By Gram Slattery and Timour Azhari
ABU DHABI, June 23 (Reuters) - U.S. Secretary of State Marco Rubio faces a delicate mission this week pitching Washington's Iran peace deal to Gulf Arab leaders who fear excessive concessions will strengthen Tehran and reshape the region's security balance and oil flows.
Rubio will meet them in the United Arab Emirates on Tuesday, before traveling to Kuwait and Bahrain, where he will meet officials from the Gulf Cooperation Council, a grouping of monarchies that also
includes Saudi Arabia, Qatar and Oman.
At issue are elements of a draft agreement that include no limits on Iran’s ballistic missiles, a proposed $300 billion reconstruction fund and provisions that could expand Tehran’s regional influence and control over critical oil shipping lanes.
All six GCC nations are strategic U.S. allies that offered some degree of logistical support to Washington during the U.S.-Israeli war with Iran that began four months ago and all were buffeted by Iranian airstrikes as a result.
Some of those countries are feeling privately disappointed - and surprised - by an interim deal that could open the door to U.S. normalization with Iran, a predominantly Shi'ite country that most Sunni GCC states consider their main adversary.
The opinions of these nations matter to U.S. policymakers.
The UAE, Saudi Arabia, Qatar, Kuwait and Bahrain all host U.S. military bases that in turn make up the backbone of America's security architecture in the Middle East. Should any of those countries rethink their security relationship with the U.S., even in a subtle way, it could have a significant impact on U.S. military strategy in the region.
For Rubio personally, the trip requires a balancing act.
While America's top diplomat needs to assuage regional allies, he must do so without appearing to criticize the U.S.-Iran memorandum of understanding. President Donald Trump, who signed the accord last week, remains firmly behind it despite criticism from some of his fellow Republicans in Congress who have accused the administration of capitulating to Tehran.
Andrew Peek, a former deputy assistant secretary of state for Iraq and Iran who served on Trump's National Security Council during both his terms, argued that Rubio could reassure any nervous allies by pointing out that Trump has a history of being tough on the Islamic Republic.
"I think you can just remind them that the president has conducted extremely hawkish policies toward Iran - and if this MoU falls through, he will have no compunction about going back to striking them," said Peek, who is now at the Atlantic Council think tank.
PEACE - BUT AT WHAT COST?
Leaders from all GCC countries hosting Rubio or present at this week's talks at least publicly pushed for a diplomatic solution before the war kicked off in February. Most also pushed for a diplomatic off-ramp during the conflict, even as they in practice facilitated the U.S. war effort.
Still, the specific terms of the MoU privately shocked regional officials, according to analysts and diplomats.
One concern relates to ballistic missiles. Throughout the war, the Trump administration said that destroying Iran's ballistic missile capacity was a central goal. That objective aligned with the interests of the Sunni Gulf states as - unlike the U.S. - all are well within Iran's ballistic range and have been targeted by Iranian missiles.
The MoU, however, does not mention Iranian missiles at all, and Trump himself has in recent days said that denying Tehran such weapons would be "unfair."
The MoU also foresees a $300 billion reconstruction fund for Tehran, which regional neighbors fear could allow the Islamic Republic to build up its military capacity, while increasing support for regional proxy groups that could destabilize governments throughout the region.
Bahrain's mainly Sunni leadership, in particular, is concerned that a well-funded Iran could foment an uprising among the island nation's mainly Shi'ite populace, analysts say. During the Arab Spring, the nation of roughly 1.65 million was the site of massive recurring street protests.
Iran has denied any covert attempts to stoke unrest but has publicly expressed support for Bahraini Shi'ite activists in the past.
The accord, as written, also appears to concede that Iran could have a key role in controlling the Strait of Hormuz going forward, a major concern for Kuwait, Qatar and Saudi Arabia, which rely on the strait to export oil and gas.
More broadly, U.S. officials have begun speaking about a broader reset for Tehran, a potential transformation that most GCC states are wary of. On Saturday, Vice President JD Vance said the U.S. was willing to "fundamentally transform" its relationship with Tehran.
"The agreement rehabilitates Tehran's regime as a regional power," veteran Saudi columnist Abdulrahman Al-Rashed wrote in Saudi English-language daily Arab News last week.
"Most of the funds Tehran will acquire in the coming weeks are likely to go primarily towards strengthening the military position, not to support living conditions or the Iranian economy."
(Reporting by Gram Slattery in Abu Dhabi and Timour Azhari in Riyadh; Editing by Howard Goller)
