In what began as the U.S. Israeli attack on Iran on February 28th, 2026, the conflict has been intensifying and pulling various countries into its fold. The implications of this ongoing war are wide-ranging, with ramifications for the entire global economy and especially states located in the immediate neighborhood. For several decades, the Gulf Cooperation Council (GCC) countries have been investing in diversifying their economies and transforming into global hubs as conducive centers for global investments. The widely popular perception of being safe havens has been significantly shattered by this conflict. Therefore, the cost of this war has been enormous, not only for the GCC, but for the global economy at large. Much of the global transit trade, as well as oil and gas supplies, that pass through the region have been largely disrupted. The most significant repercussion of this war is the closure of the narrow Strait of Hormuz, one of the most vital transportation passages, handling about 20 million barrels per day (bpd) of oil, roughly 20 percent of the world’s seaborne oil trade. Export volumes have plunged to less than 10 percent of pre-conflict levels.[1]
The U.S. Israeli attacks targeting Iranian leadership, nuclear facilities, military sites and civilian infrastructure including the killings of its leaders, has elicited a strong Iranian retaliatory response, which includes missile and drone attacks on GCC states. The target has been U.S. military assets, facilities and other concerns in multiple GCC states, especially those that host U.S. military bases.[2]
