Oil and Gas

Moscow and Copenhagen trade blame for the incident as Denmark says it will not invoke NATO treaty.

Moscow has warned Denmark to avoid “reckless” action after a Russian frigate fired two flares that narrowly missed a Danish military helicopter.

Moscow’s ambassador in Copenhagen, Vladimir Barbin, on Tuesday insisted that “dangerous manoeuvres” taken by the Danish aircraft were to blame for the Baltic Sea incident.

The Russian diplomat told state news agency RIA Novosti that he had delivered a formal note demanding steps to prevent a repeat of the episode.

He said that the helicopter’s actions were provocative and condemned Danish attempts to call them routine, saying they raised “serious concern about the possible consequences of such recklessness”.

The Fennec helicopter was on a routine mission to photograph the frigate as it sailed in international waters off Denmark, the Danish defence command said. Ships typically use such flares as warning signals.

Denmark’s Defence Minister Jeppe Bruus told TV 2 News that one flare passed within a “matter of metres” of the aircraft, and accused Russia of “deeply unprofessional seamanship”.

When asked if Denmark would seek Article 5 consultations over the incident – invoking the NATO measure that considers an attack against one member of the bloc to be an attack against all of them – Bruus said the incident was being taken seriously, but “we are not there”.

Barbin said he had complained last year about what he called dangerous fly-bys and low hovering by a Danish helicopter over the Russian warship Vice-Admiral Kulakov.

Kremlin spokesman Dmitry Peskov declined to comment, saying he lacked details.

The Danish Straits – where most Danish incidents with Russia have taken place – are the Baltic’s main shipping gateway and a key oil route, including for Russian oil tankers.

Danish Prime Minister Mette Frederiksen called the incident serious but not surprising, describing it as part of a pattern of intensifying Russian hybrid warfare against Europe and testing NATO.

‘Fear and discord’

“Russia wants to sow fear and discord,” Frederiksen said, calling for closer unity and stronger defences for Denmark and Europe.

Russia denies carrying out hybrid attacks in Europe. However, the potential for the war in Ukraine to escalate and entangle Europe’s NATO member states is rising.

A spokeswoman for Russia’s Foreign Ministry later on Tuesday warned Western politicians and diplomats to “soberly” assess ⁠the risks of travelling to Ukraine, following a Russian drone strike on a rail line on which a train carrying former British ⁠Prime Minister Boris Johnson ⁠and former Swedish Prime Minister Carl Bildt had passed minutes earlier.

Rail hubs ⁠and transport infrastructure serving Ukraine’s ⁠military are legitimate ⁠targets, she said, and Russia warned foreign diplomats in May to leave ‌Kyiv because of strikes on Ukraine’s military-industrial ‌complex.

Demonstrators burn tyres and block highways as protests over increased fuel prices grip Syrian cities.

Protests have erupted across several cities in Syria after the government increased fuel prices, with demonstrators blocking a main highway for several hours.

The government raised prices on Sunday by up to 40 percent on diesel and 28 percent on petrol, in what it said were temporary increases caused by a sharp rise in the global cost of securing fuel.

Syria’s government also cited an overhaul of the critical Baniyas refinery for higher prices, saying it will raise capacity from 80,000 to 130,000 barrels per day.

Protests were reported in Hama, Khan Sheikhoun and Maarat al-Numan. Footage published by Al Jazeera shows crowds gathering on the street and burning tyres. The price increases also prompted fierce debate on social media.

The country is currently producing about 102,000 barrels of oil per day, while it needs about 325,000 barrels per day for domestic consumption and is relying on imports to make up the difference, Syrian Energy Minister Mohammed al-Bashir said on Saturday.

The Ministry of Energy said it would continue to review prices as global market conditions change and would work over the long term to expand refining and storage capacity, according to the state-run Syrian Arab News Agency (SANA).

Syria’s fuel supplies are key to the country’s economic recovery as it seeks to rebuild after 14 years of war.

Prices spiked as attacks on oil tankers escalated in the Middle East.

Oil prices have increased by four percent, with benchmark Brent crude hitting $105 a barrel after the biggest rise in attacks on shipping since the Iran war began spurred trader concerns about further supply disruptions.

Brent crude futures were up $4.05, or four percent, at $105.26 a barrel by 1215 GMT on Thursday. United States oil topped $100 a barrel for the first time since May, as West Texas Intermediate crude futures CLc1 rose $3.99, or 4.15 percent, to $100.04.

Brent prices have surged by more than 30 percent from lows touched in early August, as a permanent agreement between the US and Iran to cease attacks never materialised and fighting resumed.

Iran-aligned Houthis seized control of Yemen’s port of Mocha on Thursday, further threatening Red Sea traffic, while Gulf traffic remains restricted through the Strait of Hormuz as tanker attacks in the region have intensified in recent days.

“The recent run-up in prices lays bare the market’s approach: this conflict will last longer than anticipated even a month ago, let alone at the beginning of the summer. If oil supply and exports are diminished, the oil balance remains tight and prices remain elevated,” PVM analyst John Evans said.

Iran said it had attacked 10 ships near the Strait of Hormuz on Wednesday, after the US hit five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.

While fears of prolonged and more severe supply disruptions in the Gulf have lifted Brent above $100, analysts say the durability of the rally will hinge on China.

Chinese demand

China, the world’s largest crude importer, has stepped up purchases in recent weeks after months of subdued demand, boosting physical crude markets, ING analysts said in a note.

If Chinese buying continues to recover, it could amplify the impact of any supply disruptions and drive prices higher, while a pullback in imports could temper market gains, ING said.

“For months, the bearish case rested on soft Chinese demand,” said David Jorbenaze, global oil market lead at commodities information provider, ICIS.

Rising oil prices have worsened worries about inflation and cranked up pressure within the bond market, helping to lower stocks again on Wall Street.

The S&P 500 fell 0.6 percent and is on track for a fourth straight loss.

The increase in oil prices has pushed the price for a gallon of regular petrol to an average of nearly $4.28 across the US, according to the American Automobile Association. That is not only costing more at the pump but also through higher prices for all kinds of products that move by truck to store shelves.

Following Thursday’s reports, traders are betting on a close to 70 percent chance the Fed will raise the federal funds rate at its meeting next week. That’s up from the 61 percent probability seen the day before, according to data from CME Group. That’s also despite President Donald Trump’s consistent lobbying for interest rates to go lower rather than higher.

Ukraine launches one of its deepest strikes to date, targeting gas plants in Russia’s Arctic region.

Russian forces have launched attacks across Ukraine, killing at least seven people, according to Ukrainian officials, as Kyiv claimed responsibility for a drone attack that set off a fire at a natural gas plant deep in Russia’s Arctic region.

Four people were killed in a Russian attack in Mykolaiv in southern Ukraine overnight on Thursday, while three were killed in a drone attack on a shopping centre in the northeastern city of Sumy, according to Ukrainian authorities.

Heorhii ⁠Reshetilov, the acting governor of the Mykolaiv region, said the Russian strikes there hit both civilian and industrial infrastructure, killing two men and two women. At least 19 others were wounded, he said on Telegram.

The attack in Sumy left at least 14 people wounded, according to Oleh Hryhorov, head of the Sumy Regional Military Administration. Three of the victims were children, he said on Telegram.

The Russian Ministry of Defence confirmed the attack in Mykolaiv, but said it targeted a drone warehouse. The ministry said it also hit the Ukrainian port of Chornomorsk and two vessels near Odesa on the Black Sea.

The targets of the strikes were being used for military purposes, the ministry claimed.

The attacks came after Russian authorities said Ukrainian forces had launched a drone attack on the country’s Yamal-Nenets region, which is located some 2,800 kilometres (1,700 miles) from the Ukrainian border.

Dmitry Artyukhov, the region’s governor, said the attack targeted an industrial facility in Novy Urengoy. The attack was repelled, but falling debris from the drone caused a fire, he said on Telegram.

“The main thing is that there were no deaths or injuries. The extent and nature of the damage are being determined,” he added.

Artem Zhoga, the Kremlin’s envoy to the Urals, said Wednesday’s strike was the first ever to hit the Arctic part of the region.

Ukraine’s Special Operations Forces (SOF) confirmed the attack in a series of posts on X.

“For the first time! Deepest strike of the war: Ukrainian SOF hit critical russian plants more than 3,000 km away,” it said. “Ukraine’s Special Operations Forces carried out the deepest strike inside russia since the beginning of the full-scale war.”

In the posts, the Ukrainian force claimed it “successfully struck” two gas plants, Novy Urengoy and Purovsky.

“Until today, the area was considered a safe rear zone for the aggressor,” it added.

The Ukrainian force said the facilities play a key role in Russia’s gas industry, processing large volumes of condensate from gas fields across the Yamal region, processing millions of tonnes of condensate per year.

Gazprom used ⁠to export gas from Yamal as far as Western Europe ⁠until relations broke ⁠down following the start of Russia’s war in Ukraine in 2022.

