The Iraq War Reshapes the Middle East Landscape: Geopolitical Changes and Their Link to Oil Prices
2026-06-11 18:09:35
The Iraq War plunged the region into prolonged instability, but ultimately, the rise of Iran weakened the United States' influence in the Middle East.
The military intervention in Libya not only caused national division, but also caused weapons and armed personnel to spill over into Mali and Chad, undermining the periphery security of oil transport routes in sub-Saharan Africa;
Armed support for the Syrian opposition ignited a civil war that has lasted for years, fostered extremism, and the refugee crisis has indirectly influenced the direction of European energy policy, thereby affecting expectations regarding global crude oil demand.
The US-Iran war that broke out in 2026 followed the same trajectory, bringing about tremendous changes to the already complex situation in the Middle East.
US President Trump has set multiple objectives for this war: to change the Iranian regime, destroy its nuclear program, weaken Iran's military power, support domestic protests in Iran, and thereby demonstrate America's strength and influence to the world.
However, as the war progressed, almost all of the core objectives were lost, and many negative consequences arose.
Iran has thus gained firm control of the Strait of Hormuz, a crucial waterway that carries nearly one-third of the world's maritime crude oil transport. The security landscape has been completely rewritten by the United States' unilateral military actions, which have severely depleted its soft power and global alliance system.
The power structure within Iran has also shifted, with a cautious, elderly, and low-approval senior leader stepping down and being replaced by a military-led regime with a hardline stance, a strong desire for retaliation, and extremely low trust in foreign powers. Geopolitical risks in the heart of the Middle East have since remained high for a long period.
In the eyes of the Arab oil-producing countries in the Middle East, going to war with Iran would be tantamount to cutting off their own economic lifeline. Therefore, before the conflict broke out, the countries in the region had already taken the initiative to ease relations with Iran.
The UAE resumed bilateral diplomacy in 2022, and Saudi Arabia reached a normalization agreement with Iran in 2023 with the help of external forces. Iran has also launched a visa-free policy for several Gulf countries. All parties are actively carrying out diplomatic and economic exchanges in order to maintain regional stability.
Arab countries are not ignoring Iran's hard power, but a series of events in 2019 made them realize the limitations of the United States' security commitments.
At that time, the United States imposed "maximum pressure" sanctions on Iran, which triggered Iranian retaliation. Two major Saudi Arabian oil facilities were attacked by drones, and global oil prices surged by nearly 20% in a single day, but the United States did not take strong countermeasures.
By 2026, Saudi Arabia and the UAE are investing heavily in emerging industries and promoting economic transformation. A stable external environment is a prerequisite for development. Therefore, the Gulf countries openly oppose war and even refuse the US military's use of their airspace and territory.
The United States disregarded the demands of all parties and insisted on launching a war, causing heavy losses to the Gulf states. Since then, the United States has lost the trust of its security partners in the Middle East, and countries have accelerated the implementation of their own energy security strategies and continuously expanded diversified international cooperation to offset the risks brought by relying on a single ally.
The Iraq War further amplified the contradictions within the Gulf Cooperation Council, and the differences between Saudi Arabia and the United Arab Emirates, the two core oil-producing countries, became fully public.
Previously, the two countries shared a common position on issues such as containing Iran and combating regional extremist forces, but later their grievances deepened due to issues such as capital competition, diplomatic orientation, and support for regional forces.
The UAE is dissatisfied with Saudi Arabia's market competition tactics and diplomatic maneuvering, while Saudi Arabia accuses the UAE of interfering in the situation in Yemen, cooperating with Israel in secret, and violating oil production cut agreements.
As the war spread, the extent of damage varied drastically among the countries, and the conflict escalated once again.
The UAE was attacked by more than 3,000 missiles and drones, becoming the country most severely impacted. Saudi Arabia, relying on its cross-border pipeline to the Red Sea, continued to export crude oil despite disruptions in the Strait of Hormuz; rising oil prices increased its oil revenue by approximately $9 billion, while Oman's revenue also increased by nearly $6 billion. In contrast, the UAE, Qatar, Kuwait, and other countries experienced significant revenue losses due to disrupted crude oil exports.
The imbalance in the distribution of benefits directly led the UAE to announce its withdrawal from OPEC in April 2026.
