AGBI - The Iran conflict
has no obvious winners or
losers
There is a credible medium-term scenario in which the crisis reinforces the GCC’s global role
via ReutersAt this stage of the Iran conflict, following inconclusive peace talks, it remains unrealistic to identify clear winners and losers. Conflicts of this nature tend to produce layered and time-dependent outcomes, where short-term gains often mask longer-term vulnerabilities.
What is evident, however, is that the crisis is reshaping the global landscape across geopolitics, economics and sectoral performance.
Rather than producing outright victors, it is driving a redistribution of power, capital and risk.
China and Russia are frequently seen as immediate geopolitical beneficiaries. Both gain from a distracted West, while Russia also benefits directly from higher oil revenues.
China meanwhile balances limited alignment with Iran with strategic distance in a way that preserves flexibility and maximises long-term advantage, holding a strong economic interest in bringing the conflict to an end.
For the main protagonists – the US and Israel – the picture is more ambiguous. Tactical successes have yet to translate into clear strategic advantage, and both face ongoing questions around deterrence and escalation.
In Iran’s case it is the reverse, as despite tactical losses, it retains strategic leverage through its ability to exert asymmetric pressure on global energy markets.
Europe appears exposed, facing renewed energy insecurity and economic fragility. Many emerging markets are under even greater strain, as rising food and fuel costs pressure public finances and social stability.
However, Europe could still reposition itself over time, particularly if it plays a meaningful role in resolving the conflict.
The GCC’s combination of pricing power, infrastructure and financial resilience allows it to continue generating strong energy revenues
The GCC initially appears vulnerable due to physical damage and reliance on energy routes through the Strait of Hormuz. Yet this exposure is also elevating its geopolitical importance.
The crisis underscores the world’s dependence on Gulf resilience, increasing the strategic weight of countries such as the UAE, Saudi Arabia and Qatar as stabilisers of global energy supply. It is also accelerating efforts to reduce reliance on critical chokepoints and strengthen regional cooperation.
The most immediate economic impact has been a surge in energy prices, driving inflationary pressures worldwide. For advanced economies, this complicates monetary policy and raises the risk of slower growth combined with persistent inflation.
Europe is particularly affected due to its energy dependency, with rising costs weighing on industrial output and competitiveness. The UK has been highlighted as especially exposed among major economies.
For developing countries, the situation is more severe, with higher energy and food prices threatening to reverse development gains.
India, as a major oil importer, faces inflationary pressures, currency weakness and strain on supply chains. Many emerging markets share similar vulnerabilities, increasing the risk of broader instability.
In contrast, the GCC’s combination of pricing power, infrastructure and financial resilience allows it to continue generating strong energy revenues even under constrained supply conditions, reinforcing sovereign balance sheets.
This enables continued investment at a time of global uncertainty and helps offset short-term growth pressures.
Sovereign wealth funds are well positioned to deploy capital strategically, both domestically and internationally. This is critical for advancing economic transformation programmes and investing in infrastructure that reduces dependence on the Strait of Hormuz while protecting key industries.
At the sector level, the crisis is creating clear divergence. Energy producers are the most immediate winners, benefiting from elevated prices and supply concerns. Defence and security industries are also gaining, as governments increase military spending in response to rising geopolitical risks.
Renewable energy is also emerging as a secondary beneficiary, as the crisis reinforces the need for diversification and sustainability. Investment in alternative energy, hydrogen and related technologies is likely to accelerate.
Conversely, airlines and logistics companies face rising fuel costs and operational disruption. Energy-intensive industries such as chemicals, steel and manufacturing are under pressure, particularly in Europe. Tourism and global trade are also affected, reflecting higher costs and increased uncertainty.
Further reading:
- Global financial shifts as the Iran war tide ebbs
- A Dubai business leader’s crisis plan: buy when others run
- From boom to brake: Gulf auto market under pressure
Within this disruption, however, there are opportunities for the Gulf. As companies reassess supply chains and prioritise resilience, the GCC’s geographic position and infrastructure become increasingly valuable.
The UAE, in particular, stands to benefit from its role as a global logistics, financial and commercial hub linking East and West.
While the region’s volatile environment remains a core vulnerability, there is a credible medium-term scenario in which the crisis reinforces the GCC’s global role. Adverse conditions may encourage greater regional cooperation, helping to overcome historic rivalries.
Higher energy revenues and strong fiscal buffers built during periods of high prices provide the financial resources to accelerate diversification and investment, while increased strategic importance enhances diplomatic influence.
The UAE’s position as a stable, well-regulated and globally connected economy may continue to attract capital and talent seeking a secure base, with its handling of the crisis also enhancing its reputation.
If the conflict remains contained, the region’s financial strength, infrastructure and connectivity could allow it not only to withstand current pressures but to emerge more central to the global economic system than before.
Tim Fox is a partner at Capital Gate Advisors and the former chief economist of Emirates NBD
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