Energy

There may be no near-term resolution to the conflict between the United States, Israel, and Iran. The cease-fire and memorandum of understanding (MoU) signed on June 18  have broken down, there is little diplomatic engagement, and new flare-ups in early September indicate a further round of escalation. Gulf states may have no choice but to protect their assets and populations while trying to deter Iran by finding mechanisms of both containment and accommodation.

Across the Gulf, views differ widely on how the Iran war can and should end, and what the region will look like once it does. Yet on the crisis over the closure of the Strait of Hormuz, the view is near-unanimous that a repeat is not only possible but likely. That expectation, more than any single incident over the past year, is becoming a major driver of decision-making in industry and policy circles alike.

The MENA Energy Recap is a quarterly review of key energy developments that took place in the region from April through June of 2026 and what they signal in the months ahead. The Recap views these developments through the lens of policy and strategy, energy security, and markets.

The Islamabad Memorandum of Understanding (MoU) between the United States and Iran may have ended one of the most consequential Middle Eastern crises in decades, but it has not resolved the strategic problem it exposed. Whether the 60-day talks it set in motion will produce a final agreement remains far from certain.Yet the central lessons are already clear: Iran has preserved significant leverage, Washington has had to scale back its ambitions, and Europe and the Gulf face the prospect of protracted regional tension. Europe and the Gulf should therefore use the aftermath of the US-Iran deal to articulate their own “other MoU”: a Europe-Gulf Resilience initiative.

Two and a half months into the blockade of the Strait of Hormuz, what lessons can markets draw from the resulting global energy shock? Colby Connelly, MEI Senior Fellow, joins hosts Alistair Taylor and Matthew Czekaj to assess the crisis’s impact on the energy industry. Together, they examine how producers are responding to the conflict in both the short and long term, how this moment differs from past energy disruptions, and how regional reverberations may shape international energy policies going forward.

This is a special edition of the MENA Energy Recap — a quarterly review of key energy developments that took place in the region from January through March of 2026 and what they signal in the months ahead. For Q1-26, the recap considers some of the long-term implications of the ongoing war in the region, which have caused the largest energy supply disruption in history, and what lessons these events hold for both near- and long-term energy dynamics in both the Middle East and the wider world.

The UAE’s departure represents an undeniable strategic setback for OPEC+. Its most likely response will be to shore up the amount of output capacity subject to quotas. For now, there are two clear pathways it could take to accomplish this, although neither represents a quick fix.

President Donald Trump now appears to share a view gaining traction in some policy circles: that sustained pressure on Iran’s oil sector could inflict lasting damage on its production and eventually force Tehran to compromise. The thesis is appealingly simple, yet dangerously incomplete.

The Iran war has posed significant immediate challenges for Turkey, including rising energy prices. But Turkish officials think that Ankara could reap benefits from the war in the long term.