UN Warns Iran Conflict Could Force Four Million Into Poverty Across Gulf Region
The United Nations has issued a stark warning that the ongoing war in Iran could push approximately four million people across the Gulf region into poverty, as the conflict enters its second month. According to a comprehensive report from the United Nations Development Programme (UNDP), Arab nations face potential economic losses ranging from $120 billion to a staggering $194 billion in gross domestic product due to severe disruptions in energy supply chains.
"Sharp and Sudden Economic Shock" Across Region
Abdullah Al-Dardari, the UN Assistant Secretary-General and Director of the Regional Bureau for Arab States, emphasized the unprecedented speed of this economic deterioration. "The number of poor people will increase by about four million people in our region in just one month," Al-Dardari stated. "This is a number that usually takes many years of economic decline, not one month."
Al-Dardari described the conflict, which began on 28 February 2026, as creating a "sharp and sudden economic shock" that should serve as a wake-up call for regional governments. "This crisis rings alarm bells for countries of the region to fundamentally reevaluate their strategic choices of fiscal, sectoral, and social policies," he told Asharq Al-Awsat.
GDP Losses Exceeding 5.2 Percent in Worst-Affected Areas
The UNDP report, released on 31 March 2026, projects that Gulf Cooperation Council countries and the Levant region will suffer the most severe economic consequences, with each area expected to lose more than 5.2 percent of their GDP. The overall regional economic loss is estimated to approach $194 billion, which could drive unemployment rates up by as much as four percentage points.
This economic downturn threatens approximately 3.6 million jobs across the region—more than the total number of jobs created throughout the Arab states during the entire previous year of 2025. The Levant region, encompassing Iraq, Palestine, Syria, Jordan, and Lebanon, faces particularly dire circumstances, with poverty projected to increase by 5 percent.
This increase would push an additional 2.85 to 3.30 million people into poverty in the Levant alone, accounting for over 75 percent of the total poverty increase across all Arab states. The situation is especially critical in countries like Syria, which continues to recover from a devastating 14-year civil war.
Strait of Hormuz Closure Cripples Energy Exports
The economic crisis stems primarily from the closure of the Strait of Hormuz, a vital waterway connecting the Persian Gulf to the Indian Ocean. Approximately 25 percent of global seaborne oil shipments and 20 percent of Liquified Natural Gas (LNG) exports pass through this strategic channel. Gulf countries such as Qatar, Kuwait, and Bahrain depend almost entirely on this route for their oil exports to reach international markets.
"It has become clear that the impact is very large," Al-Dardari explained. "There is a closure of the Strait of Hormuz, and oil exports have been greatly affected. Therefore, we are going to the extreme scenario, which is a severe impact on energy trade." The Gulf region produces about one-third of the world's oil and a significant portion of global LNG supplies.
Regional Nations Explore Alternative Transport Routes
In response to the crisis, some Arab countries are actively pursuing alternative transportation methods for their energy exports. Saudi Arabia is increasingly relying on oil pipelines that flow into Yanbu on the Red Sea, while Iraq and Syria are engaged in serious discussions about transporting crude oil and petroleum products overland.
The UNDP report utilized detailed analysis of previous crises and recovery challenges in Gaza, Syria, and Lebanon to project the current conflict's potential economic and social repercussions. As the war continues into its second month, regional governments face mounting pressure to implement emergency economic measures and develop long-term strategic policies to mitigate what the UN describes as a potentially catastrophic humanitarian and economic situation.
