The Middle East is under significant pressure due to the global trade war. Interactions between the U.S., China, and the European Union challenge the region's economic stability.
Threats to the Oil Market
Despite avoiding direct tariffs, experts warn of negative impacts on the oil market. Reduced global demand could lead to a drop in oil prices, posing a serious concern for the economies of Saudi Arabia, the UAE, and Qatar, which continue to depend on oil revenue despite diversification efforts.
Currency and Debt Implications
The declining U.S. dollar makes imports more costly for countries with dollar-pegged currencies like Saudi Arabia and the UAE. High external debts denominated in dollars also exert financial pressure on nations such as Lebanon and Jordan. Jordan, in particular, is vulnerable due to significant trade ties with the U.S.
New Trade Corridors to the East
The trade war accelerates the Middle East's shift towards Asia. The growing GCC-Asia trade