Gulf economies are struggling to maintain normal business activity as the war in Iran enters its ninth month and conflict has also erupted in Yemen. The disruption is affecting transport, investment events and energy infrastructure across the region.
Riyadh Air, Saudi Arabia’s planned luxury carrier, is transporting international passengers by bus to and from an alternate airport located four and a half hours from its hub after strikes damaged the main airport. Saudi Arabia’s major investment conference has also been postponed until next year.
The state-owned oil company Saudi Aramco saw its headquarters hit, while a critical pipeline was also struck. Ships passing through the Strait of Hormuz continue to face missile and drone attacks, with some vessels catching fire. The heightened risk of further escalation is adding to pressure on regional businesses.
The energy conference ADIPEC began in Abu Dhabi on Monday, bringing together executives and government ministers from around the world. Darren Woods, chief executive of Exxon Mobil, did not attend because of security concerns in the region, according to a person familiar with his thinking who was not authorized to speak publicly. Organizers said in a statement that “high-level participation is very strong,” but did not address the reasons for Woods’s absence.
The International Monetary Fund expects economic growth across the Gulf Cooperation Council to fall by 5 percent this year. Kuwait, Bahrain and Qatar are projected to experience double-digit contractions because their energy exports depend heavily on access to the Strait of Hormuz, which remains under threat.
Sources: The New York Times Business.