If the war continues into April, Qatar and Kuwait could lose up to 14% of their GDP in 2026 due to the two-month closure of the Strait of Hormuz, according to a forecast by Goldman Sachs economist Farouk Soussa. This could be the worst economic downturn for these countries since the early 1990s, when Iraq's invasion of Kuwait led to the Gulf War and chaos in global oil markets, Bloomberg notes.
Saudi Arabia and the United Arab Emirates may have less to lose thanks to the ability to divert oil flows through alternate routes, but their economies would still likely shrink by about 3% and 5% respectively, which would be the biggest hit since the 2020 pandemic, the article said.
Problems in the oil sector could affect all Gulf countries as they affect real estate, tourism and investment, the agency notes.
According to Bloomberg, on Friday, March 13, the price of Brent oil exceeded $103 per barrel amid the shutdown of the Strait of Hormuz and production cuts in Saudi Arabia and the UAE. Global gas markets have also been rocked by the collapse of Qatar's LNG exports, while Bahrain has begun cutting production at the world's leading aluminum producer, partly due to the halt in shipping.
Context
On the morning of February 28, Israel and the United States announced a military operation in Iran (Israel called it “Lion’s Roar,” the United States called it “Epic Fury”). White House President Donald Trump has announced his intention to protect the American people by eliminating threats from the Iranian regime.
Tehran threatened a “crushing” retaliatory strike and launched missile and drone strikes on Israel and several Middle Eastern countries where American military bases are located.
On March 2, Trump said that a “big wave” of attacks on Iran was still ahead and the US operation could take four weeks.
On March 3, The New York Times reported that since the start of the US-Israeli operation in Iran and Tehran's retaliatory strikes, more than 870 people have died in the Middle East. The UAE was the country that suffered the most attacks from Iran, with approximately 800 strikes.
On March 5, Bloomberg wrote that the Gulf countries are outraged that they have become the center of a war that they did not start.
