The Gulf region due to its vast oil and gas reserves has attracted world attention especially the major powers to meet their energy needs. The USA has declared it as a vital national security interest and is bent upon using all elements of national power to ensure the energy resources of Gulf are available for US and its allies without preconditions. The oil crises of 1970s were the watershed for the US policy planners who considered guaranteed and uninterrupted Sea Lines of Communications (SLOCs) for transportation of energy needs. Therefore, to safeguard any eventuality, the USA commenced basing of its military for protection of SLOCs and later in the transformation of Middle East as a result of US actions in response to War on Terror and regime change philosophy, the USA and other Extra Regional Forces (ERF) have established permanent bases in the Gulf with the aim of conducting counter terrorism operations and providing stability to highly volatile region. The Iranian nuclear aspiration is not new phenomena, which from Iran’s perspective is the only deterrent in the face of credible threat surrounding it with the presence of ERF, ever hostile Israel and now Saudi Arabia leading a dominant anti-Iranian alliance. While other Gulf Cooperation Council (GCC) countries, Israel are pursuing nuclear path, but not demonized by USA and its allies while uateral pressure is being applied on Iran for capping and later abandoning nuclear capabilities. This research article therefore, sketches the overall security environments of Middle East and Gulf, highlighting transformation, power transition and evolving balance of power. The nuclear aspects have been covered in a wholesome manner in order to build comprehensive picture of nuclearization in the Gulf and its impact on regional stability.