THE so-called “miracle” of the Middle East was, in many ways, an illusion, an economic oasis forged under the military steel of the West and the leadership of the US defense security architecture.

It aimed to prolong the US unipolar moment through monopolistic control of the sea lines of communication, particularly in the Strait of Hormuz and to anchor global oil trade in the US dollar. Today, however, it stands at one of the worst moments in its military and economic history.

This is the case for each Gulf member state, which must attempt to preserve peace amid war, a task unparalleled when the war cycle is both initiated and potentially concluded within their territorial space, leaving defense as the only viable option. One of the most difficult tasks entrusted to any military command during war is maintaining a balance between offense and defense in a way that favours peace rather than escalation. The irony, however, is that the decisive “battle cards” lie elsewhere, in the war plans of Iran, the United States and Israel, not within the Gulf states themselves.

On one hand, the Gulf, host to key US military bases, finds itself at war with its own future. On the other, the military doctrines emerging from Tehran and Washington operate under fundamentally different logics. For Iran, the objective is not necessarily to win the war in conventional terms, but to make the cost of victory for the United States and its allies prohibitively high. This strategy rests on several pillars, asymmetric warfare through sub conventional militia forces, special operations and drone warfare, sustained missile attacks designed to degrade defense structures both economically and operationally, where even successful interception constitutes an economic loss for the defender, ranging from $20,000 to $4 million per intercept and the potential blockade of the Strait of Hormuz while selectively managing trade under Iranian control.

Even if conventional deterrence collapses, the war can continue through cost imposition. The outcome of such a conflict can no longer be defined in terms of time-frames or target engagement alone. While the United States may successfully engage thousands of military targets, it cannot sustain limitless defense nor maintain an endless offensive posture. At the core of this dilemma lies the growing concern that America’s critical strategic munitions, long range missiles, interceptors, anti-ship systems and anti-drone capabilities, are being depleted. More critically, safeguarding high value assets such as aircraft carriers and ground troop deployments becomes increasingly difficult. The broader impact extends to the United States’ global military posture, particularly its ability to counter strategic competitors like Russia and China in other theaters.

With no decisive military success in sight that could shift the balance of the war in favour of the United States, without risking escalation in sensitive domains such as Iranian nuclear infrastructure or maritime chokepoints, the conflict risks becoming protracted until a negotiated settlement is reached. Iran’s war cycle, although challenged by sustained US aerial and missile strikes, may evolve further. A shift toward expanded ground engagements could increase the vulnerability of US military structures to Iranian counter-offensives, potentially transforming the conflict into a prolonged ground war, reminiscent of Vietnam, where territorial gains or destruction of launch capabilities fail to produce decisive outcomes.

While current US strategy aims to strike deep into Iran’s war making capacity, the region risks descending into a wider war zone with no clear end. The degradation of Iran’s centralized military command could instead decentralize conflict, leading to prolonged militia warfare. This would place immense pressure on global energy markets and Middle Eastern security architecture, particularly around strategic chokepoints such as the Bab el Mandeb and the Strait of Hormuz. Such an outcome would also mean that Israel could become entangled in an enduring militia based conflict, increasingly shaped by drone warfare. Meanwhile, the Gulf States, alongside the United States, would face the dual burden of securing global maritime routes and maintaining stability in global energy markets, at a time when the dominance of the US dollar itself may be weakening.

Maintaining offensive momentum in a traditional battle-space is inherently difficult. When linked to initiative dominance across all phases of war, it reflects exceptional military foresight. However, this dynamic reverses when continuous target destruction merely escalates the conflict without delivering a decisive outcome, resulting in a war without a clear military victory. For US military planners, the Iran conflict is increasingly becoming such a scenario. Although Iran’s conventional forces are outmatched by superior US firepower, its strategic approach, centered on drone and missile strikes, maritime disruption, cyber operations and asymmetric forces, including groups such as Hezbollah, the Houthis and Iraqi militias, continues to impose significant costs.

A major challenge for the United States is that its initial war objectives, regime change, destruction of Iran’s ballistic missile capability, dismantling of its nuclear infrastructure and control of the Strait of Hormuz, have been obscured by the fog of war. In reality, two fundamentally different military strategies are at play. Iran’s strategy integrates operations across land, air, sea, space and cyber domains, not to achieve shock and awe, but to exhaust the adversary through attrition, driven by drone warfare, cyber operations, psychological pressure and maritime disruption. Each successful intercept depletes scarce and expensive defensive resources, while Iran replenishes its capabilities through relatively low cost systems, creating a structural cost asymmetry that favours the attacker over time. Estimates suggest a cost ratio approaching 60:1, where mass produced systems such as the Shahed 136 drone can be deployed at a fraction of the cost of interceptors like the SM 6 or Patriot systems.

Although operations have spanned multiple domains, early assessments indicated that the war would unfold in a highly transparent battle-space. Factors such as terrain, technological capabilities and international scrutiny required an approach emphasizing precision, minimal collateral damage and reduced operational exposure, while simultaneously seeking dominance across air, cyber and space domains. Despite maintaining relative air superiority and successfully targeting elements of Iran’s leadership and naval assets, the United States has struggled to significantly degrade Iran’s core military strategy. This strategy is built upon asymmetric dominance, including underground missile infrastructure and resilient drone production networks. As the conflict expands toward nonmilitary targets, Iran’s countermeasures continue to challenge US decision making, potentially forcing a shift toward prolonged ground operations, an approach that carries significant risks and uncertain outcomes.

This raises a critical question, has the US military strategy, whether aimed at political transformation, degradation or coercive compliance, achieved its intended objectives or has it instead triggered a chain of events that may accelerate the end of the US unipolar moment, transforming the Middle East from a US-dominated region into a multipolar arena shared with Russia and China? As the war continues, the global economic system may face a profound structural shift, potentially leading to economic depression or a fundamental rewriting of the international order. One conclusion, however, appears increasingly certain, the Gulf’s economic illusion has collapsed, much like a desert mirage, replaced now by the harsh realities of war.

—The author is President/Chairperson of the South Asian Strategic Stability Institute (SASSI) University and serves as an Advisor to the Ministry of Defence, Govt of Pakistan.

© Pakistan Observer