Gulf economies suffer brunt of Iran war as recession risk looms

From energy exports to tourism, the economies of Gulf nations are at risk from a prolonged conflict in the Middle East.

As the economic fallout of the United States and Israel’s war with Iran reverberates across the globe, the economies of the Gulf are suffering some of the worst damage.

Iran has launched continuous attacks on Gulf states since the onset of the conflict on February 28, arguing that it is attacking military bases used by the US for the war. Gulf nations have rejected Tehran’s claims, insisting the attacks on them are unjustified.

The Iranian strikes have upended energy production and inflicted major disruptions to tourism and travel, putting the region at risk of some of the most severe economic harm since the 1990-1991 Gulf War.

“Disruptions to aviation, tourism, shipping routes and energy exports combined with higher insurance premiums and freight costs mean the region is likely losing hundreds of millions of dollars per day in economic activity,” said Khaled Almezaini, an associate professor of politics and international relations at Zayed University in Dubai in the United Arab Emirates.

“The exact scale will depend largely on how long disruptions to trade routes, ports and airspace continue.”