“The list of hostages in the war waged by Donald Trump and Benjamin Netanyahu in Iran is extensive. Thousands of miles away, two continents — Asia and Europe — are experiencing a price surge not seen since Russia’s invasion of Ukraine in 2022.
Just around the corner, half a dozen Persian Gulf countries that have suffered the brunt of the attacks — the United Arab Emirates, Iraq, Bahrain, Qatar, Kuwait, and Saudi Arabia — are seeing their oil and gas exports severely restricted by the double blockade of the Strait of Hormuz. It is an economic blow of biblical proportions, already prompting the first calls for help to the United States, the historic ally of this cluster of petrostates and, at the same time, the trigger of a crisis with unpredictable reach and consequences.
The closure of the Strait of Hormuz is triggering a genuine economic earthquake across the Gulf petrostates, prompting the International Monetary Fund (IMF) to forecast a broad recession from which only Saudi Arabia is expected to escape — though not unscathed. Nothing suggested such a scenario just a couple of months ago, when the region was heading into a year of record exports and buoyant growth. […]
The Gulf, for all its shared geography, is far from a homogeneous bloc. Even with a pipeline that allows some of its oil to exit through Turkey, Iraq — the only republic among these states, the rest being petro‑monarchies — is by far the poorest, with a per‑capita income one‑sixth that of Saudi Arabia and 12 times lower than Qatar’s.
Bahrain, though far wealthier than Iraq — its per‑capita GDP is roughly five times higher — has seen its exports of crude and aluminum collapse to virtually zero. Its cushion of hard‑currency reserves is thin compared with its neighbors’, and it carries one of the highest public‑debt burdens in the world, close to 150% of GDP. It’s a structural problem, but it becomes acute when financing costs spike, as they have now.”