It’s bigger than the both of them. This week, the United States and Iran will sign a memorandum of understanding (MOU), which is expected to reopen the Strait of Hormuz and solidify the ceasefire that they struck seventy days ago. The bilateral agreement will have far-reaching implications for other countries in the Middle East and beyond. Below, Atlantic Council experts assess the impacts on several affected regions and countries.
The Gulf states
The Gulf states have been keen to see an end to the uncertainty provoked by the misjudged war against Iran, as well as a reopening of the Strait of Hormuz to more normal maritime traffic. These countries have been hit by Iranian missiles and drones, had their oil and gas exports disrupted due to the double blockade of the strait, and suffered casualties—in some cases, fatalities—because of the war. In their view, the agreement between the US and Iran could not come soon enough. Some Gulf Cooperation Council (GCC) members, particularly Qatar, have played a significant role as mediators in achieving the agreement.
GCC states have been some of the major losers from the conflict. Their projected economic growth has been revised down, and inflation has edged up. There’s also been some loss of confidence in their economic model and a reduction in the number of expat resident workers and tourists. In some cases—such as Qatar’s Ras Laffan liquefied natural gas plant—significant damage has been done to the infrastructure upon which the economy is dependent, and it may take years to recover fully.
Responses among GCC states to this conflict have varied, ranging from complete opposition to the war from the start (Oman and Qatar) to more ambiguous approaches (Saudi Arabia and the United Arab Emirates). But at this point, on the eve of the signature of an initial agreement, the gaps between GCC member states seem to have narrowed significantly.
Looking ahead, it seems unlikely that the Gulf states will immediately see a return to business as usual. Confidence in the reliability of Washington as an ally has likely diminished, though the Gulf states remain dependent on US hard-security projection from bases in their countries to guarantee their defense. Despite a demand from US President Donald Trump that they expand and deepen the Abraham Accords, GCC states are unlikely to make that a priority, seeing as they are faced with an Israeli government (supported by public opinion) that seems intent on trying to undermine the agreement and re-escalate the conflict. More likely is GCC support for the negotiation of a sustainable long-term deal that comprehensively addresses Iran’s nuclear capability and disruptive actions in the region through proxies—that is, some sort of Joint Comprehensive Plan of Action–plus. Acceptance of new arrangements governing passage through the Strait of Hormuz may be a price that GCC states are reluctantly prepared to pay to underwrite a sustainable deal and avoid future closures of the waterway.
The Gulf states, having been so directly impacted by the unprecedented Iranian response to US and Israeli aggression, seem unlikely to forge close alliances with Tehran any time soon. That said, they will likely seek to increase diplomatic engagement in the hope of reducing the threat of a renewed conflict.
—Nicholas Hopton is a nonresident senior fellow with the Scowcroft Middle East Security Initiative at the Atlantic Council’s Middle East programs. He served as British ambassador to Libya (2019–2021), Iran (2015–2018), Qatar (2013–2015), and Yemen (2012–2013).
Israel
JERUSALEM—Israel lost the US-Iran war. That’s the predominant view among Israelis, only 18 percent of whom are expressing support for the deal that Trump has reached with the Iranians.
Trump’s enthusiasm to end the conflict quickly—on March 1, he estimated that the US assault would continue for only “four to five weeks”—and pivot to a bargain with Iran was never shared by Israeli Prime Minister Benjamin Netanyahu, who rejects the concept of accommodation with Iran’s Islamist rulers. Emerging contours of the MOU are confirming Israel’s worst fears. Other than its acquiescence to restore passage through the Strait of Hormuz, Tehran appears to have conceded nothing tangible in exchange for Trump’s commitment to stand US forces down.
Jerusalem has manifold concerns. On Iran’s nuclear program—the ostensible trigger for Operation Epic Fury—the MOU suffices with rhetorical promises, deferring the actual mechanics of blocking Iran from acquiring a nuclear weapons capacity, with no guarantee of agreement on that most critical issue. The MOU apparently offers no treatment of Iran’s ballistic missile arsenal or its patronage of terrorist proxies, leaving Israel—”the cancerous tumor,” in the Iranian supreme leader’s words—to contend with those additional threats as well. Meanwhile, Iran’s theocratic regime stands to pocket renewed legitimacy and a windfall of assets that it will almost certainly invest in upgrading its offensive and defensive capabilities.
