Tension in the Gulf will remain high until there is a confirmed return to talks between the West and Iran over its nuclear programme. Even then, there has been a serious loss of faith on both sides in recent months as the Iranians will resent the new harsher sanctions and the US and its allies will highlight any indications from the IAEA on a possible weapons dimension to Iran's nuclear programme as cause for isolating the Islamic Republic from diplomatic and economic openings.
Were the Iranians to make some concessions on the nuclear issue, perhaps slowing its enrichment or allowing a fuel swap then we would expect that the West may ease some sanctions (particularly on Iran's oil sector) and would encourage a return to comprehensive talks. While there hasn't been any indication that either side is pushing hard for a return to talks the stakes are so high at present that quiet diplomatic meetings may be possible without either side looking like they've given away too much.
In the still unlikely event that Iran blocked the Strait of Hormuz, the Gulf Arab states would be most exposed as they would lose their main export channel for crude oil and liquefied natural gas. Saudi Arabia and the UAE have been speeding up their work on alternative pipeline routes, adding delays to shipments and contributing to further spikes in oil prices. For a country like Qatar, that lacks pipeline access out of the region, its exports would effectively be stuck in the Gulf. We still expect all parties to be committed to avoiding a military clash but misinterpretation between naval movements could cause a minor confrontation to escalate, possibly leading into more direct conflict between US warships and their Iranian counterparts or their shore-based support facilities.
The Middle East renewables market is one of two halves. There still doesn't appear to be much strong interest in developing renewable energy in the energy resource rich countries in the Gulf as they maintain investment in oil and gas and fuel intensive infrastructure projects. However, for countries in North Africa, real leg work has been done to make a dent in some countries energy deficits. Morocco is committed to spending up to US$9 on renewable energy. Algeria too has expressed some interest in developing renewables to allow more hydrocarbons for export.
