The GCC should insure itself against the next Strait of Hormuz crisis

The US-Israel war on Iran has disrupted GCC economies unevenly. Oman has experienced minimal impact because its ports and terminals continue operating normally. Saudi Arabia and the UAE have rerouted some oil exports through Yanbu and Fujairah to bypass the Strait of Hormuz. Kuwait, Bahrain, and Qatar have been largely cut off from global markets and face economic contraction. GCC states need unity and collective action to create mechanisms that reduce the effects of any future closure threats. Solidarity is framed as survival of GCC unity and its leverage globally. Even if an agreement ends fighting, the GCC will still suffer from a nearly three-month closure. States risk losing clients and market position, and only joint effort can prevent economic free fall. Unilateral responses driven by self-interest, such as the UAE leaving OPEC to gain market share, could worsen outcomes without burden-sharing mechanisms, leading to zero-sum competition and reduced bloc influence.

"The crisis caused by the US-Israel war on Iran has affected the member states of the Gulf Cooperation Council (GCC) at different levels. Oman has barely felt any shock as its ports and terminals continue operating as usual. Saudi Arabia and the United Arab Emirates have been able to reroute some oil exports through terminals in Yanbu and Fujairah, respectively, to bypass the Strait of Hormuz. Kuwait, Bahrain and Qatar, on the other hand, have been practically cut off from the global market and are facing the prospect of economic contraction."

"Under these circumstances, the GCC states more than ever need to demonstrate unity and address the crisis through collective action. The issue of solidarity is not about showing benevolence to neighbours. It is about setting up mechanisms now that can diminish the consequences and value of any future threat of closure. It is about the survival of the whole idea of GCC unity and the leverage it has on the global scene."

"Even if some sort of agreement is reached between the warring sides today, the GCC will continue to suffer under the shadow of the nearly three-month closure. States face the risk of losing clients due to the risk of not fulfilling their obligations or being perceived as a risky supplier. Only a joint effort can stop a free fall. So far, self-interested approaches are winning over collective action."

"With no burden-sharing mechanism, Gulf countries would end up competing against each other in a zero-sum game. This would reduce the influence the GCC has as a regional bloc and diminish its ability to sway energy markets. Up until now, there have"

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