Gulf nations hoped to move beyond oil. The Iran war made that much harder.

"The official narrative in these countries is that this economic crisis will be like covid, and climbing out of it will be quick. But there are structural breaks that cannot be easily undone. Both the oil and non-oil sectors are getting hit equally hard and are facing damage that is potentially long term."

"The same structural security weaknesses and challenging geography that have darkened the outlook for the region's fossil fuel economy now threaten its emerging sectors. The prospect that Iran can shut down the Strait of Hormuz on a whim could shake the confidence of foreign investors and unravel the reputation of wealthy Gulf states as safe harbors for business."

"Economies in Asia are already enduring serious fuel shortages, factory shutdowns and soaring prices for fertilizer as a result of the shutdown of the strait. It is pushing leaders there to rethink their reliance on Gulf states for trade, driving up costs globally, and raising questions about whether Western firms will be able to tap oil-rich monarchies for investment the way that they have in the past."

"Financial companies are questioning the wisdom of expanding operations in a place where their office space could become a drone strike target. Tourists are canceling trips, with the World Travel and Tourism Council estimating that the war cost the region $600 million a day in lost revenue during the first weeks of t"

War in Iran is stressing the long-term economic prospects of wealthy Gulf monarchies that rely on global finance, tourism, and technology growth. Even with a potential deal to reopen the Strait of Hormuz, economists warn the conflict will cause lasting damage through structural breaks affecting both oil and non-oil sectors. The ability of Iran to disrupt the strait undermines confidence among foreign investors and challenges the region’s image as a safe business destination. Fuel shortages, factory shutdowns, and fertilizer price spikes in Asia are already increasing trade costs and reshaping supply relationships. Financial firms face security risks, while tourism declines, with large daily revenue losses reported early in the conflict.

Read at The Washington Post