The economic consequences of the US-Iran war could cost Gulf Cooperation Council (GCC) countries approximately $790 billion by 2030, according to a report released by global insurer Allianz Trade on November 11, 2026. The assessment estimates that direct physical damage and immediate economic losses from the conflict could exceed $200 billion, while the cumulative impact on regional economic output is expected to reach nearly four times that amount over the next several years. The report highlights the extensive financial consequences of damage to energy infrastructure, disruptions to international shipping and weaker business activity across several industries. It also warns that the conflict could alter government spending priorities, investment strategies and economic development plans throughout the Gulf region.
According to Allianz Trade, Gulf countries experienced significant economic disruption following the military attacks launched by the United States and Israel against Iran on February 28, which triggered the conflict. Iran subsequently restricted shipping through the strategically important Strait of Hormuz and carried out strikes against civilian infrastructure, including airports, seaports, energy facilities, landmarks and American assets in countries allied with Washington. The insurer estimated that physical damage across the region had exceeded $200 billion, with the largest concentration in economies affected by restrictions around the Strait of Hormuz. Energy infrastructure accounted for a substantial portion of the reported destruction, creating additional challenges for countries dependent on oil and gas production, processing and exports.
More than 80 energy facilities were reportedly hit during the conflict, with most of the affected installations located in Kuwait, Qatar and Bahrain. Approximately one-third of these facilities were described as severely damaged, highlighting the scale of disruption to the region’s energy infrastructure. The consequences extend beyond the immediate cost of repairing damaged installations, as interruptions to energy operations can affect production capacity, export revenues, industrial activity and international supply chains. The disruption to shipping through the Strait of Hormuz has also increased uncertainty for businesses and investors operating across the Gulf, particularly those dependent on reliable maritime transportation for energy exports and imported goods.
The report estimates that the total economic cost of the war for GCC countries will reach $790 billion through 2030, representing a cumulative economic output gap equivalent to 5.9% of regional gross domestic product compared with the pre-war growth trajectory. This estimate reflects the difference between the economic output that Gulf economies were previously expected to generate during 2026-2030 and the lower level of production now projected following the conflict. Allianz Trade noted that sectors such as tourism and real estate have also been affected, with both industries expected to experience slower growth over the coming years. Reduced investor confidence, infrastructure damage and uncertainty surrounding regional security could further influence business expansion and economic activity beyond the energy sector.
To address the financial impact, Gulf governments are expected to reconsider the allocation of capital held by their sovereign wealth funds, directing a larger portion towards domestic investment projects. Allianz Trade expects the region’s external surplus to be cut by half, partly offset by increased repatriation of sovereign wealth fund assets. The report estimates that approximately $120 billion in additional domestic investment could be generated through 2030, although this shift would come at the expense of international investment activities. Government priorities are also expected to move away from some large-scale development projects towards infrastructure resilience, economic security and strategic domestic capabilities. This adjustment could reshape investment patterns and influence the availability of Gulf capital for projects in international markets.
Despite the economic uncertainty, the report identifies potential investment opportunities arising from higher domestic infrastructure and defence spending. Gulf countries are expected to increase spending in these areas to approximately $380 billion to $400 billion through 2030. Allianz Trade estimates that this spending could create opportunities worth around $160 billion for private-sector and foreign investors seeking to participate in regional development projects. Meanwhile, Saudi Aramco reported a 34.6% increase in third-quarter net profit, supported by higher oil prices as restrictions in the Strait of Hormuz affected global energy markets. However, the International Monetary Fund expects Saudi Arabia’s economy to contract by 3.3% this year, representing a five-percentage-point deterioration compared with its July forecast. These developments illustrate the contrasting effects of higher energy revenues and broader economic disruption facing Gulf economies as they navigate the financial consequences of the conflict.
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