Six months on, Iran war reshapes Middle East, but not as planners hoped

KUALA LUMPUR, 29 AUGUST 2026 —

Six months after the United States and Israel launched coordinated strikes on Iran, the Middle East has been reshaped in ways neither Washington nor Tel Aviv anticipated.

The original plan was simple: topple Iran’s leadership and install a pro-Western government. Instead, Iran’s currency recovered during the conflict. Anti-government protests in January were crushed with heavy casualties, and calls for regime change from Washington and Jerusalem went unheeded. Within weeks, Iran’s leadership was reconstituted, and public defiance never materialized.

Iran responded swiftly. It closed the Strait of Hormuz, halting one-fifth of global seaborne oil shipments. It also launched missile and drone attacks on Gulf Arab states hosting U.S. military bases, rattling energy markets and exposing weaknesses in the decades-old U.S.-led security architecture that had long guaranteed Gulf stability.

A temporary ceasefire was agreed in April, followed by a June deal between U.S. President Donald Trump and Iran. That agreement collapsed within weeks. Iran now seeks permanent control over the strait, using it to deter future attacks and extract concessions while refusing to compromise on its disputed nuclear program.

“The fact that the war began without a clear political objective and against the advice of key regional partners, and that there has not been clear evidence of a Plan B once the initial attacks failed to dislodge the Iranian regime, is likely to undermine confidence in the U.S. across the region,” said Kristian Coates Ulrichsen, a Gulf expert at Rice University’s Baker Institute for Public Policy.

That loss of confidence is already visible. Last month, Saudi Arabia entered into a new defense pact with Pakistan and Turkey, an early sign that traditional U.S. allies may seek alternative security arrangements. Yet Ulrichsen cautioned that the dilemma remains acute.

“There is no viable alternative to the full range of defense and security networks with the U.S.,” he said.

On Israel’s northern border, the war has deepened another crisis. Lebanon’s Iran-backed Hezbollah launched missiles into Israel days after the February strikes, prompting heavy retaliation and a ground invasion that reoccupied southern Lebanon. The fighting has added to Israel’s wider territorial seizures since October 2023, but at a steep cost in international isolation.

Israel faces growing accusations of genocide in Gaza and an International Criminal Court indictment against Prime Minister Benjamin Netanyahu for crimes against humanity — charges Israel denies. Domestic U.S. support has also eroded. Progressive critics accuse Israel of dragging America into another Middle East war, a narrative sometimes echoed within the Trump administration. As political pressure mounted, more than half of House Democrats voted to cut military aid to Israel in a June resolution.

The erosion is not confined to the left. Even conservative voices in Washington have begun to question Israel’s strategic judgment. Meanwhile, normalization with Saudi Arabia — long a U.S. and Israeli objective — has stalled amid the regional instability.

For Malaysian businesses with exposure to Middle East energy markets, shipping lanes, or defense supply chains, the reshaping of regional security carries direct implications. Disruptions to Hormuz-bound oil flows and rising insurance costs for Gulf transits could affect regional trade patterns, while shifts in U.S. defense commitments may alter procurement and partnership strategies across Southeast Asia.