Gulf economies face contraction amid Iran war and Houthi strikes

KKR: KKR is a leading private equity and alternative investment firm with a focus on infrastructure and growth opportunities. The analysis notes KKR as among the financiers that could co-invest in Gulf initiatives if economic rebound materializes. Qatar: Qatar is a Gulf Cooperation Council member state whose economy relies heavily on energy exports and sovereign wealth investments through the Qatar Investment Authority. In the current news, the country faces severe economic contraction in 2026 due to the Iran war and resulting blockage of the Strait of Hormuz, with risks extending to its tourism sector and diversification plans. Blackstone: Blackstone is a major global alternative asset manager involved in private equity, real estate, and infrastructure investments. The news positions the firm, alongside peers, as a potential co-investor in Gulf diversification projects if regional stability returns. Brookfield: Brookfield is a global asset manager specializing in infrastructure, real estate, and renewable energy investments. It is cited in the commentary as one of the Western firms likely to partner on Middle East projects amid efforts to attract foreign capital. George Hay: George Hay is the EMEA Editor at Reuters Breakingviews, overseeing coverage across Europe, the Middle East, and Africa while focusing on the global energy transition. He is one of the authors of the commentary analyzing the Gulf economic fallout from the Iran war. Saudi Arabia: Saudi Arabia is the largest economy in the Gulf region, pursuing Vision 2030 to reduce oil dependence through major infrastructure and tourism projects funded in part by its Public Investment Fund. The news highlights how the Iran war, Houthi strikes on its main airport, and broader disruptions threaten its expected 2026 GDP contraction and recovery timeline. Afiq Fitri Alias: Afiq Fitri Alias is a data visualisation columnist at Reuters Breakingviews who joined in 2023 and previously covered UK politics and international affairs as a data journalist. He co-authored the analysis of Gulf economic data and recovery risks. United Arab Emirates: The United Arab Emirates, particularly Dubai, serves as a regional hub for tourism, aviation, and international business, with significant real estate and aviation activity. The commentary details how the ongoing conflict has sharply reduced visitor numbers and flight demand in 2026, pressuring its more tourism-dependent economy. Geopolitical Risk: Houthi missile strikes on a key Saudi airport symbolize escalating threats that could prolong disruptions in key shipping routes and deter tourism and investment. Recovery Prospects: A durable peace deal involving US President Donald Trump could strengthen the anticipated 2027 economic rebound across the region. Economic Diversification: Gulf sovereign wealth funds are actively seeking foreign partnerships to fund projects shifting economies away from oil dependence.