Saudi Arabia urges US to scale back Iran war amid fears of economic fallout
Saudi Arabia is pressing the United States to scale back its military actions against Iran, amid growing fears that further escalation could trigger severe economic consequences across the region.
Diplomatic sources say Crown Prince Mohammed bin Salman has urged US President Donald Trump to lift the naval blockade imposed on Iranian ports and return to negotiations. The move reflects rising concern in Riyadh that Iran could retaliate in ways that would disrupt vital global shipping routes.
At the centre of these concerns is the potential for Iran to activate its allies in Yemen, particularly the Houthi movement, to target shipping in the Red Sea. Such action could threaten the Bab al-Mandeb Strait, a critical maritime chokepoint through which a large share of Saudi oil exports passes.
The risk of disruption to this route has heightened anxiety within the kingdom, despite its previous confidence in weathering regional instability. Saudi Arabia had initially taken a more assertive stance on Iran, reportedly viewing military pressure as an opportunity to weaken Tehran’s influence in the Middle East.
However, the current situation appears to have shifted that outlook. Officials now fear that continued confrontation could backfire, particularly if key trade routes are compromised. Even a limited attack on shipping could deter vessels from using the Red Sea corridor, with potentially far-reaching consequences for global energy markets.
Saudi Arabia has so far managed to mitigate some of the impact of the conflict by rerouting oil exports. After Iran closed the Strait of Hormuz, the kingdom redirected much of its crude shipments from the Persian Gulf to the Red Sea via its east-west pipeline. This adjustment has helped maintain export levels close to pre-war figures.
Despite this resilience, the strategy carries significant risks. The alternative routes available are limited, and further disruption could force longer and more complex shipping journeys. In some cases, rerouting oil shipments could add weeks to delivery times, increasing costs and placing additional strain on supply chains.
The broader economic implications are already being felt across the region. While Saudi Arabia faces a projected contraction, it is less severe than in neighbouring states such as Qatar and Kuwait, which are expected to experience sharper declines. Nevertheless, the kingdom remains vulnerable to further shocks.
Concerns have also been raised about the capacity of Houthi forces to resume attacks on commercial vessels. Although previous military operations have weakened their capabilities, analysts believe the group still retains the ability to carry out disruptive actions at sea.
Past incidents highlight the potential scale of the threat. In recent years, attacks on shipping in the Red Sea led to a significant drop in maritime traffic, underscoring how quickly instability can affect global trade.
The evolving situation has also prompted questions about the broader regional strategy. Saudi Arabia had previously aligned itself with a more confrontational approach towards Iran, but the current risks appear to be driving a more cautious stance.
Diplomatic efforts are now focused on preventing further escalation, with an emphasis on returning to negotiations. The kingdom’s leadership is understood to be weighing the long-term economic costs of continued conflict against the potential benefits of a more stable regional environment.
While there is no indication of a public break in relations between Saudi Arabia and the United States, the shift in tone suggests a reassessment of priorities. Stability, rather than confrontation, is increasingly seen as essential to protecting the kingdom’s economic interests.
As tensions continue to rise, the situation remains uncertain. The balance between military pressure and diplomatic engagement will likely determine the next phase of the conflict, with significant implications for both regional security and the global economy.