Gulf economies to shrink by four percent as Iran war hits trade

The World Bank expects the six Gulf Cooperation Council economies to shrink by an average of 4.3 percent this year, Euronews and beninwebtv.com reported. Higher crude oil prices have failed to offset lower export volumes, which cut overall output and government revenues. The ongoing conflict in Iran has disrupted energy exports and aviation across the region. [1][3]

The trade disruption extends to Europe, where buyers have had to seek alternatives for missing gas supplies, according to Euronews. Provisional Kpler data cited by Reuters showed Middle Eastern crude exports managed to exceed pre-war levels on 14 days in September, using routes through Hormuz and alternative channels. [1]

The 2026 conflict in Iran, which included the closure of the Strait of Hormuz, caused acute supply shortages and heightened risks of recession. The International Energy Agency previously described the situation as the largest supply disruption in the history of the global oil market, as FTMQ News reported earlier. [5][7][8]

The World Bank Group is an international development organization headquartered in Washington, D.C. that provides loans to developing nations. The regional forecast highlights how trade damage continues to outweigh oil price gains across the Middle East. [1][4]