Military operations in Iran could have a significant impact on the economies of Qatar and Kuwait. To. data Bloomberg, If the Strait of Hormuz is blocked, the GDP of these countries will decrease by 14% this year. Saudi Arabia and the UAE will also suffer economic losses.
The threat of an economic downturn
If the fighting in Iran continues until April and closes the Strait of Hormuz for two months, it will lead to a deep economic downturn in the region. Qatar and Kuwait will suffer the most, with their GDP may shrink by 14% in 2026.
This will be the worst economic downturn for these states since the early 1990s. Saudi Arabia and the UAE will also feel the effects, albeit to a lesser extent.
- Qatar: GDP expected to decline by 14%
- Kuwait: expected GDP decline by 14%
- Saudi Arabia: GDP decline by 3%
- UAE: GDP decline by 5%
Causes of economic risks
A key risk factor is the possible closure of the Strait of Hormuz, through which a significant portion of global oil exports pass. Stopping the transportation of oil could lead to a sharp decline in the income of the Gulf countries.
The region's economies are dependent on energy exports, so even a short-term closure of the strait would lead to significant financial losses. Analysts warn of the possibility of prolonged economic instability if the conflict escalates.
Context.
The Strait of Hormuz is a strategic route for transporting oil from the Middle East. Most energy exports from the Gulf countries go through this waterway.
Qatar and Kuwait have not faced such large-scale economic challenges since the early 1990s. Experts note that the situation remains tense and depends on developments in the region.
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