'Escalation is coming': Middle East on edge as new Israeli-US attack on Iran looms

US diplomats are preparing for embassy evacuations. Israeli fighter jets are conducting sorties on the Iranian border. The mood among Arab and US officials in the region who spoke to Middle East Eye is that it’s a question of when, not if, the US and Israel resume attacking Iran . With Iran threatening to retaliate by bombing trillions of dollars worth of US-linked data centres and AI facilities in the Gulf, along with energy installations and airports, the stage seems set for round two of the war. “An escalation is coming. Whether it’s before the US midterms or after is not relevant. The purpose of the escalation is,” Aaron David Miller, a former Middle East negotiator for Republican and Democratic US presidents, told MEE. Direct fighting between the US and Iran largely stopped after the signing of a fragile ceasefire in April, but the two never implemented a 14-point Memorandum of Understanding (MoU) signed in June to advance a settlement. The agreement was widely seen as giving Iran sweeping concessions that experts say the Trump administration simply cannot stomach. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters “There is a foundational gap, galactic in scope, that can’t be bridged. The Iranians are not going to change their position on the Strait of Hormuz, the nuclear issue or the Houthis to the extent that Trump needs in order to spin a win,” Miller said. Trump's emissaries are laying the ground for a return to fighting. “We are going to have to keep working at this to make sure there’s a regime change eventually,” Republican Senator Rick Scott, a key Trump ally, said in an interview with Fox on Thursday. Houthi strikes mark the end of Saudi Arabia's Yemen 'containment strategy' Read More » Mike Waltz, Trump's ambassador to the United Nations, told The Financial Times that the White House is ready for a prolonged conflict. "The president and the US Navy can maintain this blockade [on Iranian ports] for the foreseeable future,” he said in an interview released on Friday. A war that started over what the US claimed to be strikes aimed at crippling Iran’s nuclear programme has drifted into an all-encompassing battle over who calls the shots in the Middle East. For example, Iran wants to impose fees on vessels in the Strait of Hormuz. Iran and the US have conducted tit-for-tat strikes in the waterway. The US has imposed a blockade against Iran that is devastating its economy, while Iran is attacking vessels there, sending shipping rates soaring. At least 27 ships have been attacked this month alone, the highest number since March. The tensions between the two have also contributed to the collapse of a ceasefire in Yemen, where fighting between the Iran-aligned Houthis and Saudi-backed internationally recognised government is raging. Experts say a return to war may be inevitable because the status quo suits neither the Trump administration nor Tehran, but neither side feels weak enough to make concessions. 'US watches oil volumes, Iran watches the price' Iran and Trump are both watching the oil market and gleaning different lessons from it, Gregory Brew, an expert on energy and Iran at Eurasia Group, a geopolitical consultancy, told MEE. This week, energy firm Kpler published data showing that Middle East oil and product exports reached pre-Iran war levels last week. Some experts cautioned that the data is skewed towards a burst in activity, but more oil is coming out of the region from US allies, while Iran’s exports are choked by the US blockade. Saudi Arabia is exporting oil via the Red Sea, bypassing the Houthis, who control the Bab al-Mandab, with a pipeline to the Mediterranean. Meanwhile, Gulf states inside the Strait of Hormuz are using a shuttle service by which state-owned boats bring oil to larger tankers waiting in the Gulf of Oman. The US says its navy is escorting the vessels, but at a high cost. Gulf-Eurasian energy crunch pushes Europe to the edge of an inflationary crisis Read More » The rise in volumes has not lowered the price. Brent, the international benchmark, is up a whopping 43 percent since the MoU was signed with Iran. Diesel prices are up around 35 percent, while gasoline is up less than 10 percent. No one doubts that Iran’s economy is hurting. Inflation in September was up a staggering 90 percent, but Brew said that Iran’s rulers believe they can endure another round of fighting while the Trump administration will fold. “If the US is watching volumes in Hormuz, the Iranians are watching price. And they are pretty confident they can withstand pressure over a longer period of time than Trump can,” Brew, at Eurasia Group, said. “In a context where the US and Israel are bombing Iran again directly, we are certain to see more aggressive Iranian strikes on energy infrastructure. The US will also have fewer resources to manage this escort system,” he said. "Energy prices will stay elevated," he added. 