The Gulf has been on a roller-coaster ride of highs and lows throughout 2009. It started with oil at under $40 barrel and the world plunging into its deepest recession since 1945. It ends with oil above $70 a barrel and economic recovery under way.

In between, there has been hope and despair, evenly matched on many occasions. The high point came in Cairo on 4 June in President Obama’s new beginning speech to the Islamic world. It raised expectations that quickly collapsed. Israel has fended off US pressure for an end to West Bank settlement expansions and killed Obama’s peace plan at birth.

The Gulf is disappointed, but its leaders have seen it before. The US promised comprehensive Middle East peace after the 1991 Kuwait war. President Clinton spent eight years trying to hothouse a final Israel-Palestine agreement. President Bush garnered Gulf support for the 2003 Iraq invasion by promising an independent Palestinian state. The only difference between Obama and his three predecessors is the brevity of the period between the hope he inspired and the disillusion he bequeathed.

Obama’s oratory failed in Iran as well. His hope that the Islamic republic could be persuaded to reject confrontation and comply with demands about its nuclear programme was given wings in his Nowruz speech in March. But it all depended on the Iranian people rejecting President Ahmadinejad in their June presidential election. The poll was manipulated to return Ahmadinejad. The UN is now considering new sanctions against Iran in the shadow of possible unilateral US or Israeli attacks on its nuclear facilities. It is as if Obama’s Nowruz speech had never happened.

Gaining sovereignty

There have been mixed emotions in Iraq. On 1 January, the US gave up control of Baghdad’s Green Zone to demonstrate that sovereignty had been returned to Iraqis. Obama announced in February a plan to withdraw combat troops in 18 months. The British Army left in April and US forces exited the Iraqi capital in June. But the year ended with bomb attacks in Baghdad and Mosul, mounting tensions between the central government and Iraqi Kurds, and concerns that elections due in January may be postponed.

The news has been more consistently discouraging in areas adjoining the Gulf. The Afghan insurgency persists and has spread into Pakistan. An anti-government rebellion in northwest Yemen spilled into Saudi Arabia in November amid claims that Houthi fighters were being supported by Iran.

The challenges within the GCC have been comparatively mundane. The priority was countering the impact of the recession. In Abu Dhabi, Kuwait, Qatar and Saudi Arabia, government capital spending offset declining private investment and reduced lending by local and international banks. Bahrain and Oman were hit, but comparatively modestly.

The exception was Dubai. It spent 2009 trying to convince creditors it could service its debts. The announcement in February of plans to raise $20bn from bond sales, half of which were immediately bought by the Central Bank of the UAE, proved to be a false dawn. On 25 November, government-owned Dubai World announced it wanted a debt service standstill. It was an admission that default was close. News on 14 December that Abu Dhabi would provide $10bn to Dubai has dispelled immediate worries. But the enthusiasm it engendered was conditioned by concern that the problem had been deferred not solved.

Limited resources

There was no moment of unqualified joy in the GCC in 2009, but good news came at regular intervals. There were setbacks. Dubai’s reputation may never be restored. Even Abu Dhabi’s apparently limitless financial resources have been tested. Plans for the launch of the single Gulf currency in 2010 were hit by the UAE’s decision in May to drop out of monetary union programme.

There were winners. Qatar’s position as the world’s largest LNG exporter was enhanced with the opening of new trains that raised its production capacity to 60 million tonnes. The Abu Dhabi hydrocarbons sector was lifted by one of the most ambitious investment programmes in oil industry history. The first Abu Dhabi Grand Prix in October was a storming success.

But Saudi Arabia has probably the most to celebrate as the old year dies. It has brushed off the downturn with most of its savings intact. The kingdom’s dominance within Opec and vital role in matters of regional consequence have been reaffirmed. Its allies forecast it will dominate the new Gulf decade that begins next month.