The war between Iran and the United States has caused around $200 billion in damage across Gulf countries, with total economic losses potentially reaching almost four times that amount by 2030, according to a report by Allianz Trade released on Wednesday.
The report estimates that physical damage across the region stands at slightly more than $200 billion, while the cumulative economic cost could reach $790 billion by the end of the decade.
Energy infrastructure bears the brunt of the damage
The conflict began in late February, when the United States and Israel launched strikes against Iran. Tehran responded by closing the Strait of Hormuz and targeting neighbouring countries allied with Washington, particularly in the Gulf.
US military bases and civilian infrastructure across the region sustained damage. The situation escalated further in July, when Yemen’s Iran-aligned Houthi rebels entered the conflict.
The Houthis have exchanged near-daily attacks with neighbouring Saudi Arabia, which leads a military coalition supporting Yemen’s government. They have also regularly claimed responsibility for strikes targeting Riyadh airport and oil facilities.
“Material damage across the region is estimated at slightly over $200 billion, concentrated mainly in economies dependent on the Strait of Hormuz, particularly in energy infrastructure,” the Allianz Trade report said.
More than 80 energy facilities were hit during the war, mainly in Kuwait, Qatar and Bahrain. Around one-third suffered what the report described as severe damage.
The assessment covers the six members of the Gulf Cooperation Council: Saudi Arabia, Oman, Qatar, Bahrain, the United Arab Emirates and Kuwait.
Economic losses could reach $790bn
The conflict has also affected tourism and the property sector, which are expected to experience slower growth over the coming years.
“The total cost of the war for Gulf countries is expected to reach $790 billion, equivalent to a cumulative shortfall of 5.9% of GDP compared with the pre-war trend by 2030,” the report said.
The figure represents cumulative lost economic output between 2026 and 2030. It measures the difference between what the region would have produced under its pre-war growth trajectory and what it is now expected to produce.
To offset the losses, Gulf governments will need to increase domestic spending, the report said. Government priorities are expected to shift away from major projects towards resilience and security-related needs.
The report also warns of a sharp increase in the region’s debt.
Spending on infrastructure and defence is expected to reach between $380 billion and $400 billion by 2030.
Saudi economy faces contraction
Saudi Arabia, one of the world’s largest oil producers, is expected to see its economy contract by 3.3%, according to the International Monetary Fund.
Despite the conflict and restricted access to the Bab el-Mandeb Strait due to Houthi attacks, Saudi oil giant Aramco reported a 34.6% increase in net profit in the third quarter, according to figures announced in early November.
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