A top United Nations official reported that a single month of the US-Israeli war with Iran has cost Arab nations in the Gulf and Middle East an estimated $186 billion in gross domestic product losses, as maritime tensions escalate around the strategic Strait of Hormuz.
Economic Toll and Regional Fragility
The financial cost of the conflict is rippling across the Middle East. Speaking in Amman, Jordan, UN Assistant Secretary General Abdallah Al Dardari stated that the ongoing hostilities have triggered severe economic contraction throughout the region since the conflict began on February 28. Dardari warned that every day of delay carries negative repercussions for the global economy, stating, We hope the fighting will stop tomorrow, as every day of delay has negative repercussions on the global economy.
We estimate that the loss to the Arab region's GDP as a result of one month of fighting will be around six percent,
Dardari continued, adding, Six percent of GDP means the region has lost around $186 billion from its economy in a single month.
The economic damage is unevenly distributed but deeply entrenched. The impact on GDP is projected to reach $168 billion in the Gulf region, while the Levant region faces losses of around $30 billion, the United Nations official noted. Dardari highlighted that the broader Arab economy relies on virtually a single commodity, stating, The Arab economy relies on virtually a single commodity.
He added, Even countries that do not export oil depend on remittances from expatriates in oil-exporting countries and on aid from those same countries, while the oil-exporting countries themselves rely on a single product,
describing this fragility as unsustainable.
Employment and poverty figures underline the humanitarian strain. The conflict is expected to eliminate approximately 3.7 million jobs, with Dardari noting, We estimate that the number of jobs we will lose as a result of this conflict is around 3.7 million.
Furthermore, roughly four million additional people in the region are projected to fall, or have already fallen, below the poverty line as a direct result of the hostilities.
Strait of Hormuz Navigation Warnings and Military Drills
Maritime security in the Persian Gulf remains severely strained as Iran prepares a live-fire naval drill in the Strait of Hormuz. The Strait of Hormuz, the narrow mouth of the Persian Gulf, again has become a focus of tensions as Iran prepares to launch a military drill that could see fire into a lane crucial for global shipping. Its narrowest point is just 33 kilometres wide, flowing from the Persian Gulf into the Gulf of Oman.
Iran has warned ships that it will conduct a live fire drill Sunday and Monday in the strait, which sees a fifth of all oil traded pass through the tight corridor between the Islamic Republic and Oman. A notice to mariners sent Thursday by radio warned that Iran planned to conduct “naval shooting” in the Strait of Hormuz on Sunday and Monday, with coordinates putting the drill potentially going into what is known as the Traffic Separation Scheme.
In response to the maneuvers, the U.S. military’s Central Command issued its own warning early Saturday, telling Tehran that any unsafe and unprofessional behaviour near U.S. forces, regional partners or commercial vessels increases risks of collision, escalation and destabilization.
Diplomatic Maneuvers and Nuclear Stances
Behind the maritime standoff, diplomatic channels have moved through indirect pathways. A report by The Washington Post claims senior US officials privately warned Iran that Israel could target key Iranian negotiators while Washington pursued a diplomatic agreement aimed at ending the conflict and reopening the Strait of Hormuz. According to the report, the Trump administration feared that any attack on Iran’s negotiating team would derail ongoing diplomacy and trigger another round of regional escalation, with the warning reaching Tehran through indirect diplomatic channels.
At the same time, political statements from Washington claim significant diplomatic headway. Speaking during an interview with CNBC, Donald Trump asserted that negotiations are progressing favorably, claiming that Tehran had agreed to just about everything we need
while making it clear that preventing Tehran from developing nuclear weapons remains the United States’ primary objective. Trump also highlighted recent US military operations against Iranian military infrastructure, stating, We blew up Iran’s radar; they had no radar, they still don’t. We blew it up again the other night. They had a nice new radar; they were all set to go, and we blew it up last week. They have to start all over again for a third time.
Meanwhile, Iranian Foreign Minister Abbas Araghchi criticised the US Central Command (CENTCOM) after it hosted a regional security conference in Bahrain. Araghchi rejected the idea that Western military involvement has improved security in West Asia, arguing that foreign intervention has only increased instability and stating that Iran’s armed forces have demonstrated that outside powers cannot even guarantee their own security while adding that lasting peace in the region can only be achieved without external military interference.
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