Octrado: Gulf Economies Set for Significant Contraction as Hormuz Closure Enters Its Eighth Month
PROVIDENCE, Seychelles, Nov. 2, 2026 /PRNewswire/ -- The economies of the Gulf Cooperation Council (GCC) will shrink this year, and Asia, the destination for most of the region's oil and gas, is sharing the cost. The World Bank now expects GCC output to contract by an average of 4.3% in 2026, compared with growth of 4.4% it forecast in January and 1.3% in April, after the war with Iran began. Broker Octrado has issued a new Analysis of the Gulf economies with the latest macroeconomic data, and looks at what the slump means for Asian importers, markets and investors.
The GCC is a political and economic union of six Arab states on the Persian Gulf: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Since the war began at the end of February, shipping through the Strait of Hormuz has almost stopped and talks between Washington and Tehran on reopening the strait remain deadlocked. Before the war, about 20 million barrels of oil a day passed through the strait, around 80% of it bound for Asia. China and India alone took 44% of the crude. Almost 90% of the liquefied natural gas (LNG) shipped through Hormuz went to Asian buyers, covering about 27% of Asia's total LNG imports.
The damage is spread unevenly across the region. According to the World Bank, Qatar's economy will contract by 20.9% this year and Kuwait's by 14.6%, as both countries depend almost entirely on exports through the strait. Bahrain is expected to shrink by 2.9%, Saudi Arabia by 2.0% and the UAE by 1.6%. Oman, whose ports lie outside the strait, is the only member expected to grow, by 3.1%.
Qatar, one of the world's largest LNG exporters, has been hit hardest. QatarEnergy has again extended the suspension of deliveries due to unforeseeable circumstances (force majeure): buyers in Pakistan and Bangladesh have been told it will last through November. LNG prices in Asia are near their highest since late 2022, just ahead of the northern winter. Brent crude closed at USD 104.72 a barrel on 9 October.
Though there are signs of recovery, Octrado assesses that the risks remain firmly tilted to the downside. For Asian economies, the crisis is a reminder of how heavily they depend on a single shipping route. Even after the war ends, higher risk premiums for business in the Gulf are likely to persist, and importers in Asia can be expected to continue diversifying their energy supplies. The Gulf's reputation as a safe haven will take time to rebuild.
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Contact: Mohamad Riyadhi Ramlan, support@octrado.com
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