Gulf countries are facing mounting pressure to cut ties with Iran as Washington intensifies its effort to economically isolate Tehran through tougher sanctions.
Although it remains unclear how aggressively the U.S. will target China, the largest international buyer of Iranian oil, the plan announced by Treasury Secretary Scott Bessent on Monday is likely to draw Gulf states more deeply into the conflict and jeopardize significant commercial ties.
The United Arab Emirates, one of the United States’ closest regional allies and a key commercial gateway for Iran, had already moved to suspend trade and financial dealings with Tehran days before the new announcement.
Anwar Gargash, diplomatic adviser to the UAE president, said Iranian attacks on Gulf states, including his, had backfired by increasing its isolation.
Other Gulf Cooperation Council states, however, have shown greater reticence, highlighting the difficulty they face in calculating the potential effects on their security and trading relationships, as well as access to the region’s key energy artery, the Strait of Hormuz.
Companies in the Gulf that benefit from the Iranian market will now have to weigh that business with the risks of losing access to the U.S. dollar, the world’s dominant reserve currency.
Political consultant with Khuzaie Associates, Ahmed Al-Khazaei said that transactions with Iran could mean companies lose access to the international banking system.
The Treasury Department said its campaign targets networks operating through the UAE, China, Hong Kong, Singapore, Switzerland, Europe and elsewhere.
Washington accuses these networks of helping transport Iranian oil and channeling its revenues to the Islamic Revolutionary Guard Corps and its Quds Force, both designated by the United States as terrorist organizations, as well as to other entities within the Iranian government.
The new sanctions list also includes shipping companies registered in Dubai and Ajman and individuals based in the UAE, placing Gulf commercial centers directly under pressure to strengthen scrutiny and enforcement.
Bessent said each country would be given a specific period to shut down Iran-related activities identified by Washington.
Qais Al-Astah, a writer and journalist, cautioned that Washington’s ability to use economic pressure to change Iran’s policies remains uncertain, noting that decades of sanctions have failed to alter Tehran’s behavior.
Gulf economies, however, may have less room to maneuver. Because they depend on access to global financial institutions, Gulf companies and banks would find it difficult to risk those relationships in order to maintain business with Iran, Al-Astah told MBN.
Saudi Arabia, Qatar, Oman, Kuwait and Bahrain have not publicly endorsed the new sanctions, and the GCC has not issued a statement.
Abdullah Baabood, who writes on international relations, said the UAE decision to halt trade with Tehran cannot be explained solely as a response to U.S. pressure.
Iranian missile attacks and threats to shipping and UAE vessels have altered Abu Dhabi’s calculations, making continued engagement with Tehran a matter of security risk assessment rather than commercial returns alone, he said.
But the decision to cut off trade with Iran could still sting. The two countries have sought in recent years to expand economic ties despite political differences. In 2024, their joint economic commission met for the first time in 10 years to discuss trade, investment and logistics corridors.
World Trade Organization data show that about 30% of Iran’s imports, worth roughly $21 billion, come from the UAE. About 13% of Iran’s exports, valued at an estimated $7 billion, are destined for the UAE market.
Oman’s political and commercial ties with Tehran, along with its role as a mediator in the current conflict, mean political observers are paying particular attention to how it responds to Washington’s sanctions.
Bilateral trade between Oman and Iran reached about 512 million Omani rials, or roughly $1.33 billion, in 2024, a 52% increase from the previous year. A preferential trade agreement Muscat and Tehran signed in May 2025 was expected to further increase commerce between the two.
Baabood said he expects Omani leaders to comply with Washington demands to limit trade in sensitive sectors while also trying to maintain political dialogue with Tehran. The degree of flexibility acceptable to Washington may ultimately determine Oman’s actions, he said.
Muscat is therefore unlikely to openly confront Washington or seek to circumvent the sanctions regime, but it will not easily abandon its political and diplomatic channels with Iran, he said.
Saudi Arabia may find it easier to comply with Washington’s direction. The country restored diplomatic relations with Iran in 2023, but trade and investment remain limited. Saudi Arabia’s large economy and alternative oil routes give Riyadh more room to maneuver if access to the Strait of Hormuz remains limited. Baabood thinks, nevertheless, that Saudi leaders are likely to try to keep political channels open with Tehran
Qatar shares a gas field and maintains political channels with Iran, but their trade and financial ties are smaller than those between Tehran and Muscat.
In response to Monday’s announcement from Washington, the Qatari Foreign Ministry spokesman offered only a brief, noncommittal comment Tuesday, describing the new U.S. sanctions on Iran as “unilateral” and saying Doha supports mediation efforts to resolve the crisis.
Kuwait’s trade ties with Iran are also limited and shaped by security and political considerations. Bahrain meanwhile is a close ally of the U.S. and is unlikely to go against Washington.
The Treasury Department calls its plan an “economic isolation campaign” to cut off “Iran’s financial lifeline.” It targets Iran’s “shadow fleet” and oil-smuggling networks, including intermediaries, shipping companies, financial facilitators and vessels involved in transporting Iranian crude and petroleum products.
Iranian Economy Minister Ali Madani-Zadeh said his country is prepared for sanctions and that Iran’s response would not remain defensive. An Islamic Revolutionary Guard Corps official also threatened to strike vital U.S. interests and energy chokepoints if Iran’s infrastructure were targeted.
Iran issued a new warning to vessels against transiting through the Strait of Hormuz without its approval. It placed dozens of ships on a list it said had violated its instructions and threatened to fine, detain or seize them.
Only two cargo vessels transited the strait Monday, the lowest daily number since early May. Before the war, the waterway carried about one-fifth of the world’s crude oil and liquefied natural gas flows.
Adapted and translated from the original Arabic.