No less troubling for Israel is the state of its relations with its foremost ally. Trump refused to share a preliminary text of the MOU with Netanyahu, whose judgment he has brought into question—using multiple expletives—while, at the same time, describing Iranian interlocutors as “very rational people [who] … were nice to deal with.” The administration has curtailed Israel’s autonomy not only vis-à-vis Iran but also in Lebanon, where Trump is suggesting to “let Syria take care of Hezbollah” instead.
The prospect of further deterioration looms. “You better be careful, or you will be on your own very soon,” Trump reportedly warned Netanyahu. In telling his security cabinet on June 9 that Israel could be forced to “deal alone with the Iranians,” Netanyahu signaled that he believes likewise.
—Shalom Lipner is a nonresident senior fellow at the Atlantic Council’s Scowcroft Middle East Security Initiative who previously worked in foreign policy and public diplomacy during his time at the Prime Minister’s Office in Jerusalem, where he served in the administrations of seven consecutive Israeli premiers.
Lebanon
BEIRUT—The reaction in Lebanon toward the conclusion of a MOU between the United States and Iran is one of confusion and uncertainty. Leaks of the MOU’s fourteen points indicate that the war in Lebanon will end, but there is no specific mention of an Israeli troop withdrawal from Lebanese territory. On Tuesday, Iranian Foreign Minister Abbas Araghchi said thatIran believes the agreement would include an Israel troop withdrawal from the area it currently occupies. However, Israeli Defense Minister Israel Katz has said Israeli forces will remain in Lebanese territory.
On Monday, Hezbollah temporarily halted its attacks on Israeli troops and tens of thousands of displaced southerners attempted to return to their homes. Israeli forces, however, continued shelling parts of southern Lebanon, targeted several individuals moving close to their lines, and continued to fly drones over Beirut. Hezbollah has carried out several attacks since then but tellingly has not formally declared them in daily statements.
Meanwhile, Hezbollah is emerging from this conflict more bullish and more closely controlled by Iran than at any time since its founding more than forty years ago.
It is also even more adamant about retaining its weapons now that its “resistance” narrative has been revitalized by Israel’s new occupation of southern Lebanon. The Lebanese government, which faced the humiliation of Iran negotiating with the US on its behalf, faces an even greater challenge in pursuing Hezbollah’s disarmament, but it appears determined to continue the Washington-hosted direct talks with Israel.
There are signs that Hezbollah, which vociferously opposes the Lebanon government’s negotiations with Israel, may seek to topple the government and replace it with one that withdraws the disarmament project. Netanyahu is facing huge domestic criticism as a consequence of the MOU, and he will have to decide in the four-month period before elections whether to ignore Trump and escalate in Lebanon, with all that entails, or abide by US interests in the MOU and suffer the potential domestic consequences.
In my thirty-two years living in Lebanon, I don’t think I have ever seen a greater mess with more unpredictable consequences.
—Nicholas Blanford is a nonresident senior fellow with the Atlantic Council’s Middle East Programs based in Beirut, Lebanon.
Iraq
Iraq was one of the Iran war’s biggest losers, hit by multiple parties to the conflict and teetering on the verge of economic crisis. Iraqi Foreign Minister Fuad Hussein recently acknowledged that if the Strait of Hormuz did not reopen, Iraq would be unable to pay government salaries in July. The reopening of the Strait of Hormuz offers Iraq an economic lifeline, allowing the country to resume the oil exports the government depends on for over 90 percent of its revenue.
Even as the end of the war brings welcome economic relief, it did not dislodge the Iranian regime nor undermine its influence in Iraq. During the war, the Iran-backed militias demonstrated their continued kinetic and political power, effectively ending former Iraqi Prime Minister Mohammed Shia’ al-Sudani’s hopes for a second term and sending a potent reminder of Iran’s ability to destabilize the country. Iraq’s newly appointed prime minister, Ali al-Zaidi, will face an even more challenging landscape as he attempts to maintain a partnership with a United States intent on breaking Iran’s hold on his country and an Iranian regime ready to protect a prized asset.