'Devastating for the Gulf' Before the US and Israel attacked Iran in February, there was a lobbying dash from some Gulf states to stop it. During the war, Saudi Arabia and the UAE joined the US in striking Iran, but then Riyadh pivoted to supporting mediation. Reuters reported that the UAE paid Iran to stop attacking it. In round two, experts say, the Gulf will struggle to remain strategically relevant, although it will be on the front lines of Iran’s reprisals. The Gulf states faced thousands of drone and missile attacks from Iran after the US and Israel’s February attack. “From the Gulf perspective, this is going to be devastating,” Abdullah Baabood, an Omani academic and international relations expert, said. “Already we see serious economic problems in the Gulf.” From Syria to UAE, the race to bypass Strait of Hormuz is on Read More » Asharq Bloomberg reported Bahrain is expected to receive a bailout led by the UAE to shore up its collapsing foreign currency reserves. Qatar’s economy shrank 15 percent year-on-year. The IMF expects the UAE’s economy to shrink four percent. Saudi Arabia has had to cancel a prominent investment conference because of Houthi attacks. “The Gulf is hostage to a crisis that has no end,” Baabood said. “Qatar is trying to mediate. Oman has been pushed aside by Trump. The UAE, Kuwait and Saudi Arabia are very quiet. They just don’t know what to do. They can’t read Trump.” “Other than Israel, no one has real interest in a serious continuation of the war,” Marwan Muasher, a former Jordanian foreign minister and vice president for studies at Carnegie Endowment for International Peace, told MEE. The expectations of a return to war come against the backdrop of Israeli general elections next week. In his endorsement of Israeli Prime Minister Benjamin Netanyahu, Trump raised the stakes of fresh strikes, saying he wanted help to “finish the job” against Iran “unless they change their ways rapidly”. Experts say that given the war’s popularity in Israel, a return to fighting could help Netanyahu before the vote, or help him stay on as prime minister if the outcome of elections is indecisive. Baabood said that no one doubts Israel and the US’s ability to “devastate” Iran’s infrastructure, but that the Islamic Republic can still do “significant” damage to the Gulf. In an interview with Dropsite News this week, Major General Mohsen Rezaei, the secretary of Iran's Supreme National Security Council, left little doubt that Iran would attack Gulf energy sites if the US resumes the war. “If the US strategy is to prolong the war while using neighbouring countries’ energy infrastructure to offset the pressure arising from Hormuz and maintain the blockade of Iran, those governments should not assume they can participate in economic warfare against Iran without putting themselves at risk,” he said. Where is the pain for Donald Trump? One of the key questions in a second round of fighting is how well the Gulf states can defend against Iranian attacks that may spike energy prices further. A US Inspector General’s report in September said that the US faces "strategic inventory shortfalls” in key munitions. MEE reported in March that the US was already short of interceptors. That was before weeks of high-intensity fighting in the region. The Trump administration has repeatedly denied being short of munitions. Exclusive: Full text of the Mecca defence pact signed by Turkey, Saudi Arabia and Pakistan Read More » The Gulf states' vulnerability to Iranian drones has been crystallised by strikes from the Houthis on Saudi Arabia in recent weeks. The kingdom is reeling under the weight of Houthi attacks which have repeatedly targeted its airports and high-profile energy sites. At least 21 people have been killed in Houthi attacks on Saudi airports since the start of October, including religious pilgrims, according to the kingdom’s authorities. An attack attributed to militias in Iraq aligned with Iran hit the kingdom’s East-West Pipeline in September. "Continuing the war will only bring more difficulties to countries in the Gulf, and it’s clear it will not result in regime change in Iran. Meanwhile, Trump is suffering domestically because of rising fuel and food prices” in the US, Muasher told MEE. But Miller, now a senior fellow at the Carnegie Endowment for International Peace, said that Trump may feel less restraint than he is given credit for, particularly given his anger at Iran for stymying his plans for a quick victory earlier this year. “There is no cost-benefit analysis because Donald Trump is going to be OK. He may lose the House and maybe the Senate in midterms, but he will be OK. His family will be OK. He will build his presidential library,” Miller said. “Trump's urgency to end this thing is not evident. There is no accountability. Where is the pain for Donald Trump?” Copyright © 2014 - 2026 . Middle East Eye. All rights reserved. Only England and Wales jurisdiction apply in all legal matters. Middle East Eye ISSN 2634-2456