Trump Halts Iran Strikes as Gulf Allies Warn of Global Economic Fallout

U.S. President Donald Trump abruptly canceled a planned military strike on Iran following urgent warnings from Gulf allies regarding potential catastrophic impacts on the global economy and energy supplies, choosing instead to give diplomacy another chance.

Gulf Energy Titans Sway Military Decisions

A pivotal phone call with Saudi Crown Prince Mohammed bin Salman proved decisive in scrapping what was described as the "biggest attack since World War II." Gulf leaders emphasized that an escalation could sever energy supply chains and destabilize the region.

■Leaders from Saudi Arabia, the UAE, and Qatar argued strongly for a diplomatic resolution, warning that they did not know where an attack might lead.

■The Crown Prince conveyed that a deal was imminent and an attack could have disastrous consequences for the region's vulnerability.

■Trump cited the "candid and constructive" nature of the call as a primary factor in his decision to stand down.

The Fate of the Strait of Hormuz

Market attention is fixed on the Strait of Hormuz, the critical waterway facilitating a fifth of the world's energy consumption which has been effectively shut down since the war began. The emerging proposal aims to reopen the strait in exchange for easing economic sanctions.

■The U.S. proposal includes lifting the naval blockade on Iran, allowing Tehran to resume oil exports.

■Iranian officials remain cautious, with spokesperson Esmail Baghaei stating the strait will not return to its pre-war status before February 28.

■Discussions regarding shipping protocols are ongoing with Oman, though Iran insists there is no current talk of a full reopening.

Market Reaction and Ceasefire Terms

With the immediate threat of a massive bombardment lifted, negotiations are set to resume Monday afternoon, offering a reprieve to global financial markets anxious about oil price shocks.

■The tentative deal includes a halt to attacks by Iranian-backed militias across the region, including in Iraq, Gulf countries, and Jordan.

■Israel has reportedly committed to the ceasefire framework established in June, according to Trump's announcement.

■While no final agreement is signed, mediation efforts are actively underway to de-escalate the five-month conflict, though Iran's defense ministry remains on high alert.

Bora Yalın Analysis: The direct intervention of Gulf energy titans to halt U.S. military action underscores the immense leverage oil supply security holds over geopolitical strategy. While we see a short-term shift towards risk-on assets, Iran's reluctance to fully restore the Strait of Hormuz to its previous status suggests that volatility in energy futures will persist. Capital flows are likely to stabilize temporarily, but the structural risks to global liquidity remain tethered to the fragile outcome of these negotiations.