The three-year arc since October 7 has produced a paradox: the side that won every military engagement is losing the strategic game. Israel killed Hamas and Hezbollah leaders, assassinated Iran's Supreme Leader Ayatollah Khamenei in February, occupied most of Gaza after killing more than 74,000 Palestinians, and invaded Lebanon twice. By every kinetic metric, Israel is the preponderant military power in the Middle East. But as Chatham House's Sanam Vakil notes, real power means projecting stability, and Israel has shown no ability or willingness to do that. The Abraham Accords framework — the US policy bet that normalisation deals would embed Israel as a regional anchor — is dead. Israel's 2025 attack on Doha, Qatar crossed a red line that made further Arab normalisation politically impossible. Governments worldwide now view Israel as the primary source of regional unrest, not the stabilising force Washington imagined. The diplomatic isolation extends to the United States itself, where Israel's global unpopularity has become a domestic political problem. Iran's position is equally paradoxical. Its proxy network — the core of its regional power for decades — has been severely degraded. Hezbollah's deterrent reputation buckled under Israeli pressure, and Assad's ouster created a vacuum Israel and Turkey moved to fill. Yet Iran has found new leverage through geography. The Strait of Hormuz, which carries roughly a fifth of global oil and gas, and the Bab al-Mandeb strait, now effectively under Houthi control after their September seizure of Mocha and nearby islands, give Tehran and its remaining ally economic chokehold capacity that military losses cannot offset. The economic damage has been brutally asymmetric, but not in the direction Washington expected. Western economies, cushioned by emergency reserves and record US oil production, absorbed the shock relatively well — the IMF trimmed its 2026 global growth forecast only modestly, from 3.3 to 3.1 percent. Gulf exporters took the real hit: Saudi Arabia's forecast dropped from 4.5 to 3.1 percent, while Qatar swung from 6.1 percent growth to an 8.6 percent contraction. The Houthi drone and missile strikes on Ras Laffan, Dubai airport, and Fujairah's oil zone made the vulnerability concrete. The most consequential shift may be the collapse of faith in the US security umbrella. The Mecca security pact — signed in August between Saudi Arabia, Turkey, and Pakistan, with its mutual-defence clause — is a direct institutional response to American unreliability. States across the region are hedging by engaging China, Turkey, and each other. As HA Hellyer of RUSI puts it, the US is no longer viewed as a singularly sufficient security guarantor. That is not a temporary posture; it is a structural realignment. Israeli political economist Shir Hever identifies the deep irony: the West's reduced dependence on Gulf oil has made Israel more of a liability for the US, not less. The strategic rationale for the alliance — Israel as American anchor in an oil-critical region — has weakened precisely as Israel's behaviour has made the region more dangerous. A school of thought in Israel holds that the current Gulf crises might push Arab states into alliance with it, but this requires ignoring that Israel was the primary aggressor in every conflict since October 7. The emerging order is not multipolar in the clean academic sense. It is multi-aligned, with every state hedging across multiple patrons. Vakil's observation that Iran has become the status quo power while Israel has become the revisionist one captures the inversion. Three years of maximum military force produced tactical victories and strategic regression — the Middle East is less stable, the US position weaker, and the actors most damaged by the violence are not the ones Washington intended to punish.