It estimated the region’s gas resources at ‌26.5 trillion cubic metres as of 2020, enough to cover global demand for more than ‌six ‌years.

Ukraine has escalated its long-range strikes on Russia in recent months, in retaliation for daily Russian bombardment of Ukrainian towns and cities.

Earlier this month, Ukrainian President Volodymyr Zelenskyy said his country’s drones would make Russian airspace “completely unsafe” for the duration of the war.

Tehran has threatened “serious consequences” for South Korea if it interferes in the US-Israel war on Iran.

The warning comes amid reports that Seoul is mulling contributing to the US naval blockade of the Strait of Hormuz passage, which has hampered Iran’s oil exports.

In a statement posted on X on Monday, Ministry of Foreign Affairs spokesman Esmaeil Baghaei said Iran and South Korea had more than 64 years of diplomatic relations based on mutual respect and that Tehran values that friendship.

However, if South Korea joins the United States in its military actions against Iran at a time when the country is defending itself from what he called US aggression and “war crimes against women and children”, then there will be consequences, he warned.

Baghaei threatened that Iran would regard any military presence or participation in operations by another country in the Gulf and the Strait of Hormuz “would inevitably be regarded as direct support for the aggressor and would have serious consequences”.

“No sovereign and responsible country should succumb to US pressure and intimidation and become complicit in acts of aggression and horrific crimes against the great Iranian nation,” he added.

Seoul did not respond directly, but a Ministry of Foreign Affairs statement on Monday said it is communicating with the international community over the situation in the passageway.

Here’s what we know about how South Korea is getting roped in:

Why is South Korea involved?

Seoul, a close ally of Washington, has been under pressure from US President Donald Trump.

The issues began in mid-August, when Trump revealed in an interview, and later online, that he had spoken to South Korean President Lee Jae Myung and asked that Seoul give “a little hand” in the war on Iran.

According to media reports, the two leaders had spoken over the phone on May 17.

Seoul said, “No, thanks!”, according to Trump’s message on social media.

However, as South Korea now knows, saying no to Trump has repercussions.

On August 16, Trump announced that the US would significantly scale back joint military drills it holds annually with South Korea – the evening before they were scheduled to begin.

The Ulchi Freedom Shield (UFS) exercises are meant to sharpen Seoul’s readiness in case of a North Korean attack. They usually last for more than 11 days but were reduced to five.

In a post on his Truth Social site, Trump claimed the drills were “costly” and that they send a “hostile” signal to North Korean leader Kim Jong Un, with whom he is trying to build a relationship. South Korean Foreign Minister Cho Hyun said in parliament there was no warning from the US.

Trump also questioned why South Korea would refuse his request when thousands of US soldiers are stationed on the Korean Peninsula.

The US also cancelled another military exercise scheduled for September, although South Korea’s military revealed it received a notification much earlier in June, with Washington citing constraints due to the war on Iran.

How has South Korea responded?

President Lee, a liberal who pushes for a dialled-down defence posture, has opted to negotiate. His office earlier released statements saying it hopes for “meaningful dialogue” with Trump.

South Korea’s Yonhap news agency reported on Monday that Washington has, however, “ratcheted up pressure” on Seoul.

On Friday, a South Korean presidential official told Yonhap that Seoul could consider a military contribution to international measures seeking to free up navigation in the passageway as long as it does not affect the country’s defence readiness.

South Korea is looking at various options, the official said, including possible cooperation with France, the United Kingdom and other allies on sending noncombat and search-and-rescue forces.

The South Korean military has also started reviewing assets and troops that could be deployed, including maritime patrol aircraft, explosive ordnance disposal teams and unmanned mine detection and clearing systems, he added.

Such a move would be unpopular. The opposition has spoken out against a possible deployment, as have some within Lee’s ruling Democratic Party. Many South Koreans have also protested against the US-Israel war on Iran.

What is the history of US-South Korea relations?

South Korea became one of the US’s closest allies after Washington backed Seoul against Pyongyang in the Korean War of 1950.

The US supported Seoul’s economic and military growth in the years after. Under a treaty, some 29,000 US soldiers have been stationed permanently on the Korean Peninsula since the end of the war. Seoul has also relied on US defence might to deter nuclear-armed North Korea.

In return, South Korea supported several US wars, including the Iraq War, and is designated an important non-NATO ally.

In 2025, however, Washington imposed a 25 percent tariff on the country, testing relations. Seoul opted to negotiate rather than retaliate, leading the US to lower tariffs to 15 percent.

Many South Koreans were also alarmed after hundreds of South Koreans were arrested in Immigration and Customs Enforcement (ICE) raids on a Hyundai plant in Georgia in September 2025.

Last October, Trump travelled to Seoul in a historic state visit, and earlier this year, President Lee visited the US. Lee is also trying to resume dialogue between Washington and Pyongyang.

How is South Korea being affected by the US-Israel war on Iran?

South Korea is facing an economic crisis. The country relies on the Gulf supplies via the Strait of Hormuz for 60 to 70 percent of crude imports, meaning supply is being severely hit. The war has led to soaring inflation, causing the Korean won to fall to a 17-year low.

Seoul therefore has an interest in freeing up the strait. However, under Korean law, the government will require parliament’s approval before a military deployment, although some governing party members could oppose it.

Oil prices are rising to nearly a six-week high amid a wave of strikes between the United States and Iran in the Strait of Hormuz, through which roughly a fifth of the world’s oil supply travels during peacetime.

On Monday, Brent oil futures, the global benchmark, rose to hover around $97 a barrel — up 9 percent over the last five days and 19 percent over the last month. Monday’s market moves are approaching the highest point since July 24th, when prices topped $97.93.

US West Texas Intermediate crude similarly rose to $92.27 a barrel, up 79 cents, also a near six-week high.

In recent days, strikes escalated in the Strait of Hormuz. The US hit three Iranian oil tankers on Saturday, while Iran’s Islamic Revolutionary Guard Corps (IRGC) said it had struck three tankers and three US-linked vessels in other areas.

“This is a reflection of continued conflict and exchange of fire. The supply deficits globally are persisting, and there is little end to these shortages,” Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security (CNAS), told Al Jazeera.

On Monday, Saudi Aramco’s Jizan facilities were struck for the second time in the last month, according to reporting from the Financial Times that cited two people familiar with the matter.

“The fact that a Saudi refinery in Jizan was hit, possibly delaying its return to production, didn’t help,” Ziemba added.

Amid increased strikes, there’s less traffic in the Strait of Hormuz, with an average of 10 commodity ships crossing the vital chokepoint each day over the last 10 days, according to Kpler, a data analytics platform.

“Crude went back down to what the pre-war level was in early July. Then it increased again, and then it reduced again, and now it’s increasing again on this weekend’s exchange plus the Aramco attack,” Arif Gasilov, a partner at the Gasilov Group, an energy advisory firm, told Al Jazeera.

“I would say that you might eventually see an inflection point, depending on how long this keeps going on, where a ceasefire doesn’t move the market at all, maybe by just a dollar or two.”

US consumers pinched

US consumers are feeling the impact of heightened oil prices at the petrol pump. The average price for a gallon (3.78 litres) of petrol has jumped 7 cents over the course of a week, reaching $4.15 nationally on Monday, up from $4.08 this time a week ago, according to the American Automobile Association (AAA), which tracks daily petrol prices.

That’s up from $4.04 this time a month ago and $2.98 from February 28th, when the US and Israel first struck Iran, marking a 39 percent increase since the war began.

Last week, diesel prices hit all-time highs at $5.85 per gallon.

“US diesel prices have never been this high, and now the countdown starts for the trickle-down to everything consumers buy… record diesel will start funnelling down into the economy,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a post on the social media platform X.

Prices have continued to climb since, with average prices on Monday topping $5.90 per gallon.

“Markets are pricing in longer disruptions. It continues to be in product markets where the biggest disruptions lie, though, including diesel,” Ziemba added.

Those price gains are weighing on Americans, who have spent an average of $764.59 per household on fuel since the war began. That’s $418.82 more than usual, according to Brown University’s Watson School of International and Public Affairs.

Ahead of the US’s September 5-7 Labor Day weekend, the unofficial end of summer and a popular time for US travel, AAA forecasts showed a 20 percent increase in flight costs compared to the same weekend last year.

Ahead of the midterm elections, the economy is emerging as a key issue for US voters — and a potential warning sign for Republicans. Polls show voters souring on President Donald Trump’s handling of the economy, with his economic approval rating falling to a new low in a recent Financial Times poll. Just 17 percent of Americans approve of his handling of the economy.

An Economist/YouGov poll similarly found that 39 percent of Americans believe Democrats are doing a better job handling the economy, compared with 32 percent who said Republicans are.

China pressures

Southeast and East Asian markets rely more heavily on imports travelling through the Strait of Hormuz directly than the US, but Beijing has moved to insulate itself from the disruption by turning to domestic sources, including its strategic petroleum reserve (SPR).

