ANKARA

The economic impact of the Middle East conflict could exceed $50 billion as Gulf countries face major energy revenue losses due to rising tensions and the closure of the Strait of Hormuz.

The US and Israeli attacks on Iran and Iran's retaliations caused a serious economic slowdown in many sectors in Gulf countries, particularly in energy production, energy facilities, trade routes, logistics, finance, and tourism infrastructure.

The world is experiencing one of the largest oil supply disruptions in modern history, TESPAM President Oguzhan Akyener told Anadolu.

Daily oil exports through the Strait of Hormuz from Iran, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates (UAE), and Bahrain decreased from 12.3 million barrels to 7.8 million barrels, Akyener said.

The balance sheet for the war's first four weeks clearly revealed the extent of the damage to regional economies, with oil revenue losses reaching $15.3 billion, he added.

Including damage to energy facilities and disruptions in liquefied natural gas (LNG) exports, total losses could exceed $50 billion, Akyener noted.

Global economies have acted to mitigate the fallout and limit further economic losses amid the conflict, but the biggest losers have been Gulf exporters, Asian oil and LNG importers, tanker transportation, and countries dependent on trade through the Strait of Hormuz, Akyener said.

"Following the crisis, Central Asian oil, Eastern Mediterranean gas, oil production in Africa, and US LNG exports have gained importance. In other words, the global energy system is becoming more fragmented and multi-centered," he explained.

Strategic importance of Strait of Hormuz

The Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the Indian Ocean, is considered a strategic "chokepoint" in energy trade. Gulf countries such as Qatar, Kuwait, and Bahrain are almost %100 dependent on the Strait of Hormuz.

The Gulf produces about one-third of global oil—around 30 million barrels per day—and a significant share of oil and LNG exports pass through the Strait of Hormuz, including roughly 20% of global LNG and about 25% of seaborne oil shipments.

Major Asian economies such as China, Japan, South Korea, and India import significant amounts of oil from the Gulf region.

Iraq, Saudi Arabia, the UAE, and Iran, however, can export part of their production via pipelines without using the strait.

Saudi Arabia, which is trying to compensate for its losses through pipelines, is turning to the East-West Crude Oil Pipeline, which has a capacity of 5 million barrels per day and stretches from the east to the west of the country.

The UAE is utilizing the Abu Dhabi Crude Oil Pipeline, which carries 1.5 million barrels per day from the capital Abu Dhabi to Fujairah on the Gulf of Oman coast. Iraq can access global markets via the Kirkuk-Ceyhan Oil Pipeline.