Voices from the Arab press: Gulf tensions over Iran deepen regional fears

The six Gulf Cooperation Council (GCC) economies demonstrated robust performance in 2025, with real growth remaining positive. This economic strength was primarily fueled by vigorous non-oil sector activity, notably in Saudi Arabia and the UAE. Employment figures improved, unemployment declined in emerging sectors, and the region attracted record foreign direct investment, attributed to regulatory reforms and significant development projects.

Diversification efforts were particularly evident in manufacturing, transportation, logistics, and tourism. Initial projections for 2026 were optimistic, with the IMF expecting GCC growth between 3.2% and 4.5%. However, the economic outlook drastically shifted with the outbreak of war on February 28, 2026.

The conflict triggered a severe supply shock, significantly disrupting the Strait of Hormuz, a critical chokepoint for approximately 20% of global oil supplies. This, coupled with broader supply-chain instability, had immediate repercussions. While geopolitical risks initially drove up oil prices, exports and production in some Gulf states saw a decline. Simultaneously, shipping and insurance costs surged.

Consequently, several countries are now facing anticipated economic contractions, especially in sectors highly sensitive to geopolitical and economic fluctuations, such as tourism, real estate, and construction. The author reflects on past anxieties, comparing the current situation to the 1990 invasion of Kuwait, and expresses a lingering hope for integrated Gulf cooperation despite these persistent challenges.