Iranian attacks on Gulf vessels trying to transit via Omani sovereign waters have once again pulled the region into a tit-for-tat spiral of escalation.The US responded by cancelling the waiver permitting Iranian oil exports. Two nights of punitive airstrikes by the US air force against targets across southern Iran followed. Iran answered with ballistic missile and drone attacks on US installations in Bahrain and Kuwait.The reluctance of both Iran and the Trump administration to return to full-scale war has not changed. But the boundaries of acceptable violence under this ceasefire are unacceptable for the Gulf states, who want to return to business as usual. Washington is not helpful in this standoff, as its desperate attempts to force the Islamic Revolutionary Guard Corps (IRGC) off the Strait of Hormuz by coercion alone will not work. Punitive airpower will not make the IRGC surrender a prize it treats as a strategic spoil of war.Under the memorandum of understanding now framing the crisis, Iran has 60 days to guarantee freedom of navigation. But it will only do so on its own terms. This risks creating a situation that gives it undue influence over the way Gulf states are able to do business with the world. The way out is not more firepower, from either side. But this is a bargain the Gulf states themselves must broker, to convince Iran that restraint pays in the form of sanctions relief, unfrozen assets and a return to global markets. The Gulf’s task is to make the IRGC’s own interest point towards open passage.For Iran, war over Hormuz is now not just about money but authority and prestige. It wants recognition as the legitimate master of the strait – a status neither Washington nor the Gulf can afford to grant.So, the Gulf must invest in its own diplomatic and coordinating capacity, led by Qatar and Oman, to retain strategic autonomy and sovereignty – as neither Europe nor America will come to its aid.The Iranian attacks are not random pressure. Oman has tried to open a southern corridor in its sovereign waters close to its coastline, to provide an alternative passage that would loosen Iran’s grip on the strait. The IRGC answered by attacking vessels transiting that corridor, to mark a clear red line.An alternative route that works, even once, establishes that the Gulf can route around Iran, diluting the authority the IRGC is trying to claim. Competing routes for vessels transiting the Strait of Hormuz, July 2026. Institute for the Study of War For the IRGC, the Strait of Hormuz has become a token of victory – meaning money alone is not an answer. The temptation is to solve this with a toll. But any profits would be relatively small, as they have to be proportionate to the services actually rendered. This might be hundreds of millions of dollars a year, not billions. Compensation on the scale of billions could only come from what a wider settlement can deliver: sanctions relief, unfrozen assets, and economic investment that Iran’s markets can actually absorb.Rift in Islamic RepublicThis exposes a rift in the Iranian regime. Its pragmatists understand the real prize is a return to global markets, which endless confrontation will prevent. But the IRGC – actively involved in maritime aggression in the strait – sees the fee scheme as revenue it could bank for its own budget, quickly, while talks resulting in sanctions relief could drag on for years.This is why the Gulf must offer a credible pathway in which restraint today leads to relief tomorrow, so Tehran’s leadership can tell its hardliners that patience will pay more than pressure.Some may object that Iran will simply take the relief while continuing to disrupt the strait. The credulous reading – that money buys compliance – misreads a regime for which prestige outranks revenue. The cynical reading – that Iran will never commit to a deal – misreads the pragmatists who know that continued sanctions are a dead end for Iran. The truth sits between: Iran will negotiate indefinitely and commit to nothing, because ambiguity is cheap. So the task is to make ambiguity expensive.The right question, then, is whether the Gulf can arrange the incentives so that keeping the strait open becomes Tehran’s own path of least resistance.The Gulf states cannot tolerate, under any circumstances, a permanent change in the status of the strait. Limbo is as unaffordable as war. For Washington, resolving this issue would offer an exit from a bombing campaign that will never deliver its desired result.Gulf states must take the leadThis is why the Gulf must build its own capacity now: a durable coalition of the willing, anchored by Qatar’s diplomacy and Oman’s role as a guardian of the strait. This should be multiplied by shared Gulf maritime capabilities to escort vessels and keep the waters drone- and mine-free.On the strategic level, it requires a Saudi-led joint security framework between the Gulf and Iran, built around a non-aggression pact and deconfliction channels.For too long, the Gulf has delegated security to Washington, which has become an unreliable and often toothless tiger in the face of Iranian resistance. Donald Trump’s impulsive and improvised statecraft has become a liability. It has dragged the Gulf into spirals of escalation in which Kuwait and Bahrain in particular have become collateral damage. The greatest incentive the Gulf states can provide to dissuade Iran from its self-destructive trajectory of protracted resistance is a credible route to some form of financial compensation, at the end of a diplomatic process.A Gulf acknowledgement of Iran’s status in an equitable security framework, combined with the prospect a windfall down the line, will do more than protracted remote warfare from the air against an enemy with a high threshold of pain.Andreas Krieg does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.