“China has been managing this situation successfully since the beginning of the war. We know that China has many domestic resources, despite rising oil prices,” John Gong, an economics professor at the University of International Business and Economics, told Al Jazeera.

“China has been conserving its oil and gas consumption for quite some time now. China was prepared for these challenges,” Gong said.

He also stressed that China’s close relations with Russia give Beijing another source of supply, with Moscow able to provide nearly half of China’s daily oil needs.

China has also begun tapping into its SPR while reducing its reliance on imports, as Beijing accelerates a broader shift towards alternative energy sources and vehicles that require little or no oil to operate.

“We have national strategies focused on transitioning to clean energies like solar and green power,” Gong said. “When we look at the vehicles purchased in China, more than 50 percent of cars sold on the Chinese market are electric.”

The global ratings agency has also maintained the country’s sovereign rating at AA.

Fitch Ratings has removed Qatar from “Rating Watch Negative” while maintaining its sovereign rating at AA amid the US-Israel war on Iran and the Strait of Hormuz blockade.

The global ratings agency announced the decision on Friday, citing reduced risks to the country’s liquefied natural gas (LNG) facilities since March.

The agency, however, kept a negative outlook on the rating, citing ongoing risks surrounding the movement of gas exports through the blockaded Strait of Hormuz.

“The impact of the war on the credit profile will take longer to discern,” the agency said in a statement.

Qatar, one of the world’s largest gas exporters, continues to face export disruptions and shortages caused by damaged energy facilities during the war on Iran, which began six months ago.

Earlier this year, credit agencies S&P and Moody’s also affirmed Qatar’s ratings, noting that the country’s sizeable financial cushion helps protect it from the economic impact of the war.

The global energy order is changing.

US President Donald Trump celebrated on Truth Social what he called the “biggest oil deal in history” – a 100-year concession on 17 oil fields in Venezuela that would secure 65 billion barrels of oil.

Around the same time, QatarEnergy informed Edison, one of its biggest European customers, that force majeure on its liquefied natural gas (LNG) deliveries would continue until early November. Five more cargoes were cancelled, taking the total to 29, or about 3.8 billion cubic metres of gas.

The contract has run since 2009 and normally covers roughly a tenth of Italy’s annual consumption. Edison has kept supplying its customers by finding replacement cargoes elsewhere, including in the US.

For decades, the bargain between Washington and the Gulf was clear. The US protected the region and kept its sea lanes open; Gulf producers supplied the energy on which the global economy depended and settled their sales in dollars to benefit the US economy.

That bargain has been turned on its head. America no longer simply protects Gulf energy. It competes with it, and increasingly profits when the Gulf cannot deliver due to insecurity.

Six months of war have reportedly impacted Qatar’s LNG exports significantly. Other Gulf countries like Kuwait, Saudi Arabia and the UAE have seen a substantial drop in oil exports as well. Meanwhile, US oil and gas have moved into the space left behind, with US energy giants raking in record-high profits.

It is important here to distinguish between the US as a government and the dense network of private interests that operates around it. Washington wants strategic leverage over Iran and continued influence over the Gulf states. Energy companies want access to reserves, favourable regulation, profitable prices and new customers. Trump brings the two together under the banner of energy dominance. State power opens the door; private capital walks through it.

Israel adds another layer. Chevron operates its two main offshore gas fields, owning almost 40 percent of the Leviathan gasfield and 25 percent of the Tamar gasfield. Leviathan is expanding after a $35bn agreement was signed last year to increase exports to Egypt.

Israel is therefore not an independent energy rival to the US in the way Qatar is. Its growing role as an Eastern Mediterranean gas hub is tied to a US operator and fits comfortably within a US-backed regional system linking Israel, Egypt and Jordan.

Chevron is the thread running through much of this story. It has major interests in US production, controls Israel’s most important gas assets and is positioned to expand in Venezuela. This does not mean Chevron determines foreign policy. It does show how easily the exercise of American power can translate into commercial opportunity for American companies.

Israel is also determined not to let the confrontation with Iran end on terms it considers not to be in its interest. The US-Iran memorandum of understanding signed in June fell well short of Israeli war aims. Israel said it was not bound by all its provisions, insisted on freedom of action in Lebanon and briefly resumed attacks while the US was trying to sustain negotiations.

For Israel, ceasefires have tended to be pauses, not settlements: opportunities to regroup while preserving the option of striking again. The reasons are chiefly strategic. Israel wants to prevent Iran from rebuilding its nuclear, missile and regional capabilities, while Israeli leaders fear accepting a deal and looking weak ahead of elections.

The consequences of Israel pushing for continuous conflict align with US energy interests. Continued pressure on Iran keeps the Strait of Hormuz insecure, Gulf exports vulnerable and risk premiums for energy transport high. Israel and US energy companies do not need to be following a common plan for their interests to reinforce one another.

Price is where the argument becomes clearest. Trump talks constantly about cheap oil, but US producers cannot prosper if it becomes too cheap. A Dallas Federal Reserve survey found that US companies needed an average price of about $43 a barrel to operate existing wells and $66 to drill new ones profitably. The two main Permian basins sit at roughly $61 to $62.

Trump therefore needs a narrow band: oil cheap enough to contain inflation, but expensive enough to keep shale, fracking and export investment alive. Gulf insecurity helps maintain it. The disruption need not be catastrophic. It only has to keep prices at a point where the next American well makes economic sense.

This may help explain the attraction of a no-war, no-peace outcome. A full regional war could close Hormuz, send prices soaring and threaten Chevron’s Israeli operations. A durable settlement would remove the risk premium, restore confidence in Gulf supply and limit Israel’s freedom of action.

Managed insecurity sits conveniently between the two: enough restraint to protect US-linked production, but not enough diplomacy to make Gulf energy entirely dependable again.

Israel keeps Iran under pressure. Washington retains leverage over its allies. US producers gain customers and commercially supportive prices. The danger lies in the convergence: Several powerful actors now have something to gain from preventing the crisis from reaching a final resolution.

The Gulf still holds vast reserves and enjoys production costs US companies cannot match. But reserves alone no longer decide market power. Reliability does. Only an estimated 3.5 to 5.5 million barrels a day can bypass Hormuz through Saudi and Emirati pipelines. The rest remains exposed to a single point of failure, despite decades of arms purchases, foreign bases and security guarantees.

The greatest threat to the Gulf’s energy future is not depletion. It is that customers learn to live without it. Every delayed tanker strengthens the case for an Atlantic alternative. Every Qatari cargo replaced by US LNG creates a relationship that may endure long after the war.

US power once rested partly on protecting the flow of Gulf energy. It now rests increasingly on replacing it.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

Venezuela’s National Assembly voted to back the 65-billion-barrel oil deal, despite no details being publicly released.

United States Energy Secretary Chris Wright is set to travel to Venezuela, after the South American country has approved a deal that will see the US seize effective control of a large portion of its oil reserves.

An anonymous US official told reporters that Wright will travel to Venezuela on Tuesday, as the administration of President Donald Trump presses forward with the controversial energy deal.

“First and foremost, it furthers the national interest of the United States,” the official said, adding that it is “critically important” for the US to be able to “to buy oil at cost reliably”.

Details are still emerging about the arrangement, likened by critics to deals imposed by colonial powers.

Still, the interim government of Venezuelan President Delcy Rodriguez has defended the agreement as a boon to her country’s beleaguered economy. The National Assembly, led by her brother Jorge Rodriguez, voted to back the measure on Tuesday.

“Support for the binational energy treaty between the Bolivarian Republic of Venezuela and the United States of America … is approved,” Jorge Rodriguez said.

But even within the National Assembly, there was pushback. Some opposition lawmakers abstained from the vote and denounced the fact that the terms of the agreement have yet to be published.

“We need and are obliged to know what is written in the fine print,” lawmaker Luis Emilio Rondon said, calling for “the full and complete text of what has been agreed”.

While details about the arrangement are still emerging, the deal is slated to give the US access to 65 billion barrels of proven oil reserves in Venezuela, about one-fifth of the country’s total.

As part of the deal, the US is expected to enter into a partnership with a private company to extract fuel from 17 large Venezuelan oil fields. The lease over the oil fields will run 100 years, according to reports.

The White House confirmed on Monday that it is partnering with North American Blue Energy Partners (NABEP), helmed by Venezuelan businessman Alejandro Betancourt who is a former ally of the late Venezuelan President Hugo Chavez.

The agreement would create a new company, wherein the US Defence Department would take a 35 percent ownership stake and the State Department would have the right to buy 20 percent of the oil produced at cost.

Betancourt has faced criminal investigations for alleged money laundering in Spain and Switzerland.

But a US official who spoke anonymously defended the partnership, arguing that Betancourt is not facing any criminal charges in the US.