The already fragile unity of the Gulf states has partially crumbled, efforts to build a regional common security architecture have stalled, and the countries are going their own way on issues such as diplomacy with Iran and regional cooperation, making the division of the bloc a foregone conclusion.
As a result of the Iraq War, Israel's regional situation has become increasingly isolated.
Even before the outbreak of war, the American public's favorability toward Israel was declining due to the situation in Gaza and the policies of the American far right. Israel's deep involvement in and promotion of this war has further fueled the negative public opinion.
Related polls show that 60% of Americans have a negative view of Israel, over 70% of young Americans are more inclined to sympathize with Palestine, and many Democratic lawmakers have also publicly opposed sending weapons to Israel. The possibility of the United States reducing or even ending security aid to Israel in the future is increasing.
In the Middle East, the normalization process of relations between Israel and Arab countries has come to a complete standstill. Apart from the UAE, which continues to cooperate, major oil-producing countries such as Saudi Arabia and Qatar have distanced themselves from Israel.
Trump attempted to make joining the Abraham Accords a condition for a ceasefire, but this was explicitly rejected by Saudi Arabia and other countries.
Israel's diplomatic space is shrinking, its regional strategy is becoming more radical, further disrupting the already volatile Middle East order, and regional security coordination mechanisms are completely failing.
From regional power shifts and shifts in national diplomacy to the fragmentation of alliance systems and the collapse of security architecture, the 2026 US-Iran war has completed a major transformation of the overall landscape of the Middle East.
As the world's core energy production region, all the changes in this geopolitical upheaval in the Middle East will ultimately be directly reflected in international oil prices.
The navigational risks in the Strait of Hormuz, coupled with the withdrawal of OPEC members, have led to oil-producing countries acting independently, reducing their dependence on the Strait of Hormuz. Furthermore, in the future, even further down the spectrum, oil prices may eventually return to relatively low levels as the global energy transition ends and the impact of this crisis dissipates.
However, the weakening of OPEC may actually benefit Western oil groups, which is one of the few possible positive factors for the United States. The situation of the US shale gas industry needs to be observed in the future. However, since many shale oil companies were eliminated before the war, many companies did not survive until oil prices rose.
The military intervention in Libya not only caused national division, but also caused weapons and armed personnel to spill over into Mali and Chad, undermining the periphery security of oil transport routes in sub-Saharan Africa;
Armed support for the Syrian opposition ignited a civil war that has lasted for years, fostered extremism, and the refugee crisis has indirectly influenced the direction of European energy policy, thereby affecting expectations regarding global crude oil demand.
The US-Iran war that broke out in 2026 followed the same trajectory, bringing about tremendous changes to the already complex situation in the Middle East.
The initial goals of the war have failed, and Iran's regional influence has increased significantly.
US President Trump has set multiple objectives for this war: to change the Iranian regime, destroy its nuclear program, weaken Iran's military power, support domestic protests in Iran, and thereby demonstrate America's strength and influence to the world.
However, as the war progressed, almost all of the core objectives were lost, and many negative consequences arose.
Iran has thus gained firm control of the Strait of Hormuz, a crucial waterway that carries nearly one-third of the world's maritime crude oil transport. The security landscape has been completely rewritten by the United States' unilateral military actions, which have severely depleted its soft power and global alliance system.
The power structure within Iran has also shifted, with a cautious, elderly, and low-approval senior leader stepping down and being replaced by a military-led regime with a hardline stance, a strong desire for retaliation, and extremely low trust in foreign powers. Geopolitical risks in the heart of the Middle East have since remained high for a long period.
Mutual trust has completely collapsed, and the Gulf states are turning to strategic autonomy.
In the eyes of the Arab oil-producing countries in the Middle East, going to war with Iran would be tantamount to cutting off their own economic lifeline. Therefore, before the conflict broke out, the countries in the region had already taken the initiative to ease relations with Iran.
The UAE resumed bilateral diplomacy in 2022, and Saudi Arabia reached a normalization agreement with Iran in 2023 with the help of external forces. Iran has also launched a visa-free policy for several Gulf countries. All parties are actively carrying out diplomatic and economic exchanges in order to maintain regional stability.
Arab countries are not ignoring Iran's hard power, but a series of events in 2019 made them realize the limitations of the United States' security commitments.
At that time, the United States imposed "maximum pressure" sanctions on Iran, which triggered Iranian retaliation. Two major Saudi Arabian oil facilities were attacked by drones, and global oil prices surged by nearly 20% in a single day, but the United States did not take strong countermeasures.
