How has the war affected the Gulf’s external positions?

The impact of the war on balance of payments positions across the Gulf varies by country. Kuwait, Qatar and Bahrain are suffering severe blows due to the halt to their energy exports, and their current account positions may have deteriorated by up to 20-30% of GDP on an annualised basis. The impact is more ambiguous in Saudi and the UAE, while Oman is benefitting from a terms of trade windfall. Regardless, large foreign currency savings mean that dollar pegs are highly unlikely to break.