“I’m not nominating anyone for sainthood here,” the official said. Instead, the official framed the deal as “a geopolitical opportunity to secure fields that primarily had largely been under the influence of Chinese and Russian companies”.

Asked about the possibility of democratic elections in Venezuela, the official said they were not feasible in the immediate future.

Periods of transition, the official added, “almost invariably requires you to work with elements of the existing structure, even as you are creating a new one”.

Separately, oil giant Chevron is expected to sign an agreement to expand operations in Venezuela on Wednesday.

Venezuela’s energy sector has become dilapidated, with critics blaming heavy US sanctions and government mismanagement.

While the Trump administration has pushed for greater international participation in Venezuela’s oil sector, some companies have expressed scepticism about investing there.

The 65-billion-barrel oil deal was announced on August 27 in a post on Trump’s Truth Social platform.

His administration has exercised increasing influence over Venezuela’s government, since it launched a January 3 military operation to abduct and imprison Venezuelan President Nicolas Maduro.

Trump and Maduro had frequently clashed. In the wake of Maduro’s abduction, Trump backed the socialist leader’s vice president, Rodriguez, to take over Venezuela’s government, holding her up as a model of cooperation.

Six months into the war on Iran, the largest US oil companies have posted their biggest profits since 2022, selling less oil at far higher prices. But the conflict is also putting their longstanding Gulf investments at risk, exposing the industry’s uneasy balance between wartime gains and mounting geopolitical vulnerability for investors worldwide.

Since the war began on February 28, Brent crude has risen about 22 percent, from $72 to $88 a barrel.

The Strait of Hormuz – through which one-fifth of the world’s oil and natural gas was shipped before the war – remains largely closed to commercial traffic, though Iran and Oman agreed last week on a temporary maritime route. Iran says the strait will not fully reopen until the United States fulfils its commitments under a lapsed interim peace deal, leaving longer-term security and management arrangements unresolved.

In the absence of a lasting resolution, the disruption is likely to continue supporting higher energy prices and creating windfalls for producers, despite placing energy companies’ regional assets and future projects at greater risk.

Rahul Choudhary, vice president of Upstream Research at Rystad Energy, an independent energy research company, said the conflict has already reduced the amount of oil and gas US energy firms are drawing from the Gulf region.

“Overall we expect US companies’ share of gas supplies [from the region] to fall by around 40 percent this year compared to last year [and] the share of oil supplies to drop by 30-35 percent,” he told Al Jazeera.

While higher commodity prices have helped offset the immediate financial impact, Choudhary said prolonged disruption is likely to delay major projects and weigh on the future growth plans of US oil and gas companies with a presence in the region.

Who has profited?

The surge in the oil price since early March, when Iran first closed the Strait of Hormuz, has delivered a windfall for oil companies, but gains have been tempered by challenges in the Gulf.

Chevron has limited exposure to Arab Gulf supply disruptions, with the region accounting for just 5 percent of its total global output. The group reported its highest quarterly profit in six years of $12bn in adjusted earnings on July 31.

ExxonMobil, by contrast, has been far more exposed to disruption in the Middle East, with the closure of the Strait of Hormuz and Iranian attacks on US-linked infrastructure in the region affecting its operations in Qatar and the United Arab Emirates (UAE), which together account for 20 percent of its global equity upstream supply, according to Choudhary.

“We already saw in H1 [the first half of] 2026, the company’s upstream earnings dropped by around $1.3bn compared to H1 2025, due to lower upstream volumes from the Middle East. However, the shortfall was covered well by higher commodity prices,” Choudhary said.

The contrast highlights a broader divide between those US energy companies which have benefitted from tighter global supply – and the corresponding rise in the oil price – and those with assets, partnerships or operations in the Gulf at greater risk of disruption caused by recent attacks on energy facilities.

Where are US energy companies exposed in the Gulf?

The Gulf’s energy sector is dominated by state-owned giants such as Saudi Aramco, Abu Dhabi National Oil Company (ADNOC) and QatarEnergy.

Although these national oil and gas companies retain control over the region’s reserves and core infrastructure, US energy firms have carved out strategic positions across the region.

US companies generate revenue through stakes in production assets, joint ventures, production agreements, refining and petrochemical projects, as well as through long-term contracts to provide equipment, engineering and operational expertise.

ExxonMobil has some of the largest US commercial interests in the Gulf.

The company has been a major partner in Qatar’s LNG sector for decades, holding stakes in several QatarEnergy LNG joint ventures linked to the expansion of the North Field. The field is the Qatari section of the North Field-South Pars structure, the world’s largest natural gas field, which Qatar shares with Iran, where it is known as South Pars. ExxonMobil also holds an interest in the UAE’s Upper Zakum offshore oilfield alongside ADNOC.

Similarly, ConocoPhillips joined the North Field East (NFE) and North Field South (NFS) expansion projects with QatarEnergy in 2022 to increase export capacity at Ras Laffan.

The US group, Occidental Petroleum, has become one of the largest foreign producers in Oman, operating the Mukhaizna heavy oilfield, the country’s biggest producing oilfield. It also holds interests in UAE gas and pipeline projects.

Chevron maintains a smaller but strategically important Gulf footprint. Through Saudi Arabian Chevron, the company operates oil assets in the Saudi-Kuwait Partitioned Zone, including the Wafra field. In July, it said it was exploring potential routes to move Iraqi crude to Mediterranean export terminals, which could reduce reliance on the Strait of Hormuz.

Where have attacks on energy facilities taken place?

According to the Armed Conflict Location and Event Data (ACLED), a US-registered independent conflict monitor, Iran and Iran-backed groups in the region have carried out at least 172 attacks on nonmilitary infrastructure across the six Gulf Cooperation Council (GCC) countries since the US and Israel launched their war on February 28.

Energy infrastructure has been hit hardest, with oil and gas facilities, along with power plants and desalination plants, accounting for nearly half (48 percent) of all strikes on nonmilitary targets.

The UAE, Kuwait and Bahrain have suffered the highest number of successful strikes, with the majority aimed at oil and gas facilities.

Among the sites that have been struck are Kuwait’s Mina Abdullah and Mina al-Ahmadi refineries, the Bahrain Petroleum Company oil refinery, and ADNOC’s al-Ruwais Industrial City and the Habshan gas complex.

There have also been several strikes on Saudi Aramco facilities, most recently a drone strike on July 27 on the Abqaiq processing complex, one of the most critical nodes in Saudi Arabia’s oil infrastructure, processing more than seven million barrels of oil per day.

Nasser Khdour, Middle East assistant research manager at ACLED, said: “Oil and gas facilities, power plants and water desalination plants are likely to remain key targets for Iran because disruption to these sectors can increase economic pressure on Gulf states, while disruption to global energy supplies increases prices and pressure on the US during periods of escalation.”

In March, a drone attack close to the Saudi Aramco-ExxonMobil SAMREF refinery in Yanbu disrupted oil loading at the city’s Red Sea port. While the attack had only minimal operational impact, it highlighted the vulnerability of US-linked energy assets in the region.

Qatar’s Ras Laffan Industrial City, the world’s largest LNG export hub, which hosts major joint ventures between QatarEnergy, ExxonMobil and ConocoPhillips, also came under repeated attack in March, at one point forcing the plant to halt production entirely. In June, an explosion as a result of a “technical malfunction” on Qatar’s Barzan gas project, where ExxonMobil holds a stake, killed at least 13 people.

“In terms of gas assets being impacted, major blows have been [dealt to] companies [that are] part of LNG projects in Qatar: ExxonMobil and ConocoPhillips,” Choudhary said.

He added that ExxonMobil’s share of LNG supply from Qatar is expected to fall significantly this year to about four million tonnes compared with 13 million tonnes last year, while ConocoPhillips has also experienced reduced volumes to one million tonnes this year compared with 2.5 million tonnes last year.

The attacks on Qatar’s LNG infrastructure could have longer-term consequences. Damage to LNG trains at Ras Laffan could take years to repair, according to QatarEnergy, while delays to Qatar’s North Field expansion projects could push back planned supply growth.

“The attack on LNG trains 4 and 6 at Rasgas damaged roughly 13 million tonnes of capacity, which will take anywhere between three to five years to come back online with a total repair cost estimate of around $3bn,” said Choudhary.

He added that the second most impacted gas project has been the Shah gas project in the UAE, in which Occidental Petroleum has a 40-percent stake and where drone attacks in March caused a fire at the gas plant that halted operations.

The conflict has also affected ExxonMobil’s oil interests in the UAE, Choudhary said. Production from Upper Zakum, where ExxonMobil has a 28 percent stake, was reduced between March and May when export routes were disrupted, limiting the ability to move offshore crude.

Beyond the UAE, the most significant impact on US companies’ oilfield operations played out in Iraq. A drone attack hit the Sarsang oilfield in March, followed by an explosion at one of its storage facilities in April, together causing damage to the field.

