Senior director of the Atlantic Council's Europe Center
Why the Iran cease-fire should spur greater Europe-Gulf cooperation
If European and Gulf leaders felt relief after Donald Trump’s climbdown from threats to destroy Iranian civilization in order to allow space for negotiations, that likely has given way to frustration by now. The plans reportedly under discussion with Tehran for reopening the Strait of Hormuz seem to impose much of the potential costs for the United States’ ill-conceived military campaign and the ambiguous retreat from it on the Gulf and perhaps Europe. If the US president's determination to take an off-ramp from the conflict results in a hardened, still-capable Iranian regime wringing concessions from Washington and continuing to be a disruptive force in the region, the war and its aftermath could amount to a strategic blunder by the United States—leaving Gulf and European leaders with a dangerous mess to clean up.
Even if this fragile cease-fire holds, more durable solutions are still urgently needed to regain free passage through the Strait of Hormuz and rebuild security in the region. Greater Europe-Gulf cooperation and action offer one way forward.
Some of that work is already happening. In recent days the United Kingdom convened more than forty countries to explore avenues for reinforcing freedom of navigation through the strait. It also deployed its Rapid Sentry anti-drone system to Kuwait, adding to the various European naval forces in the region. Italian Prime Minister Giorgia Meloni undertook an unexpected and high-risk state visit across Saudi Arabia, Qatar, and the United Arab Emirates to reinforce Europe’s commitment to the Gulf’s security and stabilizing energy supplies. Greece's Patriot missile batteries have been critical in disposing of several Iranian drone attacks. In the wake of this week’s cease-fire announcement, European Union foreign policy chief Kaja Kallas will visit the region to engage Gulf partners.
Even if Washington isn’t especially committed to coordination via its allies, Europe remains indispensable to US efforts against Iran—providing a crucial platform for power projection in matters such as refueling, basing, overflight, and repairs. And however the cease-fire and larger negotiations to end the war play out, both Europe and the Gulf will have to do much of the heavy lifting to turn an uneasy truce into regional stability. Upholding freedom of navigation—on which energy, food, fertilizer, petrochemical, and aviation-fuel supply chains depend—is a core European interest. When it comes to both Washington’s capabilities to project power and advancing a new regional framework, closer European coordination with the Gulf is not just desirable but necessary for the day after the war.
The Iran war cease-fire has prompted a flurry of diplomatic activity
Hamad Al Kaabi/UAE Presidential Court/Reuters
Officials in capitals across Europe and the Gulf welcomed the two-week cease-fire agreement reached by Washington and Tehran. The United Kingdom, Germany, France, Italy, Canada, and Japan, among others, issued a joint statement, as Saudi Arabia, the UAE, Qatar, and Kuwait all called for further de-escalation and advancing regional stability. Kallas and UK Prime Minister Keir Starmer departed on separate trips to meet with Saudi Arabian, Qatari, and Gulf Cooperation Council leadership, while NATO Secretary General Mark Rutte met with Trump at the White House.
Expert take
Amanda Thorpe
Nonresident senior fellow with the Atlantic Council's Europe Center
“Among the elements of national power, military force is the most dramatic and direct—clearly favored by the United States and Israel.
However, as the Iranian regime has responded with its own powerful economic [tools], the rest of the world is now turning to the element of power that should be the first among equals but is often used as a last resort: diplomacy.”
Defense and security
From Rapid Sentry to commercial deals, Europe-Gulf defense partnerships are accelerating
Britain deployed its Rapid Sentry anti-drone system to Kuwait after an Iranian strike hit a Kuwaiti oil refinery, marking the United Kingdom’s most direct military contribution to Gulf security since the war began. In the UAE, three fires broke out at the Borouge petrochemical plant in Abu Dhabi’s Ruwais Industrial City after debris from an air-defense interception struck the site. Meanwhile, European defense-tech firms reported that commercial interest from Gulf governments is surging.
Expert take
Allison Minor
Director of the Atlantic Council's Project on Middle East Integration within the Rafik Hariri Center and Middle East Programs
“As Gulf countries scramble to strengthen their air defenses, pursue more efficient counter-drone solutions, and replenish stockpiles, no single partner can provide sufficient solutions.
When the war concludes, there will be an opportunity to translate this patchwork of support into a more coherent but diversified partnership with the US and other trusted countries.”
Economy
The economic outlook is worsening not just in Europe and the Gulf but also globally
The OECD’s Economic Outlook Interim Report for March 2026 downgraded its economic forecasts for the global economy, particularly lowering Eurozone growth by 0.4 percentage points (from an original 1.2 percent to 0.8 percent) and issuing higher inflation-rate expectations above 4 percent for Group of Twenty (G20) economies. Concurrently, the UAE’s Central Bank channeled 30 billion dirhams into its banking system to offset the growing impact of the Iran war. The conflict’s economic ramifications go beyond energy flows, with the disruptions increasing prices across the food, fertilizer, chemical, aluminum, and medical-equipment sectors.
Expert take
Frances Burwell
Distinguished fellow at the Atlantic Council's Europe Center and senior director at McLarty Associates
“We are only beginning to understand the economic ramifications of the US-Israel conflict with Iran. Energy will clearly be disrupted globally, but there will also be major impacts on fertilizer (and thus on food supplies) and on chemicals, which affects almost every sector of the global economy.
For Europe, a short, sharp conflict would have just represented a temporary hiccup in the economy, but the closing of the Strait of Hormuz threatens a much more serious challenge. This is the second time in five years that European energy prices have trended toward unaffordable, with the first after Russia’s full-scale invasion of Ukraine in 2022. With growth rates now expected to be less than 1 percent in 2026, Europe’s economy is faltering. This will not only cause economic challenges in the daily lives of many Europeans, but also reduce the attractiveness of Europe as an investment destination. And those economic consequences will have political fallout, potentially making Europe even more divided politically, with the extreme right and extreme left reaping the benefits.
Moreover, Europeans are largely critical of this war, viewing it as unjustified and unnecessary, and distracting from the very real conflict on the continent’s eastern border. As the European economy weakens, some will undoubtedly blame the United States, deepening the divide that is growing across the Atlantic.”
Energy
The Iran war is transforming the cost of global energy—as an important sanctions deadline approaches
Saudi Aramco raised pricing for its crude to unprecedented levels, charging Asian buyers nearly $20 per barrel above benchmark—double any previous premium—as the war has rerouted export flows away from the Strait of Hormuz. Iranian strikes have continued to target Gulf infrastructure, setting fire to a major Kuwaiti refinery for the second time and activating air defenses across the region. In Europe, five finance ministers called for an EU-wide windfall tax on energy companies, arguing that firms profiting from the crisis should help cushion the public.
Expert take
Maia Nikoladze
Associate director at the Atlantic Council's Economic Statecraft Initiative within the GeoEconomics Center
“As Middle Eastern oil prices rise, many low- and middle-income Asian countries risk being priced out, pushing them toward discounted Russian and Iranian crude. The US Treasury Department's one-month waivers enabling these purchases expire within the next two weeks. Extending them could ease short-term supply pressures but would also benefit Russia and Iran—countries the United States and its allies seek to counter.”
