They need the dollars because they're an import-oriented economy, almost all of which are conducted in dollars (nobody wants their dirhams because oil is priced in dollars anyways). Dollars are also useful for their sovereign funds to invest into the US, either in the stock market, or in private equity.

What happened this week - they announced they might start selling in yuan, they left the OPEC, and they started a new wealth fund to invest exclusively in China. That gives them an alternative for the dollar-peg since China is their biggest import partner anyways, while also giving their surplus yuan an alternative channel of investment into China.

Still they need the dollar-swap for the essentials - food from India and Pakistan, neither of which will accept their dirhams unless they get exclusive deals (which are not allowed in OPEC). It helps for them that India and Pakistan need lots of oil, and that a dollar peg benefits the UAE more than it does either nation. If the EU plays a greater role in trade, particularly in defence and maritime manufacturing, they will stockpile euros too, to the detriment of the dollar.

Still, they also bought some prime DC acreage to expand their US diplomatic corps, and will likely keep the Washington connection, so long as AI is perceived as useful. Right now, that's the only major export benefit the US provides the Gulf countries. This is them just hedging their bets.

> It is an admission that US protection was always a paper tiger. Perhaps in the 1960s it meant something, but Iran has shattered the illusion that Washington has any credible defense of the country.

sigh No, it's not. There are 3 aircraft carriers parked in the region, plus US air bases. Iran launched over 2500 missiles at the UAE alone. The US destroyed much of Iran's military, the only thing they have left is the ability to launch missiles and drones at ships or do terrorist style attacks.

But if you want to suggest that the US is a paper tiger here, that just makes everyone a paper tiger. Nobody can stop Iran. Ok.

> The UAE primarily sells its oil to China, which is its largest export partner, followed by countries like India and Japan. the United States cannot do this without not only obliterating energy markets for an ally, but strengthening alliances between china and india. It is likely that should the US attempt such a move, China would respond with retaliatory technology tariffs and a reduction of agricultural trade.

Then we would react with export controls, additional weapons shipments to allies in the region, work with Japan and South Korea to start weapons programs, blockade Chinese trade, there's a million things we can do too.

> the UAE did not "need protection" from any regional military threat until the United States used regional peace talks as cover to launch a surprise attack against Iran. the UAE would still likely be an OPEC member state had the US not unilaterally chosen to obliterate global energy markets for no consistent or clearly defined reason.

And yet, UAE wants the US in the region and in UAE soil. Iran launched over 2500 missiles at the UAE, including civilian targets. Not sure your comment here reflects reality.

> This conflict was well defined as geopolitical suicide for nearly forty years; its what kept the peace.

Things change. US is the #1 energy producing country in the world in terms of oil, gas, &c. We're less dependent on the Middle East, plus we've basically secured the Venezuelan oil supply. Seems to me that what was once geopolitical suicide is no longer the case. We're here today, and life in the US just goes on as normal.

> All simulations and tabletop exercises predicted such an incursion would send global energy markets into panic, trade markets into recession, and produce no meaningful advancement of either regional security or regime change.

TBD

> Iran is backed by powerful allies and has shown numerous times it can meet each US escalation with yet more regional attacks.

Yes, Iran, who is supplying Russia with drones and such for its war against Ukraine is an ally, as is China.

> We have tried escalation and failed, burned through a decade of advanced missiles fighting cheap drones, and have no defined objective politically or militarily for this conflict.

We have not burned through a decade of advanced missiles fighting cheap drones. We can build our own cheap drones and are working on scaling production, and just because you don't understand the political or military objective doesn't mean that there isn't one, however poorly or well-thought it may be.

The US has very much escalated and sits now at the top of the escalation ladder. Iran has been trying to get the US to the negotiating table due to the blockade. Iran can launch its missiles as it likes to at civilian targets in the Gulf. We + allies will just get better at shooting them down. Who cares? If Iran wants to try to escalate we'll just escalate further, blow up more stuff, keep the oil from flowing if we decide. It doesn't really hurt us much.

> The war did not had to start at all and is causing considerable harm already. Iran feeling pain does not mean surrounding states were protected - instead they were put into harms way.

They were always in harm's way. The war could have waited, and Iran could have doubled or tripled its missile stockpile and then they really would have been in harm's way. You're falling in to the same trap I mentioned "country does X, end of analysis".

> Well, Iran closed the Straight and the world is facing biggest oil crises since 90ties. US was in fact incapable to prevent it.

Any country is incapable of preventing it then. Iran could always just mine the straight and threaten to launch missiles and go hide in the mountains. If Iran wasn't doing all of these awful things in the region, none of this would be happening.

>Well, Iran closed the Straight and the world is facing biggest oil crises since 90ties. US was in fact incapable to prevent it. Even if the Straight opened today, harm already happened and will continue to happen for months. And I dont think it will open today.

Adjusted for inflation the price of oil isn't even the highest it's been this decade, let alone historically.

The price tripled from 2003-2008 as well.

>The war did not had to start at all

We probably won't know for twenty years if that's true or not. It's not as Iran's been some peaceful country for the last twenty years, they actively have sponsored terrorist organizations with the purpose of destabilizing the region. The country also sits on a wealth of natural resources but was solely researching nuclear power for peaceful purposes.

Really the big lesson for the next superpower is to simply act earlier. If you don't care about winning and just being a thorn in everyone's side, ballistic missiles are a great investment, and it should have been taken more seriously when Iran started stockpiling thousands of them.

Yea there is some truth to that. The US is still in a wartime economy and cultural mode of thinking post-WWII (military budget, highway and infrastructure build, cultural characteristics around guns [1] and such). The downside is the degradation of quality of life, rage-bait, stress, those sorts of things. But if we have Americans constantly freaking out (and to some extent they should - being #1 is tough) about Chyna that does put pressure on the government to take these concerns seriously if they previously were not.

[1] Not a 2nd Amendment criticism, I’m a strong supporter. More so the folks who load up on ammo and “cool” gear and all that stuff.

Uh, from the UAE's perspective it is much worse. They sold many $Bs worth of oil and had become a global tourist hub, now they can't do those things. They are being patient for the time being but there's a limit. We don't know what that limit is but if 6 months go by and the Strait's not open can we really expect them to not pay Iran a toll and price their oil in yuan?

What are you talking about? This level of escalation hasn’t happened for at least a quarter century. I know, because I’ve lived in the gulf for large parts of that period

Which country?

Kuwait was “saved” by the US. The Iraq invasion was approved by the GCC, partly as payback for Kuwait, and anyways Iraq is not part of the GCC. The Qatar blockade was self-inflicted (and extremely stupid).