Gulf GDP Seen Falling 5% to 6% in 2026 as Energy Supply Normalization May Extend to 2027

Capital Economics analyst Jason Tuvey said Gulf economic output still faced its deepest downturn since the early 1980s, despite a peace agreement between the United States and Iran. According to Jin10, Tuvey wrote in a report that Gulf GDP was expected to fall by about 5% to 6% in 2026, with Kuwait, Qatar, and Bahrain hit the hardest. He said a return to normal energy supplies could extend into 2027. Tuvey added that efforts to diversify Gulf economies would now become more difficult, while geopolitical relationships could be reshuffled. He also said Gulf states might be incentivized to raise output, which could push oil prices down to around $50 a barrel. “Over the long term, even if the war is about to end, it will leave a lasting impact,” Tuvey said.