The damage from the US-Israeli war on Iran will cost Gulf countries more than $200 billion, while the wider economic losses could reach nearly four times that amount by 2030 based on a report by Allianz Trade.

Gulf states bore the brunt of Iran’s retaliation after the United States and Israel launched the war on February 28. Iran restricted shipping through the strategically important Strait of Hormuz and struck  gulf  infrastructure in US-allied countries, including airports, seaports, energy facilities as well as American assets.

“Physical damage across the region is assessed just above $200bn, mostly concentrated in Hormuz-locked economies, especially in energy infrastructure,” Allianz Trade said in a report.

The report said more than 80 energy facilities were hit, mainly in Kuwait, Qatar and Bahrain. About a third were severely damaged. The conflict is also expected to slow growth in tourism and real estate over the coming years.

“The total cost of the war for the GCC is set to reach $790 billion, a cumulative gap of 5.9 percent of GDP relative to the pre-war trend through 2030,” the report said.

That figure represents the cumulative loss of economic output from 2026 to 2030, the difference between what the region was expected to produce before the war and what it is now projected to produce.

To help offset the losses, Gulf states are expected to redirect some sovereign wealth fund investments toward domestic projects. The region’s external surplus is expected to be cut in half, partly offset by about $120 billion in additional domestic investment through 2030, at the expense of international investment.

“The war accelerates the need to spend more domestically as government priorities have shifted away from mega-projects towards resilience, and security-related ones,” the report said.

Gulf states are also expected to increase domestic infrastructure and defence spending to $380–400 billion through 2030, creating an estimated $160 billion in opportunities for private and foreign investors.