President Trump has indicated that the nearly seven-month-long US campaign against Iran may be approaching its conclusion, while also suggesting that Tehran appears receptive to reaching an agreement. The conflict, which erupted on February 28, is now spreading into Yemen, where Iranian-backed Houthi rebels have escalated their attacks on Saudi Arabia and are seeking to gain control over the strategic Bab el-Mandeb strait, a vital maritime chokepoint connecting the Red Sea to the Gulf of Aden.
Gulf economies and global oil markets are feeling mounting pressure as a result of the ongoing hostilities. Saudi Arabia is rushing to repair a critical crude oil pipeline, with analysts warning that prolonged damage to this infrastructure could lead to a long-term disruption in petroleum supplies. On July 1, 2026, President Trump addressed reporters at Joint Base Andrews in Maryland before boarding Air Force One, the Boeing 747-8 aircraft gifted to the United States by Qatar for presidential travel.
Speaking to journalists in North Carolina on Wednesday evening, Trump stated, "Well, hopefully we're getting close to ending this war. The Iranians want to make a deal, so we'll see where it goes." The President also revealed that there have been "direct communications" with Tehran, though he declined to elaborate further on the nature of those discussions. The broader Middle East conflict is now rippling into Yemen, further unsettling oil markets as Houthi forces intensify their strikes on Saudi territory and attempt to seize control of the Bab el-Mandeb strait, a crucial artery for oil shipments heading to global destinations.
According to a Thursday report from news website Axios, Trump is planning to meet with Gulf state leaders on the sidelines of the UN General Assembly in New York next Tuesday to discuss next steps in the war effort. Axios also noted in a related video segment that Moody's Analytics economist Mark Zandi believes the Federal Reserve should pause further interest rate hikes. The report indicates that Washington's efforts to restart ceasefire negotiations appear to have stalled.
In recent days, Gulf nations have come under sustained attack from Iran and its Houthi allies. Trump is expected to convene with the leaders of the six Gulf Cooperation Council states—Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, and Oman—with the possibility of expanding the guest list to include other Arab and Muslim leaders. Axios, citing unnamed sources familiar with the matter, reported that the US State Department dispatched preliminary invitations on Wednesday, and that discussions will center on Washington's proposed post-war strategy framework.
Trump and his senior team are developing contingency plans for the post-conflict period, though finalization is not expected until after the November US midterm elections. The report also cited Israeli sources indicating that Prime Minister Benjamin Netanyahu hopes to meet with Trump in New York, although no formal meeting has been confirmed yet.
As diplomatic efforts advance, Gulf states are grappling with the escalating economic toll of the conflict. A strategically vital east-west oil pipeline in Saudi Arabia, which transports crude from the kingdom's eastern coast to the Red Sea port of Yanbu, has been damaged in a drone strike. In response, Saudi Arabia has arranged ship-to-ship transfers at Oman's Port of Sohar to boost oil shipments, which helped ease concerns about a prolonged supply gap and pushed oil prices lower on Thursday. The international benchmark Brent crude November contract fell 1.5% to $104.28 per barrel, while US West Texas Intermediate crude for October dropped 1.1% to $101.30 per barrel.
On September 11, 2026, a drone strike on a pumping station along the Saudi east-west pipeline sparked a fire, leaving buildings damaged and the ground scorched. In a statement released Wednesday, the Saudi Press Agency called for de-escalation in the region, advocated for diplomatic solutions, and urged the restoration of navigation freedom through the Strait of Hormuz. It remains unclear what conditions the US might present to Gulf states and Iran in the aftermath of the conflict.
Michael Feller, chief strategist at a geopolitical advisory firm, suggested that Iran may be willing to open negotiations after the midterm elections, but warned that continued refusal to engage diplomatically could prolong the conflict. "Iran might be ready to strike a deal after the midterms. If not, the war could drag on until late 2028 or even longer," Feller said. He added that completing repairs on the east-west pipeline would serve as a significant relief factor, but cautioned that if the pipeline is not restored within days, crude inventories at export terminals could run dry.
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