Most Gulf markets advanced on May 25, 2026, buoyed by hopes of a US-Iran peace deal, even as regional powers reportedly prepare to offer Iran economic support in an effort to steer unpredictable nuclear negotiations away from renewed conflict that could devastate the region.
According to a Haaretz analysis published the same day, Gulf states are prepared to provide Iran with a financial safety net that could influence President Donald Trump's approach to negotiations. The analysis, written by Zvi Bar'el and published at 11:32 AM IDT, suggests that Tehran believes the U.S. president is willing to pay a high price for the appearance of victory, but that Trump may enter the next phase of nuclear negotiations without guarantees, leverage or credible deterrence.
Market Response to Diplomatic Hopes
The Reuters coverage noted market reactions within the Gulf in the context of Middle East diplomacy and energy headlines, with investors responding positively to signs that the path to renewed warfare may be narrowing. No one appears to be placing bets anymore on the scenario that, until just a few days ago, looked highly likely: a return to war between the United States and Iran.
Religious Pilgrimage Shapes Diplomatic Timeline
A glance at the calendar suggested that President Donald Trump had little interest in launching a new offensive before the end of the Hajj pilgrimage and Eid al-Adha, which begins Wednesday and is expected to draw more than 1.5 million pilgrims to Saudi Arabia. Riyadh had already pressed Washington not to resume fighting while pilgrims remained inside the kingdom, fearing that a regional war could leave many stranded.
The timing underscores how regional powers are leveraging both economic and religious considerations to prevent a conflict that would threaten millions of civilians and disrupt global energy markets. The Strait of Hormuz, through which a significant portion of the world's oil passes, remains a flashpoint in any potential US-Iran confrontation.
Gulf States' Strategic Calculus
The Haaretz analysis, tagged with Saudi Arabia, Iran - U.S., Iran nuclear, United Arab Emirates, Donald Trump and Strait of Hormuz, suggests that Gulf states are taking an active role in shaping the diplomatic landscape. By offering Iran economic support, these nations appear to be working to create conditions that make diplomacy more attractive than military escalation—a strategy that could protect their own populations and economic interests while potentially constraining more impulsive decision-making in Washington.
The prevailing view in Tehran, according to the analysis, is that the U.S. president is willing to pay a high price for the appearance of victory, suggesting that Gulf states may be positioning themselves to facilitate a face-saving agreement that prevents renewed hostilities.
Why This Matters:
The Gulf states' reported willingness to provide Iran with economic support represents a significant shift in regional diplomacy, with profound implications for millions of people across the Middle East. A return to war between the United States and Iran would threaten not only the 1.5 million pilgrims expected in Saudi Arabia for Eid al-Adha, but also countless civilians throughout the region who would bear the costs of military conflict. The potential for disruption to global energy supplies through the Strait of Hormuz would ripple through working families worldwide through higher fuel and food prices. By leveraging both economic incentives and the protection of religious pilgrims, regional powers are demonstrating that multilateral diplomacy and collective security arrangements offer a path forward that protects human welfare better than unilateral military action. The question of whether credible deterrence and guarantees can be established through negotiation, rather than force, will shape the safety and economic security of millions.