 1-1: Palestine economic growth rate  Figure 1-2: Palestine economic growth (quarterly) As Figure 2 shows, industrial production in Palestine significantly decreased in 2024 as war has continued between Israel and Hamas. Industrial production in Palestine has been low, averaging -7.62 percent from 2012 until 2025. However, it reached a record low of -29.77 percent in June of 2024. Then industrial production in Palestine increased to 2.1 percent in March of 2025 over the same month in the previous year.   Figure 2: Industrial production in Palestine As Figure 3 shows, inflation rate in Palestine has significantly increased in 2023 and 2024, reaching all time high of 88.93 percent in November of 2024. High inflation resulted from resource shortages as a result of continued warfare and significant production decline. And then inflation rate in Palestine dropped to 1.88 percent in March and -2.51 percent in February of 2025. Inflation rate in Palestine averaged 4.95 percent from 1998 until 2025.   Figure 3: Inflation rate in Palestine As Figure 4-1 shows, unemployment rate in Palestine significantly increased after October 7, 2023, as economy continued to shrink and industrial production fell. Unemployment rate in Palestine increased to 35.20 percent in the first quarter of 2024 from 24.1 percent in the third quarter of 2023. It then dropped to 31.1 percent in the second quarter of 2024 and 28.8 percent in the fourth quarter of 2024. Unemployment Rate in Palestine has been remarkably high, averaging 24.07 percent from 1995 until 2024, reaching an all-time high of 35.60 percent in the third quarter of 2002 and a record low of 8.80 percent in the second quarter of 2000.    Figure 4-1: Unemployment rate in Palestine As Figure 4-2 shows, youth unemployment rate in Palestine increased from 38.40 percent in the first quarter of 2023 to 45.70 percent in the first quarter of 2024 and then slightly dropped to 42.60 percent in the third quarter of 2024 and 38.6 percent in the fourth quarter of 2024. Youth unemployment rate in Palestine has been remarkably high, averaging 41.85 percent from 2009 until 2024, reaching an all-time high of 49.90 percent in the second quarter of 2018 and a record low of 32.90 percent in the first quarter of 2011.   Figure 4-2: Youth unemployment rate in Palestine As Figure 4-3 shows, full-time employment in Palestine plunged to 628000 persons in the first quarter of 2024 from 1143800 persons in the third quarter of 2023. Then it increased to 705700 persons in the fourth quarter of 2024. Full-time employment in Palestine averaged 888133 persons from 2010 until 2024, reaching an all-time high of 1143800 persons in the third quarter of 2023 and a record low of 67900 persons in the first quarter of 2010.   Figure 4-3: Full-time employment in Palestine Despite the continued warfare in Gaza, as Figure 5 shows, exports in Palestine did not significantly decrease. On the contrary, exports in Palestine increased from 148.3 USD Million in August 2023 to 164.20 USD Million in December of 2024. Exports in Palestine averaged 68.15 USD Million from 2001 until 2025, reaching an all-time high of 164.20 USD Million in December of 2024 and a record low of 15.92 USD Million in April of 2002. Exports in Palestine maintained pre-war level in 2025, recording 140.70 USD Million in January of 2025. Top exports of Palestine in 2023 were scrap iron ($68.6M), tropical fruits ($53.8M), pure olive oil ($10.9M), and building stone ($7.56M).  Figure 5: Exports in Palestine Figure 6 shows, imports in Palestine significantly dropped in 2024 as warfare continued in Gaza. Imports in Palestine decreased to 420.30 USD Million in April 2024 from 747.20 USD Million in August 2023. Imports in Palestine averaged 370.00 USD Million from 2001 until 2025, reaching an all-time high of 750.60 USD Million in November of 2022 and a record low of 82.71 USD Million in April of 2002. According to media reports, there are severe food shortages in Gaza, but there is no information about the imports of food after 2023.   