The United Nations has estimated a massive loss to Arab economies in the wake of the US-Iran war. The war and Tehran’s retaliation cost Arab economies nearly $150 billion. And this loss has been estimated for the first month of the war.
The figure equals about 4 percent of the region’s combined gross domestic product, according to the UN Economic and Social Commission for Western Asia (ESCWA).
ESCWA Executive Secretary Rania Al-Mashat presented the estimate during a Security Council meeting convened by Bahrain on Thursday.
Conflict Disrupts Trade and Energy
Al-Mashat said threats to shipping through the Strait of Hormuz and Bab al-Mandeb extend beyond security concerns.
She warned that disruptions could affect economic development, essential supplies, business activity, financial stability and the wider global economy.
“From the Gulf through the Strait of Hormuz to the Red Sea via the Bab al-Mandeb Strait,” she said, the waterways form an interconnected trade system.
According to Al-Mashat, disruption at one point can affect the entire supply chain carrying energy, food and other goods worldwide.
She said the Strait of Hormuz handles roughly 25 percent of global seaborne oil trade and 19 percent of liquefied natural gas shipments.
War Threatens Regional Investment
Al-Mashat added that Gulf Cooperation Council countries supply significant shares of global ammonia, fertiliser, sulphur and aluminium markets.
She said nine of 22 Arab countries faced conflict or were emerging from conflict before the war began.
Those countries already faced damaged infrastructure, limited fiscal resources and heavy dependence on imported food and fuel.
Meanwhile, regional governments have pursued economic diversification to reduce dependence on traditional sectors.
However, Al-Mashat warned that the conflict could delay investment and further strain regional economies.
The United States and Israel launched attacks on Iran on February 28, while Tehran responded with strikes and actions affecting regional shipping routes.
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