Report Says Economic Impact of Strait of Hormuz Closure Would Differ Across Gulf States

(MENAFN) Fitch Ratings said on Thursday that the effects of a closure of the Strait of Hormuz would vary among Middle Eastern economies, though most countries could likely absorb the shock without affecting their current credit ratings.

Fitch’s assessment assumes the strait would remain effectively closed for less than a month and that no major damage would occur to energy production or transportation infrastructure. Under this scenario, the impact would differ across countries, but existing fiscal buffers and economic frameworks suggest that sovereign credit ratings would remain largely stable.

With the exception of Oman, Gulf Cooperation Council (GCC) members and Iraq rely on the strait for the export of most of their hydrocarbons. The report highlighted that Bahrain, Iraq, Kuwait, and Qatar transport between 87% and 95% of their oil exports via the passage, with Iraq and Qatar having already suspended a significant portion of production.

Based on 2025 shipment data and assuming oil prices of $85 per barrel during the disruption, Fitch estimated that each week of a closure could reduce hydrocarbon export revenues for these four countries by roughly 0.4% of GDP. The agency noted that part of this loss could be offset through the sale of stored hydrocarbons, although fully mitigating the revenue shortfall would be challenging.

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