This is an old story for most Gulf hands, but now the Islamic Solidarity Sports Foundation in Riyadh has cancelled athletic games scheduled for Tehran because Iran insisted on putting "Persian Gulf" on the medals. The Arab world is adamant in calling it Al-Khalij al-‘Arabi, the Arab Gulf, and Iranians are equally insistent in calling it the Persian Gulf, and insist it's always been so-called.
This is a heated issue for Arabs and Iranians. Some of my predecessors as Editors of The Middle East Journal sought to enforce as Journal style what I myself use in my own writing: just call it "the Gulf" and let your readers choose. But Iranian authors tend to go ballistic if you do that, seeing it as a profound insult to Iranians everywhere.
Arabs are equally consistent about calling it the Arab Gulf, and the GCC, the Gulf Cooperation Council, is officially the Arab Gulf Cooperation Council.
In all honesty, without my trying to figure out what the Sumerians or the Achaemenids may have called it (commenters are free to speak up if they like), it's true that the Classical world tended to call it Sinus Persicus or the Greek equivalent, and all the early Arab geographers either called it Khalij Fars or al-Khalij al-‘Ajami, which pretty much mean the same thing as Persian Gulf. Once in a while it was called the Gulf of Basra or some such, but Arab Gulf is a 20th-Century coinage as far as I can tell. Still, names matter to people, and I still call it The Gulf to avoid conflict or offense, unless there's danger of confusing it with some other gulf. (Actually, when there are no Iranians around to argue with, most Gulf Arabs seem to use "al-Khalij" in speech without the adjective.)
But obviously, it's still a hugely divisive issue. As to the irony of the name "Islamic Solidarity Sports Foundation" in this context, you can make up your own comment.
Oh, and I once saw a Pakistani map that showed the huge body of water south of Asia as the "South Asian Ocean", but that doesn't seem to be as big an issue.