Research & Commentary Results

Three months after the Iran war began, the United States and Iran are engaged in talks aimed at ending the crisis, even as both sides conducted limited military strikes against each other this week and a separate-but-linked conflict between Israel and Hizballah in Lebanon continued to escalate.

When Iranian drone strikes hit two of Amazon’s data centers in the United Arab Emirates and Bahrain in early March, amid the ongoing US-Israeli war with Iran, much of the media’s reflex was to declare it the end of the Gulf’s artificial intelligence (AI) ambitions. That read is misguided, and it misses why what Iran was trying to accomplish failed.

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 Houthis are a political-military faction and Zaydi religious movement founded in northwestern Yemen in the 1980s. A key member of Iran’s Axis of Resistance with links to other militant organizations in the Arabian Peninsula and the Horn of Africa, the group has continued to pose a threat to Western interests on a global scale.

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.

Last May, U.S. President Donald Trump paid a triumphant visit to Saudi Arabia, Qatar, and the United Arab Emirates. Over the course of a four-day tour, he admired the Gulf capitals’ “gleaming marvels,” cheered on their ambitious modernization plans, and showcased over $3 trillion in pledged Gulf investment and “mega-deals” between U.S. and Gulf businesses.

The limelight for American foreign policy shifts to Beijing this month, where US President Donald Trump and Chinese President Xi Jinping will meet on May 14-15 to address a long list of unresolved issues. But the Iran war and still unfolding geo-economic calamity resulting from it cast a long shadow. One thing to watch for is whether China or the US feels like it has a stronger hand in light of recent events in the Middle East.

The Middle East is both central to key United States interests and prone to instability. Yet US national security and defense strategic guidance has struggled to account for the unique demands of the region. Calls for strategic divestiture from the region have grown in prominence among analysts and policymakers alike in recent years.

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.

In the Trump administration’s diplomatic track with Tehran, one crucial variable is missing: steady US engagement with its Arab partners, particularly in the Gulf, on what the strategic endgame with Iran looks like.

The opposition in Congress is attempting to force a war powers vote on the Trump administration’s Iran operation, with an eye toward the 60-day deadline on military action legally imposed on the executive branch; and key defense-spending measures are also on the immediate horizon. These actions on Capitol Hill could shape the trajectory of how the US moves forward in Iran and the region — and influence Americans’ overall appetite for long-term engagement in the Middle East.

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.