Even a limited exchange could have outsized consequences. The Strait of Hormuz — through which roughly one-fifth of global oil shipments pass — remains a critical chokepoint. Any threat to its security would immediately rattle global markets.
Insurance premiums for shipping would surge. Oil prices could spike. Inflationary pressures could ripple across the global economy.
For Gulf states working to diversify their economies beyond oil, the timing could not be worse. Many are actively courting foreign investors, building tourism industries, and positioning themselves as hubs for finance and technology. War would send a chilling signal to capital markets and skilled expatriates alike.
The Economic Domino Effect
The Gulf’s concern is not limited to bombs and missiles. Economic fallout could prove just as destabilizing.
If hostilities disrupt shipping or oil production, energy markets would react sharply. Rising fuel costs would feed inflation globally — including in the United States. Such a scenario could undermine domestic political stability far beyond the Middle East.
