Allianz Trade: Iran War to Cost Gulf $790 Billion in Output Through 2030

Key Facts

Allianz Trade estimated that Gulf Cooperation Council countries will lose about $790 billion in future output over 2026–2030, with a reconstruction bill of $200 billion, in a report published by the company on November 9, 2026. The estimate of lost output represents a cumulative economic cost beyond repairing damaged assets, and the report places it alongside rebuilding needs over the same period. The company said GCC gross domestic product is set to contract 4% in 2026. That would mark an 8.2 percentage-point reduction from its previous growth forecast for that year. The figures put the expected scale of the war’s impact on Gulf economic activity at the forefront of the company’s estimates.

There is a gap between the cost of physical damage and the broader output loss: Allianz Trade estimated reconstruction costs at about $200 billion, compared with $790 billion in lost output over 2026–2030. The company said the damage is concentrated particularly in Gulf economies constrained by the Strait of Hormuz, especially energy infrastructure. In details reported in press coverage of the report, more than 80 energy facilities were hit during the war. Most were in Kuwait, Qatar and Bahrain, while a third of the damaged facilities sustained severe damage. These figures show that direct damage is concentrated in energy facilities and economies most exposed to disruptions in traffic through the strait.

Contraction forecasts vary across the region according to how closely economies are tied to the Strait of Hormuz. Allianz Trade said Kuwait, Qatar and Bahrain, the economies most exposed to the strait, will see the steepest contractions. By contrast, the company said Oman would benefit from its position as a corridor to global markets and the region. By sector, it forecast the Gulf hydrocarbon economy would contract 8.5% year on year in 2026, while trade would fall 5.5% on the same basis. The estimates reflect pressure spreading from energy to trade, with the scale of the impact varying across Gulf economies.

Allianz Trade expected the shock to also affect domestic activity and tourism. The company described pressure on domestic activity as the most severe since the COVID-19 pandemic. It also said tourism flows fell 22% year on year in the first half of 2026. In a broader backdrop to the forecasts, the World Bank cut its forecast in April for GCC growth in 2026 to 1.3%, compared with growth of 4.4% in 2025. The World Bank’s revision was down 3.1 percentage points from its January forecast. This trajectory provides context for the downgrading of regional growth expectations over the year, while Allianz Trade’s estimates point to a contraction in Gulf output in 2026.

For the fiscal response, Allianz Trade identified a mix of borrowing, reserve use and transfers from sovereign wealth funds to cover the gap over 2026–2030. The company estimated $301 billion in new debt issuance, in addition to refinancing maturing debt, and a $125 billion drawdown of foreign-exchange reserves. It also included $90 billion in transfers from sovereign wealth funds among funding sources, describing them as a last resort. At the same time, it expected $120 billion of those funds’ capital to be redirected to domestic investment through 2030, at the expense of international investment. The figures put reconstruction financing and domestic investment among options that would require Gulf financial resources to be redirected.

The managing director of the International Monetary Fund said on October 1 that GCC countries had redirected vital supplies away from the Strait of Hormuz, helping contain the supply shock and maintain energy flows to global markets. To reduce the impact of any future closure of the strait, the Fund said completing the GCC railway and the Saudi Landbridge would materially reduce economic losses. These steps come against the backdrop of Allianz Trade’s assessment of differences among Gulf economies according to their exposure to the strait. Allianz Trade shares, traded under the ticker ALIZY, also closed at $51.94 on November 10, 2026. That closing price does not establish that the company’s estimate drove the stock.