Looking ahead, Choudhary said higher prices could support cash flows, but prolonged conflict risks could threaten future growth. ExxonMobil’s $10bn Upper Zakum and Qatar LNG expansions could face delays, while ConocoPhillips remains exposed through investments in higher-risk markets, including its planned 42-percent stake in BP’s Kirkuk operations in Iraq.

“For companies like Chevron and Occidental Petroleum, whose presence are in less volatile countries like Israel and Oman respectively, the impact of escalations will not be as severe, as we have not seen significant disruption in these countries,” said Choudhary.

US oilfield service companies in the Gulf

Oilfield service giants, including US firms SLB (formerly Schlumberger), Halliburton and Baker Hughes, provide drilling technologies, equipment and operational expertise across the Gulf, supporting Saudi Aramco, ADNOC and QatarEnergy.

For oilfield service companies, the outlook is mixed, according to Chinmayi Teggi, energy research analyst at Rystad Energy, a research group. While higher oil prices and energy security concerns could lift demand over time, near-term margins remain under pressure from higher logistical costs, supply-chain disruptions and delayed projects.

“For the Big Three (SLB, Baker Hughes and Halliburton), the conflict continues to weigh on regional revenues,” Teggi told Al Jazeera, adding that second-quarter Middle East revenues were down 8-10 percent compared with the previous year across the three companies, while higher oil prices meant revenues were higher in other geographies.

However, a recovery in suspended operations and production could help drive growth into 2027.

For US companies, therefore, the Gulf remains both an opportunity and a risk.

“The impact on US companies will depend on the extent of exposure and countries in which these companies are present,” Choudhary said.

Their investments have secured US access to some of the world’s most important oil and LNG projects, but the conflict has exposed the risk of operating in a region where energy infrastructure has become increasingly vulnerable to geopolitical conflict.

US President Donald Trump has repeatedly warned Iran against restricting access to the Strait of Hormuz, arguing that the waterway must remain open to global commerce.

But for companies with billions of dollars invested across the Gulf, the challenge isn’t just about keeping shipments moving – it is ensuring the infrastructure remains secure, they say.

US president says deal secures majority US control of more than 65 billion barrels of proven oil reserves in Venezuela.

The United States has struck a deal with Caracas that would give them control of some 65 billion barrels of Venezuela’s proven oil reserves, President Donald Trump has announced, while reviving the OPEC nation’s battered energy industry.

In a post on Truth Social, Trump said the “historic transaction more than doubles American oil reserves” and “will substantially lower gas prices for all Americans”.

“At my direction, Secretary of State Marco Rubio, and Secretary of War Pete Hegseth, working closely with Highly Respected Interim President of Venezuela, Delcy Rodriguez, and, through a partnership with private business, have secured majority US control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela, at no cost to the American Taxpayer,” Trump wrote.

Venezuela’s interim President Delcy Rodriguez welcomed the deal, which is expected to bring about $209bn to the state’s treasury.

The announcement followed weeks of negotiations over an agreement that would give American companies long-term access to a group of Venezuelan oilfields and guarantee the resulting crude supply to the US.

Venezuelan officials are preparing to sign agreements next week granting new oil exploration and production rights to a number of companies, particularly US firms.

Sources previously told Reuters news agency that a lease model was under consideration, with fields potentially auctioned to US producers, but the arrangement could face legal and constitutional challenges in Venezuela, where the state retains control over core oil industry activities.

The new deal would represent a dramatic expansion of Washington’s role in Venezuela’s oil industry as the Trump administration seeks to revive the country’s production and secure more crude for US refineries. Venezuela holds the world’s largest proven oil reserves, but produces only 1.25 million barrels per day, far below its potential after years of underinvestment, mismanagement and sanctions.

Trump did not disclose the structure of the agreement, the fields or companies involved, nor how the US would exercise majority control over the reserves.

Secretary of State Marco Rubio described the agreement as a win for both countries, saying on X that it would secure stable, low-cost oil for the US and help lower petrol prices.

For Venezuela, Rubio said the deal would bring nearly $100bn in private investment, support thousands of high-paying jobs and help rebuild the country’s economy.

It has been six months since February 28, when the US and Israel shocked the world by launching missile strikes on Iran, killing Supreme Leader Ayatollah Ali Khamenei and several senior Iranian officials in Tehran, as well as scores of children in a school in Minab, southern Iran.

US President Donald Trump then claimed the conflict would only last “four to five weeks”.

In the months since, the war has erupted on several other fronts, reaching as far as the Caspian Sea. It has triggered a global oil supply crisis as the US and Iran battle for control of the strategic Strait of Hormuz, through which more than one-fifth of oil and natural gas cargo transited.

And it has resulted in an estimated 8,000-10,000 deaths, as well as tens of thousands of injuries.

The conflict is also realigning the global order, experts say, as new alliances form and dominant ones show signs of crumbling.

Here’s what we know:

Has the US achieved any of its war objectives?

The US’s goals were not initially clear: officials first claimed the strikes were carried out in preemptive self-defence.

According to demands presented on the eve of the war, and a jumble of sometimes contradictory statements from Trump and senior US defence officials, they include the following:

Iran’s nuclear programme

Despite Trump’s claim that the US had “obliterated” Iran’s nuclear capabilities when it joined in at the end of Israel’s 12-day war on Iran in June 2025, the US and Israel again claimed in February that Tehran was just weeks away from developing nuclear weapons.

Repeated strikes on Iran’s nuclear sites during the war have likely caused vast damage to the facilities, but it is believed Tehran still possesses 440kg of highly enriched uranium, which could be used to make a weapon.

The Trump administration wanted Iran to hand over this stock to the US and to commit to zero enrichment of uranium going forward. Iran refused to do this, although at one point appeared open to the possibility of handing the stock over to a third country. Iran also insisted on retaining the capacity to develop a nuclear power programme, which requires much lower levels of uranium enrichment.

Later, Trump briefly floated the idea of US troops retrieving the stock by force – a potentially dangerous mission.

In the June 17 memorandum of understanding (MoU) signed by both sides, Iran agreed not to pursue a nuclear weapon – something it had always pledged anyway. The MoU unravelled as its vague wording led to disagreements about what it actually stipulated.

Clark Summers, a US military veteran and professor at Belmont Abbey College in North Carolina, said the US “can rightly assert that these ends have been achieved. Although for how long before Iran can rebuild is difficult to assess.”

But Iranian expert and professor at the Australian National University (ANU), Alam Saleh, disagreed, and noted that Iran’s nuclear power programme is still intact. “The US lost even before the war,” he said, adding that the effort also shows that Washington failed in last year’s 12-day war.

Regime change in Iran

On day one of the war – February 28 – the US killed Khamenei alongside several other senior officials. Trump, two days earlier, said regime change is “the best thing that could happen”.

As the US launched missiles, he also called on “Iranian patriots who yearn for freedom to seize this moment to be brave, be bold, be heroic, and take back your country”.

Iran’s political leadership has, however, remained largely the same under the new Supreme Leader Mojtaba Khamenei – the late ayatollah’s son.

Summers told Al Jazeera that the goal may have been “ad hoc” or improvised rather than well-planned. But “killing leaders does not mean strategic achievements, even if it’s a tactical success,” Saleh said.

Ending support for regional proxy groups

Iran’s “axis of resistance” is an umbrella comprising a number of armed groups around the region that it funds. This includes Hezbollah in Lebanon, the Houthis in Yemen, Hamas in the Gaza Strip, and several smaller groups in Iraq and Syria.

There are no signs that Tehran’s support for them has ended, and this demand did not appear in the MoU signed by the US.

Hezbollah went to war with Israel in Iran’s defence, and Iran has refused to negotiate an end to the war unless the Lebanon front is included. The Houthis, meanwhile, have launched a blockade on Saudi Arabia in the Bab al-Mandeb Strait, partly in support of Iran.

Iran’s ballistic missiles programme

Washington swore it would “raze” Iran’s missile facilities to the ground when it launched the war on February 28. The US also pledged to destroy Iran’s navy.

Trump has since claimed that about 82 percent of Iran’s missiles are gone and the navy is degraded.

In April, he also said that 158 Iranian naval vessels had been hit, while US Central Command (CENTCOM) has continued to announce dozens of strikes on command centres of the Islamic Revolutionary Guard Corps (IRGC).

Iran, however, has continued to fire missiles, most recently launching a long-range missile in July that killed three US soldiers in Jordan.

Furthermore, the demand for an end to Iran’s ballistic missiles programme was also absent from the July MoU.

Control of Iranian oil

In June, Trump said the US would seize and control Iran’s Kharg island, the heart of Iranian oil production.

To date, the US does not control any Iranian territory.

What have the US and Iran gained and lost during the war?

Besides the US demands at the start of the war, several other pressure points have emerged during the conflict.

