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More than a month into the Iran war, Gulf economies are confronting a more complex strain. What began as an initial energy shock has rippled through trade, logistics and industrial supply chains, raising questions about how long the region can sustain during these disruptions.
At the heart of the crisis is the Strait of Hormuz – a narrow but critical waterway that handles not only a large share of global oil shipments but also much of the Gulf’s imported food, consumer goods and industrial inputs. Since the outbreak of hostilities in February, Iran has responded to US and Israeli attacks with a near-total blockade of the strait, allowing only its own shipments and a handful of "friendly" vessels to pass.
This has sent oil prices soaring, stoked inflation fears and tested the region’s preparedness.
While The Wall Street Journal reported on Monday that US President Donald Trump was willing to end the military campaign against Iran, boosting hopes for de-escalation, the status of the strait remains uncertain. He later said he might stop the war but leave the strait for other countries to deal with.
The disruption has particularly affected the Gulf but has also prompted a collaborative approach among countries in the region.
“There’s been a lot of collaboration across the board, with regular meetings,” Maria Al Qassim, assistant undersecretary for policies and economic studies at the UAE Ministry of Economy and Tourism, told The National. “We’ve been prioritising each other just as we would prioritise the people living within our borders.”
Food security tested
The crisis has brought food security into focus. Gulf states rely on imports for about 90 per cent of their food due to arid climates, and the current disruption marks their most significant test since the 2008 global financial crisis.
In the aftermath of that crisis, Gulf countries moved from a passive import model to a more strategic approach – investing in overseas farmland, notably in Sudan and Ethiopia, building grain reserves, diversifying suppliers and expanding domestic production through technology such as hydroponics.
Countries such as Saudi Arabia and the UAE also used their sovereign wealth funds to secure global supply chains while integrating food security into broader national security planning.
Nearly five weeks into the current conflict, supermarket shelves across the Gulf remain largely stocked.
“Gulf governments have made some investments in strategic grain storage and port diversification,” said Karim Elgendy, executive director at the Carboun Institute think tank.
“The UAE, for example, built grain silos in Fujairah back in 2016 outside the Strait of Hormuz. Qatar built climate-controlled silos at Hamad Port. Saudi Arabia, which is not affected in the same way, has been purchasing wheat on international markets.
“The reason shelves in Dubai or Riyadh still look normal isn’t because disruption isn’t happening, but because these countries have several months’ worth of reserves for staple goods and are drawing on those reserves now.”
Gulf states also rely on robust logistics and years of planning, strengthened since the Covid-19 pandemic.
Still, some residents have reported modest price increases and occasional shortages.
“Yesterday, I went to get my usual avocado cocktail, but the shop owner said they didn’t have any due to shipping issues,” said Doha resident Carla, who asked that her last name be withheld. She added that price increases have been “nothing drastic”.
Kuwait resident Jessy said goods remained widely available but prices have edged slightly higher.
The impact extends beyond the region. Maximo Torero, chief economist at the UN Food and Agriculture Organisation, said last week the intensifying conflict “has triggered one of the most rapid and severe disruptions to global commodity flows in recent times”.
Measures to contain prices
Governments across the Gulf have moved quickly to limit price volatility and prevent panic buying.
Kuwait has introduced price controls and export restrictions to stabilise supply. Bahrain has formed teams of inspectors to monitor retail pricing, shutting down at least one shop for unjustified increases.
In the UAE, authorities are focusing on pre-emptive intervention.
“There were multiple ministerial decisions issued to make sure that we address the root causes of any increased prices that could in effect translate to the consumer and address it head-on before it even reaches the consumer,” said Ms Al Qassim.
She added that the ministry will soon launch a platform publishing daily prices for millions of goods across retail outlets, enabling consumers to compare costs in real time.
Alternative supply routes
Gulf states are stepping up efforts to reroute imports and activate alternative logistics networks. Most maintain strategic reserves sufficient to cover four to six months of consumption, depending on the commodity.
The UAE is using ports along its east coast outside the strait, and its aviation network for high-value and perishable goods.
“We always anticipated the likelihood of disruptions to our logistical routes, to our shipping lines,” said Ms Al Qassim.
“We have alternative routes, as well as alternative sources to the vast majority of our essential commodities in general, and more specifically, to our essential food commodities that we import. We've already seen the activation of other ports on the east coast.”
She added that the UAE’s role as a global re-export centre had reinforced regional supply resilience.
“And then, we have a very solid, very reliable aviation network. So this has also served us very well, specifically with items that are perishable, items that are of strategic importance, such as pharmaceuticals, and then we have the land transport,” said Ms Al Qassim.
Similarly, Qatar Airways previously announced the transport of essential goods – including medicine, fresh food and medical equipment – into Qatar.
Last week, Kuwaiti low-cost carrier Jazeera Airways established a supply chain corridor into Kuwait through Qaisumah Airport in Saudi Arabia, transporting its first shipment of 4.5 tonnes of fresh fruit and vegetables from India in a multi-modal operation.
Mr Elgendy cautioned that while reserves can cushion short-term shocks, fresh produce cannot be stockpiled and alternative routes are limited.
“Saudi Red Sea ports are the best option right now but overland trucking would need to be expanded,” he said. “If the strait reopens within weeks, it’s manageable. Beyond three months, the reserves start running thin.”
