Gulf Workers Face Daily Hardship as War Disrupts Ports, Power, Water Systems

Six months of war have fractured the stability that underpinned the Persian Gulf’s extraordinary wealth. The damage runs deeper than energy facilities. Ports, airports, power grids, desalination plants, financial centers, and tourism hubs all face the same regional risks, and the people who live and work across the Gulf are feeling the consequences in their daily lives.

Repairing damaged oil and gas infrastructure may take months or longer. Restoring the confidence of global markets that Gulf exports can reach them reliably may prove even harder.

Jim Krane, the Wallace S. Wilson Fellow for Energy Studies at Rice University’s Baker Institute for Public Policy, framed the core problem plainly: “The war doesn’t change the fact that the Gulf’s huge low-cost oil and gas reserves are the world’s most profitable. But the war signals to investors, including local national oil companies, that they may be prevented from moving cargoes to market.”

That signal matters. Iran’s demonstrated ability to threaten the Strait of Hormuz has already shifted investor calculations. Producers without geographic constraints on sea access, including Algeria, Brazil, Mozambique, and the United States, now look more attractive by comparison. The political risk premium attached to Gulf production has risen sharply.

Tourism and aviation sectors face a different but equally serious challenge. Dubai, Abu Dhabi, and Doha built their regional dominance over decades by turning geography into competitive advantage through highly connected airports, world-class hotels, business services, and environments perceived as predictable and safe. The war has undermined that entire value proposition.

Hotel demand in Dubai collapsed to between 7 and 14 percent of pre-war levels in the conflict’s opening months. In the first week alone, hotel reservation cancellations in Dubai exceeded 80,000 as properties slashed rates to maintain occupancy. The industry achieved gradual recovery to 20 to 30 percent of pre-war levels by summer. The gap remains enormous.

Travel incentives and visa reforms have produced mixed results, according to Joseph Kechichian, a senior fellow at the King Faisal Centre in Riyadh. “Practically speaking, the Arab Gulf region’s reputation as a safe and reliable destination for tourists, businesses, and expatriate workers will only be fully restored after the war ends,” Kechichian said.

Restoring confidence rests on individual perceptions, making it an uphill struggle. Rob Geist Pinfold, who teaches International Security at King’s College London, explained the stakes: “This is one reason why they are so keen for the U.S. to make a deal with Iran, even one that is on Iran’s terms. There is a feeling that recovery can’t happen while the guns are still firing.”

Expatriate workers represent a particularly important constituency. Andreas Krieg, an associate professor at the Defence Studies Department of King’s College London, noted that “The Gulf’s economies depend on attracting highly mobile international labor. Executives, engineers, and professionals will tolerate considerable geopolitical risk if salaries are attractive and daily life remains predictable. They become much less tolerant once children’s schooling, family security, air travel, and access to basic services become uncertain.”

The six Gulf Cooperation Council states now face recovery from fundamentally different positions. Qatar, Kuwait, and Bahrain are especially exposed because their export routes depend on Gulf maritime passages, including the Strait of Hormuz. Saudi Arabia has greater flexibility through its East-West pipeline. The United Arab Emirates can route exports through Fujairah on the Indian Ocean side of the Strait. Oman sits even further from the chokepoint, with key export infrastructure already beyond the Strait’s reach.

Saudi Arabia appears best positioned to turn the crisis into strategic advantage. Its scale, geographic depth, Red Sea coastline, and East-West pipeline offer options unavailable to most neighbors. Yet Riyadh faces a difficult fiscal balance. Vision 2030, the country’s ambitious plan to reorient its economy away from fossil fuels, requires massive investment even as defense, infrastructure protection, and economic resilience demand more resources. The likely result is reprioritization, with economically and strategically valuable projects advancing while some prestige initiatives are delayed or scaled back.

The UAE possesses vast financial resources and strategic advantage in Fujairah, which provides Indian Ocean access while bypassing Hormuz. Its broader economic model, though, depends heavily on the Gulf’s reputation as a safe, reliable place to do business. Its priority will be preserving the perceptions of seamless global connectivity that underpin the Emirati economy.

Qatar enjoys enormous sovereign assets and substantial financial buffers, but its economy remains highly dependent on uninterrupted LNG production and exports. Doha recently repatriated an estimated 13 billion dollars from Western holdings to shore up domestic liquidity and back local banks, offsetting non-resident deposit outflows. As Krieg observed, “Ras Laffan has been restoring capacity, but even fully repaired liquefaction facilities do not solve the strategic vulnerability if LNG carriers cannot move predictably through Hormuz.” Qatar has used Golden Pass, a U.S.-based LNG project owned largely by Qatar’s state-run gas giant, and cargo swaps to compensate for some lost exports, but these measures cannot replace domestic production. “I would expect physical capacity to recover much faster than export normality,” Krieg said. The crisis is likely to accelerate Qatar’s efforts to expand overseas energy investment and geographic diversification.

Kuwait has substantial financial capacity to absorb prolonged shock, but its geographic exposure to the Gulf limits that resilience. Damage to the Mina Al-Ahmadi refinery and reliance on Gulf maritime routes highlight the vulnerability of concentrated export infrastructure. As Li-Chen Sim of the Middle East Institute noted, “Kuwait is accelerating the phased deployment of the Al Shagaya renewable energy complex, which had been held hostage to politics for years.”

Oman is arguably the sole GCC state whose strategic position has improved since February. With export infrastructure outside Hormuz, Oman is relatively insulated from rising chokepoint risk. Duqm and other Indian Ocean-facing assets could gain importance as firms seek logistics, energy, and industrial platforms less exposed to Gulf disruption. Muscat’s diplomatic role may also grow as GCC members seek workable arrangements with Iran.

Bahrain is most vulnerable. Limited fiscal space, high debt, and small territory leave it highly exposed. The archipelago nation lacks both strategic depth and the sovereign financial buffers needed to absorb prolonged disruption. Bahrain is now fast-tracking studies into offshore wind and cross-border solar projects, including subsea connections to generation assets in Saudi Arabia, according to Sim. Its resilience will depend on support from larger GCC partners and a return to stability.

The longer-term test may be whether the crisis strengthens confidence within the Gulf itself. What may be required, according to Kechichian, is “an acceleration of entrepreneurial efforts to encourage capable Arab Gulf minds to invest at home, trust their own populations, and applaud the creation of wealth across the board.” The goal is not simply restoring the prewar economy, but convincing domestic and foreign investors that the Gulf remains a place where capital can be deployed with confidence.

None of the six GCC members can simply abandon hydrocarbons or the globalized economic strategies that have made the Gulf prosperous. The defining question of the post-war period is whether they can make those strategies resilient enough to survive the next disruption, and whether the workers, families, and communities who built this prosperity will still be there when the answer becomes clear.