Control of the Strait of Hormuz

Soon after the war began, Iran in effect closed the narrow but critical Strait of Hormuz, which passes through its territorial waters as well as those of Oman. Since then, shipping traffic has slumped from more than 100 ships per day to an average of about five.

To enforce this closure, Iran began striking vessels in the strait, the only route to the open ocean for Gulf oil and gas producers, which had not gained its explicit permission to pass through.

The US responded with its own naval blockade on Iranian ports in and around the strait. This is continuing.

Despite a large number of expletive-laden demands from Trump since then – many of them on social media – that Tehran reopen the strait, Iran has not budged. It is currently negotiating plans for the future of the waterway, through which more than one-fifth of the world’s oil and natural gas supplies were shipped before the war, with Oman.

As part of these negotiations, Iran announced this week that it has agreed to a shipping route, which it will partially control, with Oman.

While Trump has recently claimed that the US has “full control” of the strait and that it is open to vessels, shipping remains at an all-time low and Iran has continued to fire at any vessels trying to pass without its permission.

Iran sees the strait as its main piece of leverage in the war with the US, which Salah said, Iran views as an “existential threat”.

Economic impact

• Iran: The war’s impact on Iran’s economy has been severe. The Iranian rial has in effect collapsed. Food prices have surged amid the war, and the US blockade and renewed sanctions have hampered Iranian oil exports, with the blockade cutting oil revenue by at least $6bn. Tehran’s economy has long been battered by US sanctions, although the fragile ceasefire provided temporary relief. Iran’s Foreign Minister Abbas Araghchi said last week that economic pressure is a “rerun we know by heart” and that the country knows how to survive it.
• US: US consumers have also felt the pressure of the war at the petrol pump, making the conflict highly unpopular. A July poll by The Associated Press revealed that two-thirds of Americans are against the conflict. While many tend to forget there’s a war, Summers said, they do remember it acutely when petrol prices rise. In states like California, gasoline prices doubled. That anger will likely translate into a political backlash against Republicans in November’s midterms, experts say.

Relations with allies

• Iran: Iran’s targeting of US military assets as well as both military and nonmilitary infrastructure in neighbouring Gulf states and Jordan has not made it popular regionally, experts note. Iran has hit infrastructure in Qatar, the United Arab Emirates, Saudi Arabia, Jordan, Iraq, Kuwait, Oman and Bahrain. Those states have called this a violation of their sovereignty. However, Iran’s economic and political ties with China have held, as Beijing has managed a delicate dance by advocating against sanctions on Iran while refraining from becoming fully entangled in the conflict. Trade relations with Russia also remain strong.
• US: The US has faced reluctance from its NATO allies to back it up in this war. Despite being asked directly by Trump, they have refused to join the war. Spain and Italy, in particular, have highly criticised the conflict, while Germany, Israel’s strongest ally in Europe, has done the same. France rejected calls to send warships to enforce the blockade. Gulf allies, Pakistan and Turkiye have all similarly refused, while in Asia, Japan, Australia and South Korea all declined to get involved. Gulf allies are also likely weighing the fact that it is the US’s war on Iran which has caused them to become targets.

Military capabilities

• Iran: US experts say that claims Washington has degraded Iran’s military capabilities are correct. Several army bases have been struck while Iran’s ballistic missile stockpiles are down by about 82 percent, according to Trump. However, Iran is still launching missiles and, while nuclear facilities have been damaged, it still has possession of its enriched uranium stockpile. Experts point out that Iran likely has a bigger appetite for an atomic weapon now than before the war began. Tehran has also continued to produce and deploy its mass-produced, cheap Shahed drones. An estimated 1,221 military personnel were killed by April, although the real toll is likely higher.
• US: The US has lost 18 soldiers and more than 750 have been wounded. That’s “quite low”, Summers said. However, US media reports suggest the Pentagon has severely depleted stockpiles of some of its most powerful and most expensive weapons – particularly its Patriot defence missiles – something Washington denies. Those missiles are only produced in the dozens annually and cost millions of dollars each. In August, the US signed a $22.9bn deal with manufacturer Raytheon to boost Tomahawk cruise missile production from 60 to more than 1,000 annually.

Is there an outright ‘victor’?

Observers say there is not.

“Both of them have not achieved anything,” Saleh of ANU said, noting that the US has failed to translate military superiority to actual gains despite being a “superpower” fighting a “middle power”.

China and Russia are likely observing Washington’s weaknesses, making new military calculations in the event of a future conflict with the US, he said. That has implications for Taiwan, especially as the US has now deployed its last aircraft carrier in the Pacific to the Middle East. The shift leaves the US without an aircraft carrier in the Western Pacific, despite Washington’s previous strategic emphasis on the region.

“Iran surviving also does not mean it’s a winner,” however, Saleh said. “This might be a defeat for the US, but it’s not a victory for Iran either.”

The Iran war is settling into attrition, with no regime collapse and Gulf economies facing growing uncertainty

Analysts broadly agree the United States and Israel’s war on Iran will not see regime collapse in Tehran or a definite victory for Washington, but rather a dragged-out affair of stagnation and attrition.

The hope among the US leadership at the start of the war, which began after surprise Israeli and US attacks on February 28, was that mounting economic and military pressure on Iran would force a structural shift in Tehran. Six months on, it is clear this vision will not come about, and instead many are preparing for a protracted war and managed fallout.

Oil-dependent economies are still absorbing supply shocks after traffic in the Strait of Hormuz slowed to a trickle of pre-war levels following Iran’s attacks on shipping and a US blockade on Iranian ports.

The US military is still entrenched in a region that remains its most militarised in years. Although the war’s intensity has lessened since a memorandum of understanding (MoU) was signed by Washington and Tehran in June, there is no sign it will conclude, leading to continued uncertainty about the future.

Existing tensions, such as those between the Houthi rebels and Saudi Arabia in Yemen, look only set to increase as the war drags on. The influence of rival powers, such as those of India and China, remains stalled rather than stopped, with Beijing’s Belt and Road Initiative having already established itself within the Middle East and North Africa. All in all, the region remains in flux where formal alliances with outside powers no longer guarantee safety.

The defence agreement between Turkiye, Pakistan and Saudi Arabia recently signed in Mecca will likely be the first of many such military pacts agreed in the region.

“The war has just accelerated trends, but hasn’t really started anything that wasn’t already under way. The Gulf countries were already diversifying their economies,” Sanam Vakil, director of the Middle East and North Africa Programme at Chatham House, told Al Jazeera. “Many were already looking at broadening their defence partnerships beyond existing US security guarantees, as well as increasing their own defence capability.”

Israel, for its part, is still pursuing its regional project of “paramountcy”, HA Hellyer of the Royal United Services Institute said, despite its failure to bring Iran to its knees this year.

“There is no chance of the government in Tehran falling in the next six months,” Hellyer told Al Jazeera. “If everything were to theoretically stay the same … with just increased economic pressure, that could eventually cause a ripple effect that could lead to state collapse in Iran. But we’re talking years, not months, and everything is not likely to stay the same.”

The effective closure of the Strait of Hormuz and strikes on regional cities have hindered Gulf states’ plans to use oil revenues as an engine to diversify their economies and build on their reputations as a safe haven to encourage investors.

Shipments of oil, derivative products and liquefied natural gas (LNG) have been repeatedly and severely disrupted since the US and Israel launched their attacks on Iran in February.

Transit through the Bab al-Mandeb Strait, which saw attacks on shipping by the Houthis during Israel’s genocidal war on Gaza, became even more hazardous in July, when the Iran-allied Houthis declared a naval blockade of Saudi Arabia.

“The price of oil has increased broadly in line with the Gulf states’ difficulties in exporting it,” John Sfakianakis, chief economist at the Gulf Research Center, told Al Jazeera. “Is this going to go for six months? Is it going to go on for longer?”

Exacerbating the Gulf states’ difficulties is that, although the price of oil has risen, so has inflation. In addition to the economic difficulties the war has created, there is also growing pressure for Gulf states to invest more in defence.

For now, the majority of the states caught in the middle will look at ways of living with the turmoil and managing the consequences.

A top Iranian official says Iran and Oman have agreed on a new temporary route for shipping in the Strait of Hormuz, but insisted that the waterway will not reopen until the United States fulfils its commitments under an interim peace deal signed in June.

The remarks by Kazem Gharibabadi, Iran’s deputy foreign minister for legal and international affairs, came on Tuesday, after Iran and Oman’s top diplomats held talks in Tehran to finalise the details of a phased framework for managing the strait.

Iran and Oman, both coastal nations on the strait, have been in on-and-off talks for weeks about controlling traffic through the strategic waterway, which handled one-fifth of global oil and liquefied natural gas shipments before the US-Israel war on Tehran began in February.

Most ⁠shipping in the strait has been shut down since then.

Gharibabadi, speaking on state television, said Iran and Oman had agreed the new route’s entry “would be through our territorial waters, and part of the exit route would also be through our territorial waters”.

The transit corridor would be seven miles (11.3km) wide, he said.