By 2026, Saudi Arabia and the UAE are investing heavily in emerging industries and promoting economic transformation. A stable external environment is a prerequisite for development. Therefore, the Gulf countries openly oppose war and even refuse the US military's use of their airspace and territory.
The United States disregarded the demands of all parties and insisted on launching a war, causing heavy losses to the Gulf states. Since then, the United States has lost the trust of its security partners in the Middle East, and countries have accelerated the implementation of their own energy security strategies and continuously expanded diversified international cooperation to offset the risks brought by relying on a single ally.
Internal divisions have intensified, and the cohesion of the Gulf alliance continues to weaken.
The Iraq War further amplified the contradictions within the Gulf Cooperation Council, and the differences between Saudi Arabia and the United Arab Emirates, the two core oil-producing countries, became fully public.
Previously, the two countries shared a common position on issues such as containing Iran and combating regional extremist forces, but later their grievances deepened due to issues such as capital competition, diplomatic orientation, and support for regional forces.
The UAE is dissatisfied with Saudi Arabia's market competition tactics and diplomatic maneuvering, while Saudi Arabia accuses the UAE of interfering in the situation in Yemen, cooperating with Israel in secret, and violating oil production cut agreements.
As the war spread, the extent of damage varied drastically among the countries, and the conflict escalated once again.
The UAE was attacked by more than 3,000 missiles and drones, becoming the country most severely impacted. Saudi Arabia, relying on its cross-border pipeline to the Red Sea, continued to export crude oil despite disruptions in the Strait of Hormuz; rising oil prices increased its oil revenue by approximately $9 billion, while Oman's revenue also increased by nearly $6 billion. In contrast, the UAE, Qatar, Kuwait, and other countries experienced significant revenue losses due to disrupted crude oil exports.
The imbalance in the distribution of benefits directly led the UAE to announce its withdrawal from OPEC in April 2026.
The already fragile unity of the Gulf states has partially crumbled, efforts to build a regional common security architecture have stalled, and the countries are going their own way on issues such as diplomacy with Iran and regional cooperation, making the division of the bloc a foregone conclusion.
Israel's diplomatic isolation and limited regional development space
As a result of the Iraq War, Israel's regional situation has become increasingly isolated.
Even before the outbreak of war, the American public's favorability toward Israel was declining due to the situation in Gaza and the policies of the American far right. Israel's deep involvement in and promotion of this war has further fueled the negative public opinion.
Related polls show that 60% of Americans have a negative view of Israel, over 70% of young Americans are more inclined to sympathize with Palestine, and many Democratic lawmakers have also publicly opposed sending weapons to Israel. The possibility of the United States reducing or even ending security aid to Israel in the future is increasing.
In the Middle East, the normalization process of relations between Israel and Arab countries has come to a complete standstill. Apart from the UAE, which continues to cooperate, major oil-producing countries such as Saudi Arabia and Qatar have distanced themselves from Israel.
Trump attempted to make joining the Abraham Accords a condition for a ceasefire, but this was explicitly rejected by Saudi Arabia and other countries.
Israel's diplomatic space is shrinking, its regional strategy is becoming more radical, further disrupting the already volatile Middle East order, and regional security coordination mechanisms are completely failing.
The global landscape is undergoing a complete restructuring, with Middle Eastern geopolitics profoundly impacting global oil prices.
From regional power shifts and shifts in national diplomacy to the fragmentation of alliance systems and the collapse of security architecture, the 2026 US-Iran war has completed a major transformation of the overall landscape of the Middle East.
As the world's core energy production region, all the changes in this geopolitical upheaval in the Middle East will ultimately be directly reflected in international oil prices.
The navigational risks in the Strait of Hormuz, coupled with the withdrawal of OPEC members, have led to oil-producing countries acting independently, reducing their dependence on the Strait of Hormuz. Furthermore, in the future, even further down the spectrum, oil prices may eventually return to relatively low levels as the global energy transition ends and the impact of this crisis dissipates.
However, the weakening of OPEC may actually benefit Western oil groups, which is one of the few possible positive factors for the United States. The situation of the US shale gas industry needs to be observed in the future. However, since many shale oil companies were eliminated before the war, many companies did not survive until oil prices rose.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
