Allianz Trade puts Gulf’s Iran war damage at $200B

The US-Iran war has caused just over $200 billion in physical damage across the Gulf, credit insurer Allianz Trade said in a report released Wednesday, November 11. It added that lost economic output in the six Gulf Cooperation Council (GCC) states could reach $790 billion by 2030, according to AFP reporting carried by Malay Mail. The estimate puts a figure on what the Gulf has lost since the United States and Israel attacked Iran on February 28. Iran responded by restricting shipping through the Strait of Hormuz and striking airports, seaports, energy sites and American assets in US-allied Gulf countries.malaymail.com

Energy infrastructure bears the brunt

"Physical damage across the region is assessed just above $200bn, mostly concentrated in Hormuz-locked economies, especially in energy infrastructure," the report said, as quoted by CBS News. More than 80 energy facilities were hit, mostly in Kuwait, Qatar and Bahrain, and about a third of them were "severely damaged," ABS-CBN reported.abs-cbn.com+1

Allianz Trade's own summary projects that GCC GDP will shrink 4.0% in 2026, 8.2 percentage points below earlier forecasts. Kuwait, Qatar and Bahrain are expected to see the steepest declines. Saudi Arabia and the UAE are hit less hard because they have partial ways to bypass Hormuz, and Oman has gained as a gateway to global markets. The insurer said tourism flows fell 22% year on year in the first half of 2026. It also said Dubai real estate prices dropped 10.2% from their January peak by September.allianz-trade.com

A $790 billion output gap

"The total cost of the war for the GCC is set to reach $790bn, a cumulative gap of 5.9 percent of GDP relative to the pre-war trend through 2030," the report said, according to The New Arab. That figure is the gap between what the region was expected to produce before the war and what it is now forecast to produce.newarab.com

Allianz Trade said the shock is mainly fiscal. It projects cumulative budget deficits of $475 billion over 2026-30, to be covered mostly by $301 billion in new debt, $125 billion drawn from foreign-exchange reserves and $90 billion in sovereign wealth fund transfers, the report shows. Sovereign wealth funds are also expected to bring home about $120 billion for domestic investment, which the insurer said means less Gulf demand for global fixed income.allianz-trade.com

Spending shifts toward security

Gulf governments are moving away from mega-projects and toward resilience and security. Allianz Trade expects domestic infrastructure and defense commitments of $380 billion to $400 billion through 2030, creating "an opportunity of around $160 billion for private and foreign investors," Malay Mail reported.malaymail.com

Some producers have still benefited from higher crude prices. Saudi Aramco reported last week that its third-quarter net profit rose 34.6%, even though the IMF expects Saudi Arabia's economy to contract 3.3% this year, AFP reported.malaymail.com