The writer is a professor of government at the London School of Economics.
The current war is damaging economies across the Gulf region. It has stopped exports of up to 15 per cent of global oil and petroleum products, 20 per cent of liquefied natural gas exports and a third of seaborne fertilisers. It has brought regional tourism and aviation sectors to a halt. For now, these effects are temporary. But what is the economic outlook for the region after the war?
The most likely result seems to be a weakened but defiant Iran. This would be a worst-case scenario for the Gulf monarchies, creating an enduring risk that Israel and the US will conduct future air strikes and that Iran — bereft of much of its longer-range arsenal — will once again retaliate against soft targets in the Gulf.