Gulf states weigh sanctions against Iran escalation risk

The United States announced "Operation Economic Outcast" on Monday, a new sanctions campaign against Iran, shifting strategy from military strikes to economic pressure. The move comes nearly six months into the US-Israel war with Iran, aiming to force Tehran into a peace deal. Treasury Secretary Scott Bessent called it "the single greatest financial offensive ever" against Iran, targeting digital assets, technology, gold, aviation, and shipping. He warned banks and businesses face secondary sanctions for facilitating Iranian trade, with 60 entities across the UAE, Hong Kong, China, Singapore, and Switzerland penalized. Gulf states face a dilemma: joining Washington risks Iranian retaliation, while staying neutral may prolong the conflict. Iran warned it could block oil shipments through the Strait of Hormuz, which carries one-fifth of global oil and gas. The UAE has cut ties with Iran, but Saudi Arabia, Qatar, and Oman resist full alignment.