The Middle East’s pivotal position in a hydrocarbon-based global capitalism carries enormous ramifications for the region and the Gulf Arab states in particular. This chapter aims to present key debates associated with this transformation. It begins with an overview of the Rentier State Theory (RST). RST theorists foreground the impact of oil rents on Gulf states, drawing causal relationships between these rents and the characteristics of the Gulf’s political economy. The chapter turns to a critique of some of its core assumptions, notably its theorization of state and class. It argues that a more satisfactory understanding of the political economy of oil in the Gulf can be found through a return to the categories of class and capitalism, and a deeper appreciation of the ways in which the Gulf is located in the wider dynamics of accumulation in the world market.