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🇮🇱 Israel /Economy & Trade

Gulf nations fly in essentials as Hormuz closure drives up living costs

From Jerusalem Post · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

Analysis Sources not specified Context piece
  • Gulf nations are increasingly flying in basic necessities like food and household goods due to the prolonged closure of the Strait of Hormuz, leading to higher costs for residents.
  • The closure, which began in March, has disrupted traditional sea-based supply chains, forcing countries like Kuwait, UAE, Bahrain, Qatar, and Saudi Arabia to rely on air freight.
  • While media focus has been on oil prices, the impact on essential goods and the resulting inflation within these Gulf states has been largely overlooked.

Gulf states are resorting to costly air freight for essential goods like food and household items as the Strait of Hormuz remains effectively closed to commercial shipping. This shift, driven by the waterway's closure since March, is directly contributing to rising inflation within these nations.

Hormuz is the dominant economic channel in our estimates for the wider world economy, mainly Asian importers and Europe.

— Mohamed ShadiHead of energy and logistics at the Al Habtoor Research Center in Dubai, on the Strait of Hormuz's global economic importance.

Normally reliant on maritime transport, countries including Kuwait, the UAE, Bahrain, Qatar, and Saudi Arabia are now flying in necessities whenever possible. Shon Hiatt, a professor at the University of Southern California, explained that this aerial resupply is causing prices to increase for residents.

A lot of the necessities, and I'm talking food, that these Gulf nations require - Kuwait, the UAE, Bahrain, Qatar, Saudi Arabia - comes in by boat.

— Shon HiattAssociate professor at USC, describing traditional supply routes for Gulf nations.

While the disruption to oil and gas transport through the Strait of Hormuz has garnered significant media attention, Hiatt points out that this focus has largely missed the impact on basic goods. "We've ... put a lot of the focusing ... on the oil because it's affecting us," he said, noting the "very little actual reporting on the impact of both household goods and food for these countries."

So, what have they been doing? They've been flying in, whenever they can, their food products and their household goods. And that's caused inflation in these states.

— Shon HiattProfessor Hiatt explaining the shift to air freight and its inflationary impact.

Shipping companies responded early to the crisis, with Maersk implementing an emergency surcharge on cargo to and from several Gulf nations. However, air freight is only a viable option for small, high-value, or urgent cargo like medicine and electronics, and cannot substitute the volume of grain or building materials typically moved by sea. The Abu Dhabi National Oil Company has also reported its ships being targeted by missiles and drones.

We've ... put a lot of the focusing ... on the oil because it's affecting us. But there has been very little actual reporting on the impact of both household goods and food for these countries.

— Shon HiattProfessor Hiatt criticizing the media's focus on oil over the impact on essential goods.
DistantNews Editorial

Originally published by Jerusalem Post in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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