World Bank Says Middle East Economy to Contract 2.1 Percent in 2026 Due to Iran War

Analysis
Commercial transit through the Strait of Hormuz is unlikely to resume gradually, through a public reopening or sustained normal-scale transits, before December 31, 2026. The World Bank baseline assumes reopening begins that day, so Gulf output, fiscal and 2027 rebound projections would shift if closure outlasts the year. Tanker traffic averaged three vessels over seven days in late September, with no easing since. Qatar, Kuwait and Iraq carry the greatest exposure because export volumes, not prices, drive their losses. Confidence is low: the sources offer no direct indicator of Iranian or US negotiating positions, and the reporting is internally inconsistent. The National is the sole primary source, while Zawya and Business Recorder amplify it with differing figures. Business Recorder's ceasefire reference may reflect an earlier report cycle, or diplomacy could reopen the strait sooner. Gulf sovereign lenders and energy importers should budget for deeper 2026 losses and longer inventory drawdowns unless transit resumes.