—Victoria J. Taylor is director of the Atlantic Council’s Iraq Initiative. She served most recently as deputy assistant secretary of state for Iraq and Iran during the Biden and Trump administrations.
Syria
Syria has been fortunate in suffering light impacts from the US-Israel conflict with Iran. It will increasingly gain from being one of the alternative routes to the Mediterranean for countries uncomfortable with their level of reliance on exporting oil and gas through the Strait of Hormuz. Iraq, for example, has already begun trucking oil through Syria to the Mediterranean coast. And there may well be more interest from Iraq and Gulf countries in restoring and expanding the pipeline network across Syrian territory.
Syria will be too focused on rebuilding its state and economy to involve itself in Israel’s conflict with Hezbollah in Lebanon. If Israel decides to limit and consolidate its military positions in Lebanon and Syria, there may be an opening for a Syrian security agreement with Israel. Without such an agreement, and without Syria coming under the terms of the US-Iran MOU, however, there is a danger that Israel will continue to be a destabilizing factor in Syria.
Overall, Syria stands to gain from a return to fragile peace in the region. But in the absence of a security agreement with Israel, Syria will be at risk from Israel not being a party to the US-Iran MOU should Israel continue to pursue military operations on Syrian territory to reinforce its national security.
—Jon Wilks is a distinguished fellow at the Atlantic Council and advises the Rafik Hariri Center’s Transatlantic Project. He was the British ambassador to Qatar, Iraq, Oman, and Yemen, as well as its special envoy to Syria. He is also a senior advisor to the Syria Britain Business Council.
Pakisan
Pakistan is one of the biggest winners from this deal. That’s in part because it was arguably more vulnerable to the conflict’s spillover risks than any country outside the Middle East: Pakistan shares a long, restive border with Iran. It has the world’s second-largest Shia population. It’s heavily dependent on Middle Eastern energy imports. And several million Pakistani expatriates live in the Arab Gulf region.
But the deal has produced strategic victories for Pakistan as well, given its prime mediation role. Pakistan has conclusively defied longstanding Indian efforts to undercut, if not isolate, Pakistan on the world stage. It has increased its influence in the Middle East, a region with major strategic significance for Islamabad. Pakistan has also strengthened its global image in a big way: Perceptions of Pakistan have long been negative, mainly because of its terrorism problems and economic distress. Now it’s being hailed as an influential global actor and peacemaker.
However, from a domestic lens, there’s a darker side to this story: Pakistan’s civilian and military leaders, emboldened by the global acclaim and confident that they won’t face pressure or pushback from the international community, could intensify their crackdowns and repression at home that have angered much of the public.
—Michael Kugelman is a resident senior fellow for South Asia at the Atlantic Council.
Russia
The US-Iran deal has both positive and negative implications for Russia. Iran’s ability to block the flow of oil through the Strait of Hormuz benefited Moscow in two ways: by increasing the prices at which Russia could sell its own oil and through the Trump administration’s relaxation on sanctions against Russian oil sales in order to prevent petroleum prices from rising even further. Just since the announcement of the US-Iran deal on Sunday, oil prices have fallen, reducing the revenue that Russia had been reaping.
Some have argued that the conflict in the Gulf has benefited Russia by distracting Western governments from Russia’s war against Ukraine. The US-Iran deal, if it holds, would bring an end to this.
Iran’s drone attacks on its neighbors resulted in several Arab states turning to Ukraine for air defense support. Ukraine’s willingness to provide it gave these states a greater stake in Ukraine’s survival than they had before—something not in Russia’s interests. If the US-Iran deal really does result in an end to Iranian attacks against its neighbors, then Moscow can hope that Gulf states’ cooperation with Ukraine will not increase. This would also ease tensions that arose between Russia and various Arab states over Moscow’s providing targeting information to Iran for its attacks.
The US-Iran deal, then, has positive as well as negative implications for Russia.
—Mark N. Katz, PhD, is a nonresident senior fellow with the Atlantic Council’s Middle East programs and a professor of government and politics at the George Mason University Schar School of Policy and Government.