“The agreed-upon transit route with Oman is a temporary route,” he added.

Earlier on Tuesday, Iran’s Foreign Minister Abbas Araghchi met with his Omani counterpart, Badr Albusaidi, in Tehran to discuss the temporary navigation corridor as well as a project to clear mines from the strait, according to a joint statement.

Albusaidi said on X he hoped the countries would “soon announce” the corridor, adding that “future management of the strait and a permanent solution will follow in due course.”

Technical talks are planned to develop a long-term arrangement, including mechanisms for information sharing and navigational and security services, according to the statement.

Mines in Hormuz

The Strait of Hormuz became a flashpoint after Tehran responded to the US-Israel war by closing the waterway. It then announced a new shipping route through its territorial waters, bypassing the internationally recognised Traffic Separation Scheme adopted by the International Maritime Organization (IMO) in 1968. Tehran said that route had been mined.

Then in June, when Iran and the US signed a Memorandum of Understanding (MoU) to end the war, Oman and the IMO announced a new transit corridor in the Strait of Hormuz – backed by the US – that hugged the Omani coast.

Iran said the so-called southern route violated the MoU and launched attacks on ships using the corridor, resulting in the collapse of the interim deal.

Diplomatic efforts towards a broader peace deal have since stalled, and passage through the strait remains dangerous. An oil tanker was disabled by an unidentified projectile on Tuesday near Oman’s Ash Shishah, close to the strait’s entrance, the United Kingdom’s maritime trade watchdog said.

Gharibabadi, in his comments on Tuesday, said Iran would not consider the strait open despite the agreement with Oman.

He also dismissed a claim by US President Donald Trump that all mines had been cleared from the strait’s international waters, saying it was “only aimed at calming the markets”. He warned that US mine-detection vessels would become “very good targets” if they entered the area.

Gharibabadi insisted the US must fulfil its commitments under the MoU – including sanctions relief and the release of frozen Iranian assets – if it wants a return to the diplomatic track.

He also urged countries to resist US pressure over sanctions on Iran.

Trump had announced last week the “most crushing economic operation ever” against Iran, and threatened sanctions against any country that does business with it.

“We are urging countries not to succumb to American pressure regarding the sanctions that Washington wants to impose on us,” Gharibabadi said, adding that Washington was “mistaken about its ability to enforce its sanctions against our neighbours”.

He said an earlier US sanctions campaign under Trump had failed to achieve its goals and predicted new measures would meet the same fate.

“The new American sanctions are doomed to failure, and we have our own methods to counter them,” he added.

US President Donald Trump’s administration has said it aims to sever “every” economic lifeline sustaining Iran in what officials have warned will be the toughest sanctions campaign ever seen.

The threat, if followed through, would mean putting China, Iran’s biggest trade partner, squarely in the crosshairs of US sanctions.

That would be a risky proposition for Washington due to the likelihood of severe blowback from Beijing – so much so that some analysts doubt that the Trump administration’s measures, set to be announced on Monday, will match its rhetoric in scope or severity.

While the Trump administration has yet to provide details about what it has dubbed “economic D-Day”, US officials have made it clear that Iran’s trade partners are in their sights.

In an op-ed in the Financial Times on Sunday, US Treasury Secretary Scott Bessent warned that countries fearful of breaking ties with Iran should not “discount the cost of testing Washington”.

“The president has created the conditions to leverage every agency, every authority and action many assumed we would never summon,” said Bessent, who is scheduled to unveil the sanctions in a news conference at 17:00 GMT.

Brett Erickson, a sanctions expert and managing principal of Obsidian Risk Advisors, said the Trump administration’s willingness to target China will be an indication of its resolve to mount a sustained economic offensive against Tehran.

“That is not a relationship you degrade lightly. If the United States decides to really bring China into the ring, it will be a serious indication that the United States plans to wage this economic war for a prolonged period of time,” Erickson told Al Jazeera.

“If they do not, it will be a tacit admission from the Trump administration that they do not believe economic hardship can seriously bring about a change in the Iranian position,” Erickson said.

Any US pressure campaign that excludes China would be necessarily limited in scope given the outsized importance of Beijing and Tehran’s economic ties.

China reported $9.96bn in two-way trade with Iran in 2025, a figure that does not include some $31.2bn in Iranian oil shipments, according to the US-China Economic and Security Review Commission.

China’s purchases of Iranian oil have been a particularly crucial lifeline for Tehran, accounting for about 90 percent of its oil sales, according to the US Treasury Department.

Until now, the Trump administration’s Iran sanctions regime has targeted only a handful of relatively minor China-based entities.

In April, the Trump administration sanctioned Hengli Petrochemical (Dalian) Refinery, one of China’s largest independent refineries, commonly known as “teapots”, over its alleged purchases of Iranian oil.

The Trump administration also imposed sanctions on four firms in Hong Kong in May, followed by measures in August targeting six China and Hong Kong-based shipping lines.

Washington has so far left Chinese financial institutions, widely viewed as a key node in Iran’s oil trade, untouched.

“Cutting off Chinese economic ties will be key to the success of any attempt to increase pressure on Iran. However, the United States won’t do it,” Jennifer Kavanagh, a senior fellow at Defense Priorities, a Washington-based foreign policy think tank, told Al Jazeera.

“If it does, China will retaliate and has the leverage to impose costs on the US,” Kavanagh said.

China has vigorously opposed US sanctions against Iran, arguing that economic pressure will not resolve the nearly six-month-long war.

In a statement on Sunday, China’s Ministry of Foreign Affairs said that Beijing remained “committed to promoting peace talks” and willing to “continue making efforts for the early restoration of peace and tranquility in the region”.

Iran, for its part, has threatened to retaliate against countries that support the US measures.

Mohsen Rezaei, the secretary of Iran’s Supreme National Security Council, warned on Saturday that any country that participated in sanctions would be considered an “enemy” and that “not a drop” of oil would leave the Gulf if Iran’s neighbours joined the US campaign.

Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin University of China, said Beijing would inevitably take countermeasures in response to any US sanctions and their intensity would depend on the “severity of US actions”.

“China maintains its desire to avoid conflict, but its bottom line cannot be crossed,” Wang told Al Jazeera.

For Trump, invoking Beijing’s ire would risk not only economic retaliation, but also unravelling efforts to stabilise US-China relations only weeks before the US president is due to host Chinese leader Xi Jinping at the White House.

Trump’s scheduled summit with Xi on September 24 would be their second face-to-face meeting aimed at lowering the temperature in US-China relations since Washington launched its war on Iran in late February, following Trump’s visit to Beijing in May.

Zichen Wang, deputy secretary-general of the Center for China and Globalization (CCG) think tank in Beijing, said neither Beijing nor Washington were likely to want Iran to define the upcoming summit.

“Unless the US measures become very broad or directly target major Chinese interests, both sides are likely to try to keep this dispute from overwhelming the wider agenda,” Wang told Al Jazeera.

“That said, Chinese restraint should not be read as an absence of response,” Wang said.

“Beijing has often avoided immediate rhetorical escalation, but when unilateral US actions have materially affected Chinese companies or other Chinese interests, it has shown a growing willingness to answer with practical countermeasures.”

While the Trump administration could potentially make it more challenging and expensive for China to continue its economic support of Iran, it is unlikely to be able to stop Beijing outright if it is determined to maintain ties, said Erickson of Obsidian Risk Advisors.

“US sanctions can absolutely force companies to de-risk in order to avoid exposure, but there will always be an entity willing to fill this role,” Erickson said, adding that Xi is unlikely to “merely stand by while Trump flexes the powers of American economic statecraft without flexing Beijing’s own in return”.

Though US officials have stated their intention to “collapse” Iran’s government with ramped-up sanctions, Erickson expressed doubt that the Trump administration will be able to achieve its war goals through economic pressure alone.

“Unless the Trump administration is willing to burn serious bridges and employ all remaining levers of economic warfare simultaneously, there is no reasonable assertion that can be made that it will be able to produce the victory that kinetic warfare could not,” he said.

The warning comes as US President Donald Trump threatens to isolate Iran economically, to weaken its government.

Iran has threatened to treat nearby countries as enemies and target their interests if they join a United States campaign to cripple its economy.

Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, issued the warning in a Saturday interview with state broadcaster IRIB.

“We’re telling all nearby countries not to join the US economic war. Otherwise, we will consider them as enemies,” Rezaei told IRIB.

His remarks come on the heels of escalating economic threats from the administration of US President Donald Trump.

On Wednesday, Trump announced his government would undertake the “most crushing economic operation” yet against Iran, as part of ongoing hostilities between the two countries.

The US and Israel have been locked in a war with Iran since February 28, when the two allies launched an initial volley of attacks against Tehran.

In addition to threatening Iran’s economy this week, Trump pledged “tremendous economic consequences” for any country that gives Iran “any type of lifeline”.

