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Trump at a Gulf Summit in Riyadh in 2017. Photo: Bandar Algaloud/Saudi handout via Getty

The UAE and Saudi Arabia will be closely monitoring any moves from Washington and Tehran over a delicate few weeks ahead.

Why it matters: Jan. 3 will mark the one-year anniversary of the U.S. strike that killed Iranian Gen. Qasem Soleimani and Iraqi militia leader Abu Mahdi Al-Muhandis in Baghdad. In the past few weeks, there have been echoes of the tensions that preceded that U.S. attack.

Driving the news: Last week an attack — still unclaimed — on an oil tanker moored off Saudi Arabia’s Red Sea coast was the second in less than a month to target international shipping.

  • In November, a missile strike on a Saudi Aramco plant near Jeddah was claimed by Yemen’s Iran-backed Houthi rebels.

Flashback: In the months leading up to the Soleimani killing, there were incidents of sabotage against vessels in the Arabian Gulf and Houthi-claimed missile strikes on Saudi oil facilities.

  • Iran was then seen to be playing its hand amid increasing sanctions pressure from the U.S. after President Trump withdrew from the 2015 nuclear deal. The killing of Soleimani proved to be an apex of that cycle of tensions.

The state of play: These latest incidents, including the assassination of Iran's top nuclear scientist, Mohsen Fakhrizadeh, have created a new cycle of tensions in the region ahead of President-elect Biden's inauguration.

  • Biden is expected to shift the American posture from maximum pressure to re-engagement with Iran.
  • The concern among Gulf countries is that Iran will test the new administration, or try to take advantage of them.
  • Both the UAE and Saudi Arabia responded to the provocations in 2019 with restraint, and they remain focused on de-escalation.

Worth noting: There are at least two new factors at play, in addition to Biden's election.

  • The U.S. has built up its military force in the Gulf, including a bigger naval presence. And the UAE, Bahrain and other Arab nations have established closer ties with Israel, offering a genuine counterbalance to Iran and its allies and proxies.

Go deeper

Jan 27, 2021 - World

Netanyahu doesn't want a fight with Biden over Iran — yet

Photo illustration: Aïda Amer/Axios. Photos: Eric Baradat (AFP), Gali Tibbon (AFP)/Getty Images

Israeli Prime Minister Benjamin Netanyahu, hoping to avoid an immediate clash with President Biden over Iran, will give dialogue a chance, Israeli officials say.

Why it matters: Biden intends to try to resume the 2015 nuclear deal, which Netanyahu vehemently opposes. The two are on a collision course, and memories are fresh of the crisis in U.S.-Israel relations when Netanyahu was publicly campaigning against Barack Obama's attempts to reach a deal — including in a speech to Congress.

Dan Primack, author of Pro Rata
52 mins ago - Politics & Policy

Biden starts negotiating to raise capital gains tax rate

Illustration: Aïda Amer/Axios

President Biden wants to nearly double the capital gains tax paid by wealthy Americans, as first reported yesterday by Bloomberg and confirmed by Axios.

Counterintuitive: Biden's plan is better for private fund managers (hedge, PE, VC, etc.) than what he proposed during the campaign.

Scoop: Caitlyn Jenner makes it official for California governor

Caitlyn Jenner. Photo: Paul Archuleta/Getty Images

Former Olympic decathlete and reality TV star Caitlyn Jenner has filed her initial paperwork to run for governor of California and will officially announce her bid later today, her campaign tells Axios.

The big picture: Jenner, a longtime Republican, is seeking to replace Democratic Gov. Gavin Newsom in a recall election, hoping her celebrity status and name recognition can yield an upset in the nation's most populous state.