As the world scrambles to reopen Hormuz, a glaring contradiction goes unaddressed
The Gulf Arab states have been among the loudest voices demanding that Iran reopen the Strait of Hormuz. The UAE and Bahrain signed onto a 22-nation joint statement condemning Iran’s blockade. Saudi Arabia pre-loaded tankers before the crisis hit. Their diplomats have appeared at every summit, every press conference, every coalition meeting.
What none of them have done is pledge to keep their oil prices where they were before the war.
Brent crude surpassed $100 per barrel on March 8 for the first time in four years, eventually surging to $126 per barrel at its peak — a windfall that flows directly to the very Gulf nations rallying the world to reopen the waterway in their own backyard. US government officials and Wall Street analysts are now seriously considering the prospect that prices could surge to an unprecedented $200 a barrel if the crisis continues.
The contradiction is stark, and surprisingly little-discussed: Gulf states are asking the international community — including NATO navies, US warships, and a 40-country coalition assembled by the UK — to spend blood and treasure reopening a strait that, the longer it stays closed, the richer it makes them.
“They are calling Iran reckless. Fine. But are they capping what they charge for the oil they can export through alternative routes?” asked one European energy official, speaking anonymously. “Because if not, they are protesting the fire while selling the firewood.”
Once local storage fills up, Gulf producers have no choice but to shut in their wells — which is why Iraq and Kuwait began curtailing production in early March. That supply squeeze, combined with Hormuz’s closure, is exactly what is driving prices skyward. Gulf states with overland pipelines or Red Sea access are now sitting on some of the most valuable crude in history.
The finance ministers of Spain, Germany, Italy, Portugal and Austria have already written to the European Commission citing “market distortions” caused by the price spike, urging a windfall tax on energy companies. Yet no equivalent pressure has been applied to Gulf sovereign producers, who are state entities, not private companies, and who could theoretically announce price commitments to the global market tomorrow.
None have done so.
The argument for a price pledge is straightforward: if Saudi Arabia, the UAE, or Kuwait were to announce that oil sold from their reserves would not exceed pre-war levels for the duration of the crisis, the psychological shock to global markets could be immediate and significant. It would not reopen the strait. But it would blunt the crisis’s worst economic damage — the very damage these governments are publicly lamenting.
Instead, the Gulf states’ posture is to demand that others solve the security problem while they benefit from the economic one.
Regional analysts note that each Gulf state has an incentive to free-ride on the military contributions of other members. That logic applies equally to the economic dimension: let others absorb the military risk, while quietly absorbing the price premium.
The closure has been described as the largest disruption to the energy supply since the 1970s energy crisis. During that crisis, Arab oil producers used prices as a weapon. Today, Gulf states are asking the world to treat the Hormuz closure as a shared emergency — while leaving the question of who profits from that emergency entirely unasked.
That question deserves an answer.
