This paper aims, first, to explore the shortcomings that have derived from ignoring race in Gulf studies, and, second, to suggest that centering the region in race and ethnic studies, which tend to favor American exceptionalist and Atlantic Ocean framings, has the potential to deepen our understanding of global race hierarchies, the transnational historical intimacies through which they emerge, and their contemporary localizations. Our argument is based on our ethnographic research with various inhabitants of three cities of the Arabian Peninsula, and on readings in the fields of Gulf studies and race and ethnic studies. We explore how the lack of a racial analysis prevents scholars from effectively interrogating past and present effects of colonialism, imperialism, and slavery in the Peninsula. Race is also critical to understanding the ways that labor stratification and capitalist accumulation in the region are legitimized through essentialized ideas of “national" difference. Race is a technology that reifies the national fantasy of a pure Arab Gulf citizen and is used by state actors and everyday residents to reproduce stereotypes about the region’s inhabitants. And racist presumptions naturalize the status of white and Western researchers as objective outsiders. Yet, scholarship produced in the last decade also reveals the potential of Arabian Peninsula studies to make a valuable contribution to the field of race and ethnic studies. We suggest that the region is central to the study of contemporary racial capitalism, and especially to understanding how transnational job markets transform nationalities into racial categories. The racialization of nationalities through differential value placed on human labor intersects with class, gender, and sexuality/biopolitical regimes. As Gulf societies have the highest rates of immigration in the world, they are also globally relevant places to study the rapid circulation and sedimentation of racial categories. People are constantly moving in and out of Gulf cities, bringing with them ideas about difference and belonging that not only impact localized categories but also change immigrant perceptions which they then bring back to their home communities, and which circulate globally.