Bahrain’s precarious position

For an island nation of almost 1.5 million people, Bahrain's relevance in international relations continues to increase. Since normalizing ties with Israel, Bahrain has thrown its rivalry with Iran into full throttle, and in turn, has fully committed itself to an unofficial tripartite defensive arrangement of Saudi Arabia, Israel, and the US.

This predicament has placed Bahrain firmly within the camp of the US and Israel, situating Bahrain's regional political trajectory towards a firmer anti-Iran stance. This was materialized when it made its airspace and military infrastructure operational during the war. In return, these bases became, in Iran's view, legitimate targets as Bahrain also hosts the headquarters of the US Navy's Fifth Fleet and Naval Forces Central Command which has also been a continuous target for Iran.

Bahrain and Iran

In 2022, the Saudi-Iranian rapprochement, brokered by China, seemed, in retrospect, to bring Iran and Bahrain closer together. In recent years, hopes for a full normalization of relations between Iran and Bahrain had grown, spurred by the Bahraini Foreign Minister's visit to Tehran in June 2024, where the two sides agreed to begin talks aimed at establishing a mechanism to resume diplomatic ties, followed by Iranian Foreign Minister Araghchi's visit to Bahrain in October 2024. During the 2025 war between Iran and Israel, Bahrain maintained a position of neutrality, seeking to balance its interests on both fronts — preserving its recently established relationship with Israel while avoiding actions that could further strain ties with Iran.

But this current episode has strained the relationship, pulling it back down to levels reminiscent of the 2011 uprising.

From management to confrontation

Since the start of the war, Bahrain has utilized every tool at its disposal to pressure and isolate Iran diplomatically. Its seat on the UN Security Council gave the small island a platform to challenge Tehran through international condemnation, the rallying of like-minded states under the legitimacy of a multilateral institution, and the pursuit of sanctions. Back in May, Bahrain led a UN resolution calling for free passage through international waterways and gained the support of 112 nations.

Samyar Rostami writing with the New Eastern Outlook, a journal covering news and geopolitical analysis on Africa and Asia, claims that Iran views this not as a legitimate use of the Council but as an attempt by Bahrain to redirect the legal process itself,  turning a forum meant for neutral dispute resolution into a mechanism of political pressure. From Tehran's perspective, Bahrain's actions have no real grounding in international law, and Manama is accused of hijacking and manipulating the UNSC's proper legal course to serve its own campaign against Iran. According to him, Manama is “trying to build an international consensus against Iran’s approach”.

Bahrain's push at the UN Security Council marks a shift in its approach to Iran. Manama's posture was one of cautious accommodation, seeking to keep Tehran placated and avoid direct provocation. Its current use of the UNSC platform to pursue sanctions and international condemnation signals something different: rather than managing the relationship, Bahrain is now actively confronting it.

Bahrain’s vulnerability

Frank Kane, writing for AGBI, lays out the economic impact of the war on Bahrain, arguing that Iran's strikes have hit all three pillars of the Bahraini economy at once.

Kane notes that Bahrain's economy and finances were already the most strained in the GCC when the war broke out on February 28, and the conflict has only compounded that fragility. Beyond disrupting exports through the closure of the Strait of Hormuz, a blow felt across the Gulf — Iran targeted Bahrain directly and repeatedly, in part because it hosts the US Fifth Fleet's headquarters. In March, a drone strike set fire to the Bapco refinery complex at Sitra, which supplies roughly 70 percent of government revenue, forcing a force majeure declaration; storage tanks were struck again weeks later. Iran also hit Aluminium Bahrain, the world's largest single-site smelter outside China, compounding output cuts the company had already made due to the Hormuz disruption. Meanwhile, Manama's airport was shut for most of the war, and Gulf Air relocated operations to Dammam, further damaging tourism.

Kane frames this as Bahrain absorbing disproportionate collateral damage in a war between Washington and Tehran, despite being the Gulf state least equipped to withstand it. He points to grim fiscal fundamentals, an 11 percent budget deficit, public debt at 134 percent of GDP (the worst in the GCC), and an oil breakeven price near $130 a barrel, that left ratings agencies pushing Bahrain further into junk territory, with Fitch explicitly citing the war in an April downgrade. Citing Capital Economics, Kane notes Bahrain's economy is expected to contract 9.3 percent this year, worse than both Saudi Arabia and the UAE, with recovery contingent on tourism and trade normalizing over what could take up to three years.

Unlike Qatar and Kuwait, which Kane says can lean on strong balance sheets to stimulate post-war recovery, Bahrain has little room to maneuver on its own, its sovereign wealth fund, Mumtalakat, manages a fraction of what its larger neighbors control. As a result, Kane argues, Bahrain has had to borrow financial resilience from wealthier neighbors: while past bailouts were traditionally Saudi-led, this time it was Abu Dhabi that stepped in first, with a $5.5 billion currency swap signed in April.

The war has had an unprecedented impact on Bahrain, presenting the country's toughest test since the 2011 uprising. One thing is certain: the Gulf states at the forefront of this war are eager to see it end, so that global trade — and with it, their security and survival — can resume.