For decades, the Strait of Hormuz has been the Gulf’s most dangerous economic variable, with the significance of its narrow waters extending far beyond the vast volumes of oil, gas, and consumer goods passing through.
This risk has never been abstract, and sits at the heart of every security brief, energy policy and long-term investment strategy in the GCC states. But with the closure of the Strait during the Iran war, that risk has migrated from the conference room to the balance sheet.
The divide between the GCC countries has become impossible to ignore
The closure has not affected every economy equally, acting instead as a brutal stress test that separates those who have prepared for a post-Hormuz era from those still tethered to traditional maritime dependence.
GCC winners and losers
The clearest place to start is energy – the Gulf’s biggest revenue engine and the sector most directly exposed. Here, the divide between the six countries of the GCC has become impossible to ignore. The UAE and Saudi Arabia entered this crisis with an advantage because both have invested for years in routes that can bypass Hormuz, with the UAE recently stating its aim of ‘zero dependency’ on the Strait.
The UAE’s existing Habshan-Fujairah pipeline already allows Abu Dhabi to move crude directly to the Gulf of Oman. Before the war, it looked like a strategic hedge; today, it looks like national economic insurance. Likewise Saudi Arabia has its own insurance through the East-West pipeline to Yanbu, which moves a meaningful share of crude exports to the Red Sea.
With ports sitting outside Hormuz, Oman also has suddenly become far more important to the wider Gulf economy.
However, Qatar’s vulnerability has been particularly severe because its LNG model depends heavily on its port at Ras Laffan and maritime access through Hormuz. Iran’s strikes on Ras Laffan are a structural warning about the risks of building a national export model around a single energy hub and a single maritime exit.
Gulf resilience still begins with physical infrastructure
Meanwhile both Kuwait and Bahrain lack an alternative pipeline infrastructure, so Hormuz’s closure threatens their core revenue stream.
This is the first major lesson of the Hormuz shock: Gulf resilience still begins with physical infrastructure. Diversification may be discussed through technology, tourism and finance, but in a geopolitical crisis, pipelines, ports, storage terminals and overland corridors become the foundations of economic survival.
Trade deals
The second line of defence is trade policy, which is where the recently finalised GCC-UK free trade agreement becomes more than a commercial milestone.
The closure of Hormuz triggered a supply chain emergency across a region that depends heavily on imported food and consumer goods, forcing companies to pivot to alternative logistics. In practice, this means using safer ports such as Fujairah or Duqm, or rerouting through Oman.
GCC states have also had to rely on commodity swaps and contractual substitutions to fulfil obligations. Customs windows extensions have prevented delays automatically becoming commercial defaults.
Gulf economies have been trying to physically redraw trade routes
This reflects a broader shift already underway before the crisis. Gulf economies have not only been signing trade deals, they have also been trying to physically redraw trade routes. The India-Middle East-Europe Economic Corridor (IMEC) is one example.
This is where the UAE’s strategy of comprehensive economic partnership agreements becomes part of the resilience story, building a wider map of partners, suppliers and markets. With around 30 agreements concluded or in progress, including recent deals with Vietnam, Nigeria, the Philippines, Australia and Chile, the UAE is giving businesses more flexibility over where they source, manufacture and sell.
Financial response
The third line of defence is financial. When shipping is delayed, cash gets trapped, making credit lines, hedging and export insurance key weapons in the response arsenal.
Regional banks are extending short-term working capital facilities to help companies bridge the gap between shipment and payment. Hedging tools are being used more aggressively to manage swings in freight, fuel, commodity and currency costs.
State-backed export insurance has prevented a corporate liquidity crisis
State-backed export insurance has also been critical. By absorbing part of the risk, institutions such as Etihad Credit Insurance help prevent a logistics shock from becoming a corporate liquidity crisis.
Government support
Government support across the GCC has taken several forms: direct relief for companies, sovereign backing for strategic national champions, and practical logistics measures to keep trade moving.
In a region where energy, aviation, utilities, logistics and food supply chains are closely tied to state-linked companies, government support is not simply about stimulus, it is about protecting the operating backbone of the economy.
The UAE has moved most visibly on business relief, with liquidity support, temporary fee deferrals and customs flexibility easing pressure on companies facing higher import costs and delayed shipments.
The Covid pandemic taught Gulf governments how to move quickly
Other Gulf governments have had to focus heavily on protecting strategic national companies, such as airlines, from liquidity stress, credit pressure and soaring war-risk costs.
The Covid pandemic taught Gulf governments how to move quickly, and that institutional muscle memory is now being applied to a very different shock.
Rescued by resilience
The closure of Hormuz is a severe stress test. While it will inevitably raise costs and expose structural weaknesses, it also proves that the Gulf’s resilience model has evolved beyond simple oil-revenue dependency. The region is now operating on a foundation of pipelines, diversified trade corridors, credit instruments and rapid-response governance.
The real question is whether these emergency measures will solidify into permanent business architecture. For Gulf companies, the lesson is clear. Resilience is no longer a slogan, but a balance sheet strategy, a logistics strategy and a trade strategy.
