No region feels the U.S.-Iran whiplash more directly than the Gulf – yet it has had little control over events throughout this war, and that has not changed.  

As Washington and Tehran trade claims and counter-claims, the Gulf is left absorbing the whiplash: scammers preying on stranded ships, the UAE quietly exploring financial lifelines, at least 230 loaded tankers going nowhere, insurance bills that would have been unthinkable months ago, and now ships seized in the Strait of Hormuz. This week's Gulf Currents takes stock of the mounting damage. 

In the past two weeks, Iran has declared the Strait of Hormuz open and closed it again. Trump has said Tehran agreed to everything and threatened to blow Iran up. Washington and Tehran have spent the entire ceasefire period announcing things the other side immediately denies. 

For the Gulf, the uncertainty this has produced is existential. When declarations are reversed within 48 hours and both sides deny what the other announces, the region cannot plan for peace — only for the next reversal.  

The pattern has been almost mechanical in its repetition. On Friday, Iran's Foreign Minister declared the Strait fully open to commercial traffic, sending crude prices falling more than 10%. By Saturday, it was closing the waterway to most traffic again, firing on vessels and blaming the United States for "breaches of trust." Shipping through the strait remained largely halted on Tuesday. In less than 48 hours, a market-moving declaration had been made, celebrated, and erased. 

Washington's contribution to the confusion was no less acute. Trump told reporters Iran had agreed to almost everything — including surrendering its enriched uranium stockpiles — which Tehran flatly denied. 

The Iranian side has also deployed ambiguity. The Foreign Ministry said continued ceasefire violations by the U.S. were major obstacles to continuing diplomacy. Yet Iran has not walked away either. A senior Iranian official told Reuters it was still weighing whether to attend talks as the end of the initial truce approached, keeping everyone guessing. 

The cost of this rhetorical crossfire falls most directly on the Gulf. ADNOC CEO Sultan Al Jaber said on April 9 that the strait was still not open despite the ceasefire, because Iran was restricting and conditioning traffic — and that 230 loaded oil tankers were waiting inside the Gulf.  

The insurance market tells a similar story. Lloyd's Market Association warned that the region "remains at heightened risk with none of the underlying tensions resolved." Before the war, insuring a supertanker for a Hormuz transit cost roughly 0.2% of the vessel's hull value. Rates have since climbed to as high as 5% for vessels with American, British or Israeli connections, representing an insurance bill of up to $7.5 million for a single voyage. 

That is the bitter inheritance of two weeks of competing declarations. The Gulf states are not party to these talks — if talks is even the right word — but the consequences are already arriving, whether or not a deal follows. 

Washington has ‌flagged it would give the Gulf state financial assistance if it so needed. The U.S. also says the UAE may not need a full dollar swap line. With financial buffers over 500% of GDP, and less apparent need for a 2009-style Dubai bailout by Abu Dhabi, that looks right. Read more on Breakingviews. 

By Alex Lawler  

The U.S.-Israeli war with Iran and the closure of the Strait of Hormuz have caused the biggest oil supply disruption on record by daily output lost, though at least one earlier shock had a greater cumulative impact, according to Reuters calculations.  

The IEA said the conflict is the worst energy crisis the world has faced.  

The peak supply loss stands at more than 12 million barrels per day — equivalent to 11.5% of global oil demand. Unlike earlier crises, the Iran war has simultaneously hit crude, natural gas, refined fuel and fertiliser supplies. Countries with spare capacity — Saudi Arabia and the UAE — have been unable to compensate because they themselves have been hit by the halt in shipments through the Strait of Hormuz. 

Read the full story here. 

This newsletter was edited by Aidan Lewis and produced by Rawan Yaghi.