Dr. Nasser Saidi’s oped appeared in a CNN Business Arabic article titled “الحرب.. عاصفة عاتية تلوح في الأفق” on 3rd April 2026. Both Arabic and English versions are posted below.

الحرب.. عاصفة عاتية تلوح في الأفق

War: a perfect storm is brewing. 

The ongoing war in the region is multifaceted, with economic, security, financial, fiscal, environmental and socio-economic consequences. The effects will depend on the duration (weeks, months, years), intensity, depth and breadth (activities, countries, regional and global) of the shocks, and the extent to which core infrastructure is impacted. The unprecedented shocks and their consequences are still unfolding, with growing uncertainty as to outcomes. Already, the past year since the onset of global trade wars in April 2025, has been one of a spike and unprecedentedly high levels of economic and trade policy uncertainty, which are now being galvanised by heightened geopolitical confrontations and uncertainty.

The year 2026 has stressed global energy security given the disruption of traffic in the Strait of Hormuz: trade flows through Hormuz represent some 40% of global crude, 30% of LPG and 20% of LNG exports. The IEA is calling this “the largest supply disruption in the history of the global oil market”. Beyond oil, supplies of critical inputs from aluminium to helium, sulphur and fertilisers (urea, ammonia, phosphates) are being disrupted leading to price hikes and spilling over into the agricultural and food markets, vehicles, semi-conductor and AI industries.

The destruction, disruptions and uncertainty are impacting both the private and public sectors. For the private sector, the current and near term is one of adapting to disruption (including through WFH) and destruction of basic infrastructure (transport, power, water). The next step is reviewing production location and facilities and supply chains to reduce exposure and risk.

Governments are pro-actively rolling out measures to counter the effects of war through macroeconomic and other policies for security, financial and socio-economic stability.  Governments, Ministries of Finance and central banks are rolling out measures and pursuing policies to maintain and support economic, banking and financial market stability, while SOEs and GREs adopt and develop new industrial policies. Transport and logistics are being facilitated via alternative routes given the near-closure of the Strait of Hormuz (Saudi’s Yanbu port, a Saudi-Jordan railway freight corridor, new shipping lines, expanded land transport connections etc). The CBUAE set out a five-pillar banking and financial resilience framework. Dubai government has announced a UAE Dirham 1 billion support package for the private sector. This proactive resilience package signals that the UAE is not waiting for the crisis to deepen, opting to act proactively and mitigate emerging risks and stabilise the growth outlook.

For the GCC countries the shocks are unprecedented. The preponderance of shocks is supply shocks, unlike the demand shocks that typically affected energy markets. Activities, trade and finance of both the oil and non-oil sectors have been impacted with a broad potential negative impact, including fiscal (lower oil and non-oil revenue, increased security, defence and compensatory government spending), on debt and equity markets, trade and balance of payments, and capital flows as portfolios are adjusted to changed return/risk expectations and outcomes. There are also an existential danger and potential environmental ecocide, if desalination and nuclear power plants and facilities are hit and result in nuclear fallout.

There is also variance in the extent of vulnerability across the Gulf countries to the various shocks from the most vulnerable (Iraq, Bahrain, Kuwait) to the less vulnerable (KSA, UAE and Oman) depending on the level of dependence on O&G for activity, trade and government revenue, as well as geographical, with the UAE,  KSA and Oman having access to the Red Sea and Indian Ocean for their trade.

For energy and food importers of the region (notably Egypt, Jordan, Lebanon, Morocco, Syria and others), the war impact includes exchange rate depreciation, higher inflation, capital outflows, reduced remittance and capital inflows, all leading to lower GDP and potential credit and balance of payments crises. All these countries will require external intervention and access to liquidity and financial facilities from the IMF, WB and AMF.

For Lebanon, already in the throes of a polycrisis, there is widespread destruction and repeated massive displacement of population adding to misery, poverty and macroeconomic pressures, including adding to the cost of reconstruction.

We are entering a period of review and reconfiguration of strategies. Over the past decades the GCC emerged as global hubs for both fossil fuel energy (O&G), and renewable energy, along with fertilisers and petrochemicals, aluminium, transport & logistics through their ports and airports and international financial hubs through their financial centres and the size and reach of their SWFs. The ongoing multifaceted war will lead to a review of diversification strategies and policies, as happened as a result of the Covid pandemic.  Regional and global supply chains will be reconfigured depending on the outcomes of the ongoing war.

Destruction of infrastructure is ongoing and growing-including energy, power, water & desalination, digital/telecom/AI, transport & logistics- which will be costly to repair and reconstruct and affect the cost and speed of recovery from war. Initial estimates of energy infrastructure damages are running at $25 billion. Post-war reconstruction costs will be massive, involving new energy, water and transport infrastructure, new pipelines, and new defence systems. However, the GCC have massive reserves and access to financial resources that can be mobilised and dynamic ability to respond.