Figure 6: Imports in Palestine As Figure 7 shows, since October 7, 2023, government spending in Palestine has significantly declined in 2023 and early 2024, hitting a record low of 461.20 USD million in the first quarter of 2024. And then government spending in Palestine increased to 666.70 USD million in the fourth quarter of 2024 from 616.50 USD million in the third quarter of 2024. Government spending in Palestine averaged 797.95 USD million from 2011 until 2024, reaching an all-time high of 974.90 USD million in the fourth quarter of 2016 and a record low of 461.20 USD million in the first quarter of 2024.   Figure 7: Government spending in Palestine 3. Economic Effects of the Gaza War on Israel  As Figure 8 shows, since October 7, 2023, when the Hamas attacked Israel, government spending in Israel significantly increased as Israel government conducted massive military operations against the Hamas. Government spending in Israel increased from 84100 ILS (Israel new shekel) Million in the third quarter of 2023 to 97973 ILS Million in the fourth quarter of 2023 and 97018 ILS Million in the fourth quarter of 2024. Government Spending in Israel averaged 58676 ILS Million from 1995 until 2024, reaching an all-time high of 97973 ILS Million in the fourth quarter of 2023 and a record low of 39524 ILS Million in the third quarter of 1995.   Figure 8: Government spending in Israel As Figure 9 shows, as Israel government conducted massive military operations against the Hamas, military expenditure in Israel increased to 46505.30 USD Million in 2024 from 27498.50 USD Million in 2023. Military expenditure in Israel averaged 7742.87 USD Million from 1951 until 2024, reaching an all-time high of 46505.30 USD Million in 2024 and a record low of 57.60 USD Million in 1954.   Figure 9: Military expenditure in Israel As Figure 10 shows, Israel recorded a government budget deficit of -33793.00 ILS Million in December of 2023 from 14100 ILS Million in January 2023 because government spending, in particular military expenditure significantly increased. Government budget value in Israel averaged -3405.71 ILS Million from 2005 until 2025, reaching an all-time high of 22839.00 ILS Million in January of 2025 and a record low of -33793.00 ILS Million in December of 2023.   Figure 10: Budget Balance in Israel As Figure 11-1 & 11-2 show, Israel's economic growth plunged to -4.32 percent in the fourth quarter of 2023 from 3.44% in the third quarter of 2023. Israel experienced consecutive negative growth until the third quarter of 2024 as the ongoing conflict with the Hamas had taken a significant toll on economic activity. This marked the weakest growth since 2020, when the covid-19 pandemic severely impacted the economy. However, the Gross Domestic Product (GDP) in Israel expanded 5.46 percent in the fourth quarter of 2024 over the same quarter of the previous year. GDP annual growth rate in Israel averaged 3.73 percent from 1996 until 2024, reaching an all-time high of 16.27 percent in the second quarter of 2021 and a record low of -8.37 percent in the second quarter of 2020.  Figure 11-1: Israel's economic growth rate  Figure 11-2: Israel's GDP growth (quarterly) As Figure 12 shows, industrial production in Israel decreased 7.4 percent in December of 2023 and 9.8 percent in March 2024 and then increased 15.9 percent in December 2024. Industrial production in Israel averaged 5.66 percent from 1960 until 2025, reaching an all-time high of 62.70 percent in June of 1968 and a record low of -29.20 percent in June of 1967.   Figure 12: Industrial production in Israel As Figure 13 shows, unemployment rate in Israel decreased from 4.30 percent in January 2023 to 2.80 percent in November 2023 and 2.60 percent in December 2024. This decline seems to result from the fact that Israeli government called up tens of thousands of reservists to replace conscripts and active-duty soldiers. And then unemployment rate in Israel slightly increased to 2.9% in March 2025. Unemployment rate in Israel averaged 5.89 percent from 1992 until 2025, reaching an all-time high of 11.40 percent in March of 1992 and a record low of 2.60 percent in August & December of 2024.  