The economic toll of the Gulf conflict is rising sharply, with daily losses exceeding $2 billion as escalating tensions and the effective closure of the Strait of Hormuz disrupt global energy flows.
The shutdown of the key maritime route has led to a steep decline in oil exports from Gulf producers, dealing a significant blow to regional economies.
Exports have dropped by nearly 60%, falling from 25.1 million barrels per day (bpd) to 9.7 million bpd since the conflict began.
The Gulf region produces around 30 million bpd, accounting for roughly one-third of global supply, while the Strait of Hormuz handles about 20% of global oil trade and approximately a quarter of seaborne shipments, according to International Energy Agency data.
Major exporters including Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, Bahrain and Iraq rely heavily on the route for oil and liquefied natural gas (LNG) exports.
- Record disruption in oil supply
The estimated disruption of around 15 million bpd is being described as one of the largest oil supply shocks in recent history.
Over the past two weeks, Gulf countries have lost an estimated $25 billion in oil revenues alone, excluding LNG and petrochemical income, with total losses expected to rise further.
The halt in crude and petroleum product flows through the Strait of Hormuz has intensified supply concerns, pushing oil prices above $100 per barrel in a short period.
In response, members of the International Energy Agency agreed to release 400 million barrels from emergency reserves to stabilize markets and ensure short-term supply.
Analysts say the move may help limit volatility but is unlikely to drive a significant price decline on its own.
- Daily losses approach $2.3B
Oguzhan Akyener, president of the TESPAM, said combined daily losses for Gulf countries are estimated at around $2.3 billion.
Akyener noted that Saudi Arabia is among the hardest hit, with losses nearing $1 billion per day. Oil revenues account for about 60% of the kingdom’s state income.
The United Arab Emirates is estimated to be losing about $350 million daily, while Qatar faces losses of roughly $300 million as LNG shipments slow significantly.
Kuwait is estimated to be losing around $200 million per day, while Oman is also experiencing notable declines due to its reliance on oil and gas revenues.
Bahrain is losing approximately $40 million daily.
Iraq is among the most severely affected, with oil production dropping from 4.2 million bpd to about 1.2 million bpd.
The country’s daily losses are estimated at around $300 million, as more than 90% of its exports depend on the Strait of Hormuz.
- Limited alternatives to bypass Hormuz
The Strait of Hormuz remains a critical chokepoint connecting the Persian Gulf to global markets, with limited alternatives for bypassing the route.
Some producers, including Saudi Arabia and the United Arab Emirates, are attempting to mitigate losses through pipeline routes.
Saudi Arabia is utilizing its East-West crude oil pipeline with a capacity of around 5 million bpd, while the UAE is relying on the Abu Dhabi crude pipeline via Fujairah.
Despite these measures, analysts warn that alternative routes remain limited and insufficient to offset the scale of disruption.
Prolonged constraints in the Strait of Hormuz are expected to sustain volatility in global energy markets.
By Gulsen Cagatay and Fuat Kabakci
Anadolu Agency
energy@aa.com.tr
