The GCC should insure itself against the next Strait of Hormuz crisis
Summary
The Gulf Cooperation Council (GCC) countries are facing economic challenges due to the conflict involving the US, Israel, and Iran, which has disrupted oil exports through the Strait of Hormuz. Some GCC countries have found ways to reroute oil shipments, but others remain cut off, and experts suggest the GCC needs to work together more to reduce future risks and protect their collective interests.Key Facts
- The US-Israel war on Iran has disrupted oil exports through the Strait of Hormuz.
- Oman’s ports continue to operate normally with little impact.
- Saudi Arabia and the United Arab Emirates (UAE) have rerouted some oil exports through other ports (Yanbu and Fujairah).
- Kuwait, Bahrain, and Qatar are largely cut off from the global market and face economic challenges.
- The GCC faces risks of losing clients and economic harm due to ongoing disruptions.
- The UAE recently left OPEC, reportedly to gain a larger oil market share amid the crisis.
- Experts recommend the GCC use cooperation mechanisms like swap deals to help members deliver oil without physically shipping it through dangerous areas.
- Swap deals can help countries exchange oil or compensate each other to keep supplies stable without immediate physical transfer.
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