Figure 13: Unemployment Rate in Israel As Figure 14 shows, the number of unemployed persons in Israel decreased to 119200 in December of 2024 from 184000 in January 2023. Unemployed persons in Israel averaged 192800 from 1991 until 2025, reaching an all-time high of 305400 in September of 2003 and a record low of 119200 in December of 2024.  Figure 14: The number of unemployed persons in Israel As Figure 15 shows, after October 2023, exports in Israel fluctuated between 4470 USD Million in October 2023, 5330 USD Million in March 2024, 4320 USD Million June 2024 and 5250 USD million in December 2024. Exports in Israel averaged 1836.30 USD Million from 1959 until 2025, reaching an all-time high of 6276.70 USD Million in March of 2022 and a record low of 10.80 USD Million in July of 1959.   Figure 15: Exports in Israel As Figure 16 shows, imports in Israel fluctuated between 8090 USD Million in August 2023, 7590 USD Million in December 2023, 7010 USD Million in August 2024, and 8318.70 USD Million in March 2025. Imports in Israel averaged 2500.72 USD Million from 1959 until 2025, reaching an all-time high of 10372.30 USD Million in May of 2022 and a record low of 33.10 USD Million in November of 1959.   Figure 16: Imports in Israel As Figure 17 shows, inflation rate in Israel decreased from 5.40 percent in January 2023 to 3.70 percent in October 2023 and 2.50 percent in February 2024. It then increased to 3.60 percent in August 2024 and 3.80 percent in January 2025. Inflation rate in Israel averaged 26.75 percent from 1952 until 2025, reaching an all-time high of 486.20 percent in November of 1984 and a record low of -2.70 percent in March of 2004.   Figure 17: Inflation rate in Israel As Figure 18 shows, despite on-going warfare in Gaza, gasoline price in Israel did not rise significantly. It increased from 1.82 USD/Liter in September 2023 to 1.98 and 2.14 USD/Liter in January and May 2024, respectively and then dropped to 2.06 and 2.04 USD/Liter in August 2024 and February 2025, respectively. Gasoline prices in Israel averaged 1.78 USD/Liter from 1995 until 2025, reaching an all-time high of 2.30 USD/Liter in June of 2022 and a record low of 0.73 USD/Liter in December of 1995.   Figure 18: Gasoline price in Israel IV. Conclusion The Gaza war has had negative impacts on both Palestine and Israel, but the negative effects were much bigger in Palestine than in Israel. The number of casualties was much higher in Palestine. Especially the war brought down Palestine economy, lowering economic growth, reducing industrial productions, and increasing inflation & unemployment in Palestine. The Israeli economy has also slowed down, and budget deficit increased. However, unemployment went down, and inflation has been stable between 2 and 5 percent. Trade has maintained a pre-war level, although there have been some difficulties. References Bilmes, Linda, and Joseph E. Stiglitz. 2006. The Economic Costs of the Iraq War: An Appraisal Three Years After the Beginning of the Conflict. Cambridge, MA: National Bureau of Economic Research. Chan, Steve. 1985. “The Impact of Defense Spending on Economic Performance: A Survey of Evidence and Problems.” Orbis 29 (2): 403–434.CIA Factbook. 2024. “Ukraine.”Gilpin, Robert. 1981. War and Change in World Politics. New York: Cambridge University Press.  Glick, Rouven and Alan Taylor. 2010. “Collateral Damage: Trade Disruption and the Economic Impact of War.” The Review of Economics and Statistics 92(1): 102-127.Iklé, Fred C. 1991. Every War Must End. New York: Columbia University Press.Kešeljević, Aleksandar, and Rok Spruk. 2023. Estimating the Effects of Syrian Civil War. Empirical Economics.  Koumi, Valley. 2005. “War and Economic Performance.” Journal of Peace Research 42 (1): 67-82. Liadze, Iana, Corrado Macchiarelli, Paul Mortimer-Lee, and Patricia Sanchez Juanino. 2023. “Economic Costs of the Russia-Ukraine War.” The World Economy 46: 874–886.Organski, A. F. K., and Jacek Kugler. 1980. The War Ledger. Chicago: University of Chicago Press. Russett, Bruce. 1970. What Price Vigilance? The Burdens of National Defense. New Haven: Yale University Press.