The conflict in the Middle East that began this week could have profound geopolitical and macroeconomic implications for the region. Energy supply from the Gulf has been severely disrupted, and non-oil sectors face an immediate drop in activity as well as longer-term challenges. In terms of what to watch for next, we will be keeping a close eye out for any signs about Iran's future leadership and whether they will pivot from the current strategy of retaliatory attacks, as well as any evidence that activity is normalising in the Gulf.
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