The map of the Middle East isn't just changing. It's being redrawn by a sharp shift in who actually holds the cards. For decades, we've lived with the assumption that the United States is the undisputed heavyweight in the Persian Gulf. That's a dated perspective. If you look at the current geopolitical friction, you'll see a Washington that's struggling to maintain its grip while Israel manages to pivot into a position of unexpected strength.
Professor Joshua Landis from the University of Oklahoma recently pointed out this jarring reality. He suggests the U.S. is essentially in a losing position in the Gulf. I think he’s right, but the reasons go deeper than just bad policy or individual administration failures. It’s a systemic collapse of the old "oil for security" arrangement that defined the 20th century.
Israel, once the isolated pariah of the region, is now becoming a central pillar for Gulf monarchies. They aren't doing this because they’ve suddenly fallen in love with Israeli culture. It’s about cold, hard survival. They’re terrified of Iran. And right now, they don't trust the U.S. to be the shield it used to be.
The American Retreat is Real
We need to stop pretending the U.S. is just "repositioning." It’s a retreat. Think about the messaging coming out of Washington over the last ten years. Whether it was the "Pivot to Asia" or the chaotic exit from Afghanistan, the signal to the Arab world was clear. America is tired. We’re distracted. We’re more worried about domestic inflation and the rise of China than we are about the security of a tanker in the Strait of Hormuz.
This creates a vacuum. Power hates a vacuum.
For the Gulf states—Saudi Arabia, the UAE, Qatar—the U.S. was the ultimate insurance policy. But insurance is useless if the company won't pay out when the house is on fire. When Saudi oil facilities were hit by drones and missiles in 2019, the American response was tepid. That was a massive wake-up call for Riyadh. They realized that the old handshake deals don't mean much in a multipolar world.
Today, China is the biggest customer for Gulf oil. Russia is a partner in managing oil prices through OPEC+. The U.S. has become a competitor in energy production thanks to shale. The leverage is gone. Washington keeps trying to lecture these leaders on human rights or democratic values, but that doesn't fly when you're also asking them to keep gas prices low for your voters. It's a messy, contradictory relationship that's fraying at the edges.
Israel is the New Regional Security Hub
While the U.S. pulls back, Israel is leaning in. This is the core of the Landis argument. The Abraham Accords weren't just a PR stunt. They were a military and intelligence merger.
The Gulf monarchies look at Israel and see a country that shares their primary nightmare: a nuclear-armed Iran. Unlike the U.S., Israel can't "pivot" anywhere else. They live there. Their skin is in the game. This makes them a more reliable partner for the Saudis or Emiratis than a distant superpower that changes its entire foreign policy every four or eight years based on an election.
Israel offers three things the Gulf desperately wants:
- Direct Intelligence: Real-time data on Iranian movements and proxy activities.
- Technology: Everything from Pegasus spyware to advanced missile defense systems like Iron Dome.
- A Lobby in Washington: The Gulf states know that being close to Israel helps them maintain influence in the U.S. Congress, regardless of who's in the White House.
It’s a cynical alliance, sure. But in the Middle East, cynicism is the most stable currency.
The Iran Factor and the Failure of Containment
The U.S. strategy toward Iran has been a pendulum of disaster. We went from the JCPOA (the nuclear deal) to "Maximum Pressure" and then to a weird, limbo-like state of half-sanctions. This inconsistency has made Iran bolder. They’ve successfully built a "land bridge" of influence through Iraq, Syria, and Lebanon.
Landis argues that the U.S. hasn't just lost the Gulf; it’s lost the struggle for the Levant. If you look at Syria, the U.S. remains stuck in a tiny corner of the country with no clear path to victory or exit. Meanwhile, Iran and Russia have basically won that round.
Israel, however, takes a different approach. They call it "the war between wars." They don't wait for a grand diplomatic solution that's never coming. They strike. They hit IRGC targets in Syria. They sabotage nuclear facilities. They do the dirty work that the U.S. no longer has the stomach for. This proactive stance is exactly what makes them attractive to the Gulf leaders who feel increasingly vulnerable.
Why This Matters for Your Portfolio and the World
If you think this is just about tanks and diplomats, you're missing the economic ripple. The shift in power affects everything from the price of a gallon of gas to the stability of global shipping lanes.
When the U.S. loses influence, we lose the ability to dictate the terms of global trade. We’re seeing "de-dollarization" talks in the BRICS+ meetings. We’re seeing Saudi Arabia consider pricing oil in Yuan. These aren't just threats; they're symptoms of a world where America's word is no longer law.
Watch the Red Sea
The Houthi attacks in the Red Sea are a perfect example of this shift. Despite an international coalition led by the U.S., shipping is still being disrupted. The "world’s policeman" is struggling to stop a militia from messing with global commerce. Israel, meanwhile, is forced to handle its own defense while trying to maintain its new ties with its Arab neighbors. It’s a high-stakes balancing act.
The Limits of the New Alliance
Don't get it twisted. This Israel-Gulf honeymoon has its limits. The Palestinian issue still matters, not necessarily to the monarchs, but to their people. Every time there’s a flare-up in Gaza or the West Bank, it puts immense pressure on the leaders in Riyadh and Abu Dhabi to distance themselves from Jerusalem.
But notice something interesting. Even during the most intense fighting, the core security cooperation usually stays intact behind closed doors. Why? Because the threat of Iran is existential for these regimes. They can't afford to walk away from Israel's military might over a conflict they’ve mostly checked out of.
Moving Past the Old Guard Mentality
We have to stop looking at the Middle East through a 1990s lens. The U.S. isn't the only player in town anymore. China is brokering deals between Saudi Arabia and Iran. Russia is a major power broker in Syria. Israel is the tech and security powerhouse of the region.
America’s "losing" position comes from a refusal to accept this new reality. We’re still trying to play the role of the benevolent hegemon while our domestic politics makes us look like an unstable partner.
If you're watching this space, stop focusing on the speeches at the UN. Start looking at where the tech is going. Look at who is buying whose air defense systems. Look at the joint intelligence centers being built in the desert. That’s where the real power is shifting.
To stay ahead of these changes, you need to diversify your perspective. Don't just read Western state department briefings. Look at regional outlets like Al-Monitor or the Jerusalem Post to see how the local players are reacting to each other. Pay attention to the energy markets—specifically how the UAE and Saudi Arabia are investing their sovereign wealth. They’re moving away from a reliance on U.S. debt and toward regional infrastructure and tech. That’s the real sign of a power shift. The era of American dominance in the Gulf is over. The era of regional realpolitik is just beginning.
