The Strait of Hormuz crisis is no longer only an oil-price story. Economists are now marking down Gulf growth as disruption spreads through exports, logistics, confidence and public finances.
Most Gulf economies face weaker growth this year as disruption around the Strait of Hormuz affects oil and gas exports, shipping, trade and investor confidence, according to a Reuters poll of economists.
The Reuters survey found that economists have cut forecasts after abandoning assumptions that shipping and energy exports would quickly normalise. The disruption has kept a central regional chokepoint under pressure and pushed the issue beyond daily oil-price movements.
Hormuz is critical because it links Gulf producers to global energy markets. Oil, condensate and liquefied natural gas flows through or near the strait support government revenue, trade balances, port activity and the wider logistics model of the region. When traffic becomes uncertain, the effect is not limited to crude prices.
The first channel is export revenue. Higher prices can offset some lost volume, but prolonged disruption creates planning uncertainty for producers, buyers and fiscal authorities. Gulf budgets rely heavily on hydrocarbon income even where diversification programmes have advanced. Delayed cargoes, rerouted shipments or constrained output quickly become macroeconomic variables.
The second channel is logistics. Ports, aviation hubs, warehousing companies and shipping services depend on confidence that the Gulf remains a reliable transit and trading zone. If war-risk premiums rise, insurance becomes more expensive and vessels are delayed, non-oil sectors also feel the pressure.
EU Global has previously examined how the US-Iran framework left Europe exposed to unresolved Hormuz risks and how the US-Iran memorandum created only a temporary test for maritime stability. The latest economic forecasts show that those risks are now being translated into growth assumptions.
The third channel is investment. Gulf governments have built diversification strategies around large infrastructure projects, tourism, technology, finance and aviation. These plans depend on predictable capital flows and the perception of regional stability. A prolonged Hormuz crisis makes investors more cautious, even when projects are outside the immediate conflict zone.
The effect will not be uniform. Economies with larger sovereign buffers and stronger non-oil sectors can absorb disruption better than those more directly dependent on hydrocarbon exports or shipping activity. LNG exporters face particular exposure because gas contracts, shipping routes and customer confidence are tightly connected.
Europe has a direct interest in the outcome. Gulf states are energy suppliers, investors, logistics partners and aviation hubs for European companies and passengers. A regional downturn can therefore affect European trade, energy prices and capital flows, even if the initial disruption is geographically distant.
The policy implication is that Hormuz should not be treated only as a security flashpoint. It is also a macroeconomic transmission channel. Disruption in the strait moves through budgets, shipping contracts, insurance, investor sentiment and import prices.
If the crisis eases, Gulf economies could rebound in 2027. If it persists, the region’s diversification plans will face a harder test: whether economies designed to move beyond oil can withstand a shock that begins with oil but spreads far beyond it.
