The recent U.S.-Iran nuclear deal, though still preliminary, might lead to a reshaping of Gulf geopolitics. Both have much at stake: the U.S. would achieve a major non-proliferation success, Iran would get respite from sanctions and enjoy international recognition. A deal could open up new possibilities for U.S.-Iran cooperation on Syria, Iraq, Afghanistan, and the fight against Al Qaeda. Regional powers such as Turkey and Russia can live with a U.S.-Iran détente, but Israel and Saudi Arabia have good reasons to fear its consequences. The U.S. will have to decide whether pleasing its allies better serves its interest than a deal with Iran.