Middle East crisis threatens millions of jobs worldwide, ILO warns

The International Labor Organization (ILO) warned Monday that the ongoing Middle East crisis is increasingly weighing on global labor markets, threatening millions of jobs, reducing incomes, and worsening working conditions far beyond the region.

The ILO report said higher energy costs, disrupted trade and transport routes, supply chain pressures, weaker tourism, and migration constraints are already affecting economies worldwide, with risks expected to intensify if the conflict continues.

Under a scenario in which oil prices rise around 50% above their early 2026 average, global working hours could decline by 0.5% in 2026 and 1.1% in 2027, equivalent to 14 million and 38 million full-time jobs, respectively, according to the report.

Real labor incomes could meanwhile fall by 1.1% in 2026 and 3% in 2027, representing losses of approximately $1.1 trillion and $3 trillion globally.

Sangheon Lee, chief economist of the ILO and author of the report, said the crisis was becoming “a slow-moving and potentially long-lasting shock” for workers worldwide.

Arab States, Asia most exposed

The report identified Arab States and Asia-Pacific economies as the regions most exposed to the fallout because of their reliance on Gulf energy flows, trade routes, and labor migration.

In Arab States, working hours could decline by as much as 10.2% under a severe escalation scenario, exceeding losses seen during the COVID-19 pandemic, the report said.

The report also warned that labor migration to Gulf countries has slowed sharply since the crisis began, while remittance flows to South and Southeast Asia are showing early signs of weakening.

The ILO called for employment-focused crisis responses, including stronger protections for informal workers, migrants, refugees, and small businesses.

Regional tensions in the Middle East have escalated since the US and Israel launched strikes against Iran on Feb. 28, triggering retaliation from Tehran against Israel, as well as US allies in the Gulf, along with the closure of the Strait of Hormuz. The war has disrupted global energy supplies, especially to Asian nations.