| The year that shook the Gulf |
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| Illustration: Aïda Amer/Axios. Stock: Getty Images |
| The United Arab Emirates is leaving OPEC. Saudi Arabia is ending its splashiest foreign sports venture. The two U.S. allies are in the midst of a messy divorce, even as both face fire from Iran. Why it matters: One year after President Trump’s grand tour of the Gulf, the region’s vision of a geopolitically stable post-oil future — powered by tourism, AI and American capital — has taken a major blow, Axios’ Dave Lawler, Barak Ravid and Zachary Basu write. The trillions of dollars in investment pledges that Trump secured on his trip are in limbo.So is the American “golden age” he claimed would be bankrolled in part with Gulf money. The big picture: Trump’s trip may prove the high-water mark for the idea that the future of AI, global investment and geopolitics would all flow through the Gulf. The Saudi sovereign wealth fund’s exit from LIV Golf, after pouring more than $5 billion into the PGA competitor since 2022, is the first major casualty of the kingdom rationing cash as oil exports sink. No one is rushing to build $20 billion data centers in Saudi Arabia or the UAE after Iran proved it can strike them with cheap drones, as Constellation CEO Joe Dominguez told Axios. Gulf leaders have spent a generation perfecting the Dubai model — selling stability as a luxury good to foreign tourists, expats and investors. Iran’s attacks on luxury hotels and airports have undercut that premise. Friction point: The UAE’s break from the Saudi-led oil cartel is the latest fracture in a regional rivalry driven by clashing alliances and views on Yemen, Sudan and Palestine, as well as personal animosity between the two leaders. The Iran war has only deepened the rift. Behind the scenes: The Trump administration was slow to grasp how serious that rift between the UAE and Saudi Arabia had become — and chose not to get involved as it deepened, U.S. and regional sources told Axios. Senior officials are deeply concerned that Washington’s two most important Arab allies will emerge from the war more adversarial than ever. Reality check: The Gulf states still have deep reserves of energy and capital, plus a security relationship with Washington that the war has only strengthened. Some analysts see the Iran crisis as a temporary shock for the Gulf economies, not an existential crisis. The bottom line: A year after his Gulf tour, Trump’s promised investment bonanza has collided with the consequences of his Iran war. Fixing the damage may take longer than the time he has left in office.Share this story. |
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