His Treasury secretary, Scott Bessent, echoed his threats the following day, saying, “You’re either with us or against us.”

In Saturday’s interview, Rezaei described Iran’s regional strategy as a three-stage sequence, which would start with efforts to de-escalate tensions with neighbouring countries.

“First we negotiate. Then, we try to separate them from America with pleasant language, because we are not really looking to expand the war,” he said.

Any countries that continue to side with the US would then be given time to reconsider, he said. “But in the third stage, we will definitely act.”

While the US has not stopped its military operations against Iran, Rezaei suggested that the Trump administration was betting that economic pressure would fracture Iranian society, forcing the war to come to an end.

“They hope that, if possible, they can break our unity with economic pressure and a group of protesters will take to the streets, and in a way, they will come to the aid of American F-35s,” he said, referring to a kind of military aircraft.

Negotiations to end the conflict have stalled in recent months, following the failure of a June 17 memorandum of understanding (MoU) that called for an “immediate and permanent termination of military operations”.

Control over the Strait of Hormuz, a major shipping lane off the coast of Iran, has become an enduring sticking point between the US and Iran.

Iran quickly moved to shut down traffic through the strait early in the war, sending the price of goods like oil and fertiliser skyrocketing.

Countries in the Middle East that were previously reliant on the strait for exports have started to pursue substitute trade routes.

But Rezaei warned that Iran would target those alternative oil-shipping routes out of the Gulf if regional states took part in the US’s plans of economic warfare.

Iran’s Ministry of Foreign Affairs on Saturday also decried the incoming US measures as an assertion of “extraterritorial sovereignty” over United Nations member states.

Tehran has also reportedly considered widening its target list beyond the Middle East, with media outlets reporting it could strike US allies in Europe who have supported Trump’s operations.

United States President Donald Trump has threatened to bomb Oman if it “gets in the way” of a peace deal between the US and Iran.

Oman is currently negotiating with Iran over the reopening of the critical Strait of Hormuz, while Iran has repeatedly stated that it will not speak directly to the US.

On Monday, as Iranian officials said they were close to announcing an agreement with Oman, a 60-day Memorandum of Understanding (MoU) between Washington and Tehran – which had provided for a period of peace talks but largely fell apart early on – expired with little hope for renewal.

This is not the first time Trump has threatened Oman, a US ally which has never entered into any direct conflict with the US. Oman, through whose territorial waters the contested Strait of Hormuz also flows, has positioned itself as a neutral party in the US-Iran war. Despite that, it has suffered a number of strikes by Iran, which has targeted US military assets and infrastructure around the region in retaliation for US-Israeli attacks.

Now, Trump is threatening to strike it as well.

Here is more about what Trump has threatened, and why.

What did Trump threaten Oman with?

Trump told US broadcaster Fox News on Monday that Iran should surrender, and claimed that his administration had opened a direct backchannel for talks with Iran’s Islamic Revolutionary Guard Corps (IRGC).

During the interview, he threatened to bomb US ally Oman if it “gets in the way” of US talks with Iran.

“If Oman gets in the way, we’ll bomb the s*** out of them,” he said.

An IRGC spokesman denied Trump’s claim of direct talks, telling Iran’s semi-official Tasnim News: “There are no talks taking place between IRGC officials and the Americans, and this lie by Trump is merely fantasies caused by the delusions and nightmares he has suffered as a result of defeat and desperation in the war.”

Has he threatened Oman before?

Monday was not the first time Trump threatened Oman over the course of the five-month war between the US and Iran. In May, he made a similar threat.

At a cabinet meeting on May 27, a reporter asked Trump what he thought about the idea of Oman and Iran jointly overseeing shipping through the Strait of Hormuz.

“ Would you accept a short-term deal that allows Iran and Oman to control the strait?” the reporter asked.

Trump replied with a seemingly offhand threat. “Nobody is going to control it. It’s international waters, and Oman will behave just like everybody else, or we will have to blow them up.”

While there was initial speculation that Trump might have misspoken and said “Oman” instead of “Iran”, the US State Department later shared the comment on social media, with a transcript of the quote that referred to the Arab country.

What is the context for all this?

For the past few weeks, Iran and Oman have been engaged in direct talks, facilitated by mediators in Qatar, to reach an agreement over how to manage maritime traffic through the Strait of Hormuz in the future.

While Iran had agreed to keep the strait open to shipping without charge for 60 days following the signing of the MoU with the US on June 17, this quickly fell apart as the two sides disagreed over who had ultimate control over the strait – in particular which routes ships should take. Towards the end of June, Iran launched strikes on a number of ships which had followed an Oman-issued route, approved by the US, rather than its own route, and the US restarted strikes on Iran for nearly two weeks.

Following that, Iran refused to talk directly to the US, saying it had violated the terms of the MoU which included a cessation of hostilities on all fronts, and began talks with Oman over the future of the strait instead. Iran also issued a list of new demands relating to the lifting of sanctions and a permanent end to US strikes before it would resume talks, it said.

On Monday, Tehran said the two countries have reached an agreement on a new shipping route in the strait and are now preparing a joint declaration.

Foreign Ministry spokesperson Esmaeil Baghaei said the proposed mechanism for control of the strait seeks to protect the interests of both Iran and Oman while allowing commercial shipping to pass through.

“This is the first time that a mechanism is being developed to simultaneously safeguard the sovereign rights of the two littoral states and ensure the safe passage of commercial vessels,” said Baghaei.

The Strait of Hormuz is a critical waterway through which one-fifth of the world’s oil and liquefied natural gas (LNG) supplies were shipped before the US-Israel war on Iran began on February 28. Roughly 130 ships sailed through the strait each day.

Iran closed the strait in early March, allowing only a few ships it deemed “friendly” to pass through the strait until it signed the MoU with the US on June 17. Since then, it has become the key issue holding up talks for a lasting peace plan to end the war on Iran.

The US, meanwhile, has established its own blockade on Iranian ports in and around the strait. Last week, it fired on a Panama-flagged cargo vessel it accused of attempting to reach Iranian ports and which, it said, had failed to follow orders to change course.

The crisis has triggered global energy shortages and the price of oil has soared. The price of Brent crude, the global benchmark, was about $66 a barrel just before the Middle East conflict began. Over the course of the war, the price has surged past $100 on several occasions, most recently on July 23. In March, the price rose as high as $119.

Global benchmark Brent crude futures rose to $91.22 a barrel on Tuesday, inching close to a three-week high.

What is Oman’s position on the Iran war?

Oman, which is known for its neutrality, has not publicly stated that it intends to join Iran in controlling the Strait of Hormuz. The US and Oman are close partners with a relationship stretching back nearly 200 years.

The two countries have multiple cooperation treaties, including security partnerships, a free trade agreement and a science and technology deal.

During the war, Iran launched multiple strikes on US military assets and energy infrastructure in neighbouring countries, including Oman.

Oman previously acted as a key mediator between Washington and Tehran as they sought a resolution to the war that began on February 28, when the US and Israel attacked Iran.

So, why is Trump threatening Oman now?

A potential Iran-Oman understanding covering the Strait of Hormuz could cut against one of Washington’s core demands: that Iran relinquish control of the strait as a condition of ending the war. Rather than curbing that control, such a deal would lend it greater legitimacy by formalising Iran’s position.

But experts say Trump is also likely angry that the US has seemingly been cut out of the deal relating to the strait.

“In part, a solution mediated without US intervention and which in fact allows Oman and Iran to manage passage through Hormuz, which lies entirely within the two countries’ territorial waters, would show how impotent the United States is and has been,” Laleh Khalili, a professor of Gulf studies at the University of Exeter, told Al Jazeera.

The US and Iran have also strongly disagreed about whether Iran should be allowed to charge fees to shipping companies using the strait. Under international law, tolls for passing through natural waterways such as Hormuz are forbidden, even when they are not technically in international waters. However, fees for services such as insurance, environmental protection and docking can be charged. It has yet to be seen whether this issue will be addressed in an Iran-Oman agreement.

In late July, US Secretary of State Marco Rubio warned that Iran should not be allowed to charge tolls on vessels traversing Hormuz. Days earlier, Trump himself pledged there would be no tolls for passage through the strait, unless they are collected by his own country.

On August 14, Trump went a step further, telling his supporters in New York that he had plans to declare the Strait of Hormuz a “territory” of the US. “After we finish defeating Iran, which is being very badly defeated, pretty soon I’ll be declaring the Hormuz Strait a territory of the United States,” Trump said.

Kazem Gharibabadi, Iran’s deputy foreign minister for legal and international affairs, responded to that threat on social media with defiance.

“Trump said that, after Iran’s defeat, he will soon declare the Strait of Hormuz as American territory,” Gharibabadi wrote.

“The Strait of Hormuz cannot be taken over by a tweet, nor by an aircraft carrier, nor by issuing a decree, nor by an election speech. Iran is neither afraid of threats nor intimidated by a show of force.”