The fragile cease-fire between the United States and Iran marks the beginning of the end of this conflict—and it leaves behind three key changes to the Middle East.First, the regional and global economic effects of this war will be profound, lasting, and largely negative. Although the United States, blessed with natural resources, is better positioned to weather the effects of this war than most countries in Europe or Asia, everyone will feel the pain for years to come.Second, the political and security situation of the Persian Gulf is much worse than it was six weeks ago—and that is true, incredibly, of all parties involved in the conflict. Iran might be the closest thing to a winner in this war, but it will not feel that way to most Iranians, who have taken an almighty beating.Third, this marks the end of a remarkable era of Israeli military adventurism that began in response to the traumatic Hamas attacks and massacres of October 7, 2023. The U.S.-Israeli defense relationship, as well, is likely headed for a dramatic rethink by Democrats and Republicans alike.[Read: Iran out-trolled the troller in chief]The war will affect the American and global economies in ways that most Americans still do not yet understand. Even if the shooting stops today, the Arab Gulf States will need to spend the next several years rebuilding infrastructure, while also rearming. The ripple effects of those rebuilding and rearmament efforts will be felt throughout the American economy. Money from the Gulf has fueled many of the investments in artificial intelligence over the past few years, both through direct investments in start-ups and through indirect placements in U.S.-based venture-capital funds. Now the sovereign-wealth vehicles of the Gulf will likely need to deploy more capital at home, curtailing investments abroad.We’re only just starting to feel the inflationary effects of this war. Even if the Strait of Hormuz were to open up tomorrow—and President Trump is now vowing to impose his own blockade—the price of jet fuel, diesel fuel, and countless petroleum by-products and petrochemical feedstocks will remain elevated for the better part of the next year. Countries will also be refilling their strategic reserves, further reducing the supply available to consumers. Companies across the world are panicking about potential shortages of everything from helium to fertilizer.Some of the oil-and-gas infrastructure that has been destroyed in this conflict will take years, not months, to rebuild. Unlike pipelines, which are relatively easy to fix, the downstream gathering, liquefaction, and processing infrastructure that Iran has targeted features purpose-built components using exotic metallurgy for which there are no off-the-shelf replacements. The Iranian strikes on the Qatari liquefied-natural-gas facilities at Ras Laffan, for example, will likely take approximately 4 percent of the world’s LNG offline for at least the next three years.Integrated air and missile defenses have also been depleted. I have criticized the way in which the Arab Gulf States have built—or, more often than not, failed to build—independent military capabilities. Indeed, you would think, given how dependent the Gulf economies are on moving oil and gas through the Strait of Hormuz, that they would have acquired some moderately capable naval forces of their own by now. Alas, they have not.But their investment in integrated air and missile defense systems since the conclusion of the Gulf War in 1991 has certainly paid off. Those systems have performed well, but they are expensive—orders of magnitude more expensive than the Iranian rockets and missiles they are designed to counter—and will need to be replenished. The Arab Gulf States will also need to invest in new ways to counter Iranian drones, against which the U.S. military has also struggled. In many ways, the past few weeks have represented the last easy drone war. The next war will almost certainly feature swarms of semi-autonomous drones that could rapidly overwhelm current defenses.The political and security situation in the Gulf following this war is somehow worse for each party in the conflict. Iran has been horribly bloodied. We cannot know what kinds of pressures the Iranian leadership will be under in the months ahead as it seeks to rebuild its shattered economy. For now, though, the Iranian regime is intact and emboldened, and it will be determined both to replenish its conventional armaments and to accelerate its nuclear-weapons program—a nightmare for the world.If Iran is now able to determine what flows through the Strait of Hormuz, the war will have been a total strategic disaster for the United States and its regional partners. Remember, the strait was open prior to the conflict. The war itself—instigated by the United States and Israel—was what led Iran to hold shipping through the strait hostage. Iran might even have doubted its ability to do so prior to this conflict. But as it turns out, Iran didn’t need to physically block the strait; it could effectively halt maritime traffic by making any ships passing through uninsurable. Other countries will now need to reckon with Iran’s ability to shut down the strait at will.Saudi Arabia and the United Arab Emirates will figure out a way to work around the new choke point. Indeed, the national oil companies in both countries—Aramco and ADNOC, respectively—deserve a lot of credit for the midstream infrastructure investments they each made prior to the conflict that have allowed them to weather the fighting. But for Iraq, Kuwait, and Qatar, which are all in tougher geographic positions, the functional closure of the strait is catastrophic.Yet, incredibly, despite the U.S. failures in this campaign, it’s hard not to imagine that the Gulf will be more dependent on the United States going forward. It has no good alternatives. Russia has had no meaningful ability to project power beyond its borders since 2022, and China has shown no interest in taking on the security burdens that the United States has shouldered in the region. Security cooperation between the United States and the Gulf States will, against all odds, deepen in the decade to come.The same cannot be said for the security relationship between the United States and Israel. The past six weeks will likely prove to be the high-water mark in the relationship between the two countries. And the era of Israeli military adventurism, which has weakened all of Israel’s immediate adversaries yet left Israel feeling more anxious than ever, is surely at an end.Iran—Israel’s truly mortal enemy—has always threatened Israeli and U.S. interests in three different ways: through its nuclear program, conventional rocket and missile arsenal, and support for proxy forces and regimes.Working alongside the United States, Israel has managed to severely degrade each of these three threats. Hamas and Hezbollah are shadows of their former selves. The Assad regime, in Syria, is no more. The Houthis and Iraq’s Shiite militias have been cowed into something approaching quiescence. The nuclear program—although far from “obliterated,” as Trump likes to say—has nonetheless been knocked back at least a year. And Iran’s air and missile defenses have been hit hard, while its arsenal of missiles and rockets has been reduced.Yet despite these battlefield successes, even the most hawkish Israelis will understand that the very real and rising tide of anti-Semitism across the globe does not fully explain why Israel finds itself so alone. They will understand, even if grudgingly, the world’s horror at the tens of thousands of Palestinian, Lebanese, and Iranian civilian casualties in the wars they have waged over the past three years.And they will grasp, as well, the role that Israeli Prime Minister Benjamin Netanyahu has played in his nation’s isolation. He is, for younger Americans, synonymous with the Israeli state. And his behavior over the years toward both Republican and Democratic leaders—which now includes encouraging a president to pursue a wildly unpopular war—is a big reason a majority of Americans under the age of 50, from both parties, now dislike Israel. Many Israelis and supporters of Israel in the United States hope that the elections in October will finally sweep him from power.[Read: The forgotten war that Iran already won]But Netanyahu’s removal alone will not repair relations between the United States and Israel. Last week, Representative Alexandria Ocasio-Cortez called for an end to U.S. military support for Israel. Within the decade, that will likely be the Democratic Party’s official position.In 2016, when I was a deputy assistant secretary of defense in the Obama administration, I helped negotiate the last 10-year memorandum of understanding between the United States and Israel, granting $3.8 billion annually in U.S. tax dollars. Even then, I heard complaints and questions from peers in the administration who wondered why we were providing so much assistance to such a wealthy country—and one whose leader had spent the previous eight years condescending to and undermining our president.Despite the wars since 2023, Israel’s economy has grown only more vibrant over the past decade. One of the biggest drivers behind the Abraham Accords—a genuine diplomatic achievement by the first Trump administration—was the promise to unlock Gulf investment in Israel’s dynamic technology sector. So why, Americans will ask, are we subsidizing the Israeli economy? In addition, the sales of U.S. arms to Israel were meant to guarantee, as Israel and its defenders always assured us, that Israel would never ask America to fight its wars. Yet many Americans believe that is precisely what has happened over the past two and half years.Netanyahu himself has said that Israel should end its dependence on U.S. military support—which, as he correctly foresees, is likely to be turned into a source of leverage by future administrations. The United States and Israel will continue to work together on the development and production of advanced weapons, such as integrated air and missile defenses. But this war marks the end of the Israeli-U.S. defense relationship as it has existed in recent decades.