Trump pushes Saudi Arabia and Qatar to recognize Israel as part of Iran deal framework

Donald Trump is trying to turn the Abraham Accords into a package deal. In a Truth Social post on May 25, the former president called on Saudi Arabia, Qatar, and a handful of other Muslim-majority nations to normalize relations with Israel, framing participation as “mandatory” for any country hoping to be part of a broader agreement with Iran.

The list of countries Trump wants on board doesn’t stop at the Gulf states. He also named Pakistan, Turkey, Egypt, and Jordan as nations that should sign onto the accords.

The pitch, and the pushback

Trump’s post came on the heels of a conference call held around May 23-24 with leaders from several Middle Eastern nations to discuss what he described as a framework for resolving tensions with Iran. He characterized those negotiations as progressing positively, particularly in light of escalating confrontations near the Strait of Hormuz.

Saudi Arabia and Qatar both indicated that normalization with Israel depends on meaningful progress toward Palestinian statehood. Pakistan went further. Islamabad categorically rejected the idea of participating in any normalization effort with Israel. No conditions, no caveats. Just a flat no.

Neither Israel nor several other involved parties have issued public statements in response to Trump’s call.

Abraham Accords: the story so far

The original Abraham Accords were signed in September 2020, with the UAE and Bahrain becoming the first Arab nations to formally normalize relations with Israel. Morocco and Sudan later joined the framework. Saudi Arabia’s participation would represent the single most consequential normalization event in the region, given Saudi Arabia’s role as custodian of Islam’s two holiest sites and its outsized influence across the Muslim world.

Previous attempts to bring Saudi Arabia into the fold stalled over the Palestinian statehood issue, and the current push appears to face the same fundamental obstacle. The difference now is that Trump is attempting to create a new incentive structure by tying recognition to participation in an Iran deal framework.

What this means for crypto investors

There is no indication of linkage between the Abraham Accords discussions, the Iran negotiations, and cryptocurrency or blockchain developments. The immediate market impact on crypto is effectively zero.

The Strait of Hormuz factor is the one worth monitoring most closely. Roughly a fifth of the world’s oil supply passes through that waterway. Any military confrontation there would send shockwaves through traditional markets.