The Gulf of uncertainty

Vessels in the Strait of Hormuz near the beach of Bandar Abbas, Iran, September 5, 2026. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED... Purchase Licensing Rights , opens new tab Read more Sept 9 - How many times can we ask whether the Middle East war has entered a new, more dangerous phase? In the biggest wave of attacks on commercial shipping since the war began, Iran said on Wednesday it struck 10 vessels near the Strait of Hormuz after the United States sank five Iranian oil tankers. A tanker carrying 2 million barrels of Iraqi fuel oil caught fire after a drone strike, merchant ships were reported hit across the Gulf and Gulf of Oman, and Brent crude surged above $100 a barrel for the first time since July. The rhetoric has escalated ​too. Iran's Revolutionary Guards warned that if the enemy strikes two or three Iranian targets, Tehran would respond by hitting 20, while signalling plans for a much larger maritime exclusion zone. At the same time, a second front is heating up. The most ‌serious Houthi attacks on Saudi Arabia since the 2022 truce left dozens wounded and oil facilities ablaze, raising fresh concerns about the security of Gulf shipping and energy infrastructure far beyond Hormuz. This week, Gulf Currents examines what happens when instability stops just being a risk and becomes a constant. We look at how a half-year security crisis is reshaping decision-making across the Gulf, how uncertainty is becoming the region's new normal, and what that means for economies built on a reputation for stability. We also round up the latest developments on the military front and highlight a Reuters investigation into how two Israeli brothers are helping drive the expansion of West Bank settler outposts. NEWS BRIEFING A tanker carrying about 2 million barrels ​of Iraqi fuel oil was struck by a drone in Iraqi territorial waters on Wednesday, sparking a fire, with no crew casualties reported. Several other merchant vessels in the Gulf were also hit by disabling fire overnight, as Iran said it had attacked 10 ships near ​the Strait of Hormuz after the U.S. sank five Iranian oil tankers. Iran's Revolutionary Guards said on Tuesday they had captured a U.S. uncrewed submarine drone at the entrance to the Strait of Hormuz, offering a rare glimpse into ⁠how underwater drones are being used in military operations. The Pentagon said it was an “older model” Anduril Dive-LD drone, carrying no sensitive data, which had malfunctioned. Saudi Arabia lifted an alert in the southern city of Khamis Mushait after Houthi attacks there and in three other nearby cities wounded 73 people and ​set oil installations ablaze. It was the most significant Houthi-Saudi escalation since a 2022 truce, coming against the backdrop of a recent Houthi Red Sea blockade and Saudi-backed offensives on Houthi territory. Houthi-run Al Masirah TV reported at least 21 killed in Saudi strikes on Al Jawf, Yemen. Saudi Arabia has not ​confirmed carrying out strikes there. THE GULF OF UNCERTAINTY For three decades, the Gulf ran on a quiet confidence you could feel in the smallest details: front doors left unlocked, empty cars idling outside a supermarket, a sense of security so complete it became invisible. Oil and gas flowed, capital followed, and people came from every corner of the world, drawn by opportunity, good money and a life that felt safe. It was, for a generation, the region's great certainty – a sure bet that few thought to question. Then came the war, followed by something harder to name: a fuzzy zone that is neither fully war nor fully peace. In August, UAE presidential adviser Anwar Gargash captured the mood in a ​post on X: "The region cannot remain in a state of neither war nor peace indefinitely; its stability and the future of its people demand clarity of vision and direction." He wasn't describing a crisis with an end date. He was describing a condition — one where the next phase "cannot be built on ​fragile foundations or arrangements” disconnected from international law, peaceful coexistence, respect for sovereignty and the logic of peace. That distinction matters for the future of the Gulf. There's a difference between risk — things you can price, like ordinary swings in oil prices — and true uncertainty, where nobody can calculate the odds because nobody can even define the ‌variables. Will the ⁠Strait of Hormuz fully reopen? Nobody knows. And, as Reuters energy columnist Ron Bousso has put it, uncertainty itself has become a fundamental in the oil market. Fear is being priced in — as a premium quietly built into everything from grocery costs to hiring decisions to government budgets. These days, it’s in small print everywhere. The Asian Infrastructure Investment Bank's own registration page for its Doha meeting later this month, for example, reassures participants it is "committed to delivering a successful gathering". But it also notes that organisers are "maintaining appropriate contingency arrangements" and that "final decisions will be taken nearer the time." The bank’s annual meeting now comes with an asterisk. Which raises an uncomfortable question: was the Gulf's 30-year certainty ever real — or a confidence trick the region needed to tell itself, and the world, to keep the money and people coming? Perhaps this isn't a deviation from the norm. Perhaps it's a correction to it. What happens next will show up in ​ordinary decisions: whether a company delays a hire, whether a family books ​a holiday without worrying the airspace might close, whether a government's ⁠budget cuts stay modest or turn deep enough to undo years of growth. Multiply enough of those choices, and uncertainty in the Gulf stops being a mood. As with the oil market, it becomes a new fundamental. CHART OF THE WEEK Brent crude futures breached $100 a barrel on Wednesday for the first time since July 24 as escalating attacks in the Middle East, including on tankers, stifled hopes of a normalisation of oil shipping in the region. The move brought ​futures prices into line with physical crude and fuel markets, where prices have already been trading above the psychological threshold. Front-month Brent crude futures were up $2.74, or 2.8%, at $100.66 a barrel by 1315 GMT, after earlier touching $100.95. ​U.S. West Texas Intermediate crude was up $2.74, ⁠or 3%, at $95.77 a barrel, its highest level since early June. Read more from Anushree Ashish Mukherjee and Robert Harvey. EXCERPT: How two Israeli brothers are driving a West Bank settler land grab From a hilltop sprawl of industrial buildings, a family of Israeli settlers is cranking out prefabricated buildings to accelerate the expansion of illegal Jewish outposts in the occupied West Bank, driving Palestinians from their homes. Libi Construction and Infrastructure, owned by brothers Eliav and Harel ‘Coco’ Libi, is building a new factory to produce the simple white structures they and others install in outposts, Eliav Libi said in an April social-media post. Seen one recent day from a nearby road, the company’s compound ⁠had at least five ​warehouses, flanked by rows of prefabricated houses and stacks of building material. Excavators worked to expand the site, which is in the settlement of Shilo. The Libi operation reflects a growing ​settlement strategy to claim expanses of West Bank land quickly and cheaply. Instead of building modern complexes and neighborhoods, with Israeli government permits, these outposts often start with one or two prefabricated houses and no legal approval. They’re occupied by young Israeli herders who bring livestock to graze land used by Palestinian shepherds and farmers. All Israeli settlements are widely condemned by the United ​Nations and many European countries, among others. Outposts like those founded by the Libis are illegal even under Israeli law, which requires advance approval to build in areas of the West Bank under Israeli administrative control. Yet the brothers receive broad Israeli government support as they race to expand. Editing by Aidan Lewis Our Standards: The Thomson Reuters Trust Principles. , opens new tab Suggested Topics: Middle East X Facebook Linkedin Email Link Purchase Licensing Rights