Gulf states’ bypass routes cannot fully compensate for Hormuz closure

The Strait of Hormuz closure is hitting Gulf states hard – especially Kuwait, Bahrain and Qatar – which have no bypass routes, says Frederic Schneider, an economist and a non-resident senior fellow at the Middle East Council on Global Affairs. Even Saudi Arabia and the United Arab Emirates, which do have alternatives, cannot fully make up for the losses, made worse by a partial blockade of the Red Sea by Yemen’s Houthi rebels. He said reserves have helped Gulf states cope “up until now”, but a “huge burden” is building, pointing to Saudi Arabia’s widening fiscal deficit despite high oil prices.