The war in the Middle East could cost Gulf Cooperation Council countries about $790 billion through 2030, insurer Allianz Trade said in a report released on Wednesday.
The company assessed physical damage across the region at just above $200 billion, concentrated in economies hit by the closure of the Strait of Hormuz, especially energy infrastructure. The total cost is a cumulative gap equal to 5.9 percent of GDP against the pre-war trend.
More than 80 energy facilities were hit, mostly in Kuwait, Qatar and Bahrain, and a third of them were severely damaged. Tourism and real estate are also expected to grow more slowly for years.
The war began on February 28, when the United States and Israel attacked Iran. Iran then restricted shipping through the Strait of Hormuz and struck civilian infrastructure, including airports, seaports and landmarks, as well as American assets in US-allied countries.
Allianz Trade said Gulf governments have shifted their priorities from mega-projects toward resilience. It expects sovereign wealth funds to move about $120 billion into domestic projects through 2030, which would halve the region's external surplus. Spending on domestic infrastructure and defense is projected at $380 billion to $400 billion over the same period, creating an estimated $160 billion opportunity for private and foreign investors.
Saudi Arabia's state oil company Aramco reported a 34.6 percent rise in third-quarter net profit last week, despite shipping restrictions in the Strait of Hormuz and the Bab al-Mandab. The International Monetary Fund expects the Saudi economy to contract 3.3 percent this year, five percentage points below its July forecast.
