Gulf Nations Face $200 Billion in War Damages, Allianz Trade Reports
Translated & summarized from Arab48 by baba
Arab Gulf nations face over $200 billion in material war damages, with potential losses reaching $790 billion by 2030, according to an Allianz Trade report. The war, involving Iran and triggered by a U.S.-Israeli strike, damaged energy infrastructure and disrupted oil shipping, causing global price hikes. The report forecasts significant GDP contractions for Kuwait, Qatar, and Bahrain, while Saudi Arabia and the UAE will see lesser impacts. Gulf states are expected to redirect sovereign wealth funds to domestic resilience and security projects.
The story in 6 lines · by baba
- Arab Gulf nations have suffered over $200 billion in material war damages, with projected losses reaching $790 billion by 2030.
- The war, involving Iran, damaged energy infrastructure and disrupted oil shipping, causing a sharp global rise in oil prices.
- Kuwait, Qatar, and Bahrain are expected to face the largest GDP contractions in 2026 due to reliance on the Strait of Hormuz.
- Gulf states may redirect sovereign wealth funds to domestic projects focused on resilience and security, shifting priorities.
- Spending on infrastructure and defense is projected to reach $400 billion by 2030, creating investment opportunities.
- Oman is forecast to grow by 3.3% due to its independent trade routes bypassing the Strait of Hormuz.
A new report by financial risk assessor Allianz Trade estimates that Arab Gulf nations have suffered over $200 billion in material damages due to a recent war, with most of the impact concentrated on economies and energy infrastructure. The report projects that the region could face total losses of $790 billion by 2030. The war, triggered by an alleged U.S.-Israeli strike on Iran on February 28, saw Iran retaliate with attacks on Gulf infrastructure, including oil facilities, power plants, airports, ports, and military bases housing U.S. forces. These strikes led to the closure of the vital Strait of Hormuz shipping lane, causing a sharp global rise in oil prices.
Allianz Trade's "Deep Impacts of War on the Gulf" report details that over 80 energy facilities were damaged, primarily in Kuwait, Qatar, and Bahrain, with a third sustaining severe damage. The report forecasts a 4% contraction in the GCC's GDP for 2026, an 8.2% decline compared to pre-war projections. Other sectors like tourism and real estate have also been negatively affected, with residential property prices in Dubai falling 10.2% by September from their early-year peak.
The total cost of the war for GCC countries is projected to reach $790 billion by 2030, representing a cumulative economic output gap of 5.9% of GDP compared to pre-war growth forecasts. This figure reflects the projected cumulative loss in economic output between 2026 and 2030. To offset these losses, the report suggests Gulf nations may redirect sovereign wealth fund capital towards domestic projects, shifting government priorities from mega-projects to resilience and security initiatives.
Spending on infrastructure and defense by Gulf states is expected to reach approximately $400 billion by 2030, creating an estimated $160 billion investment opportunity for private and foreign investors. The war has significantly damaged the Gulf's image as a haven of security and stability, undermining investor confidence. Bahrain, Qatar, and Kuwait are expected to experience the largest GDP contractions in 2026, at -8%, -14%, and -11% respectively, due to their reliance on the Strait of Hormuz for energy exports. Saudi Arabia and the UAE are projected to see smaller, though still significant, contractions of -2.8% and -0.9% respectively, as they utilize alternative export routes like Saudi Arabia's East-West pipeline.
In contrast to other regional nations, Oman is predicted to experience 3.3% growth, benefiting from its ports and access to trade routes that bypass the Strait of Hormuz.