Fixing the oil crisis might not fix the Persian Gulf

The war with Iran has inflicted severe economic damage across the Persian Gulf, threatening both energy exports and long-term diversification efforts. While the closure of the Strait of Hormuz has cost the region over $15 billion in immediate revenue, the impact varies significantly by nation; Saudi Arabia utilizes pipelines to maintain exports at higher prices, whereas Qatar faces a $26 billion recovery bill after missile attacks crippled its natural gas facilities. Middle East Institute scholar Karen Young highlights that the non-oil sectors—including tourism, retail, and real estate—face the most precarious future as regional instability drives away the vital expat workforce and disrupts digital infrastructure. With the World Bank slashing GCC growth forecasts to 1.3%, the ability of these nations to weather the conflict depends on their sovereign wealth buffers, ranging from Abu Dhabi’s 20-year reserve to Bahrain’s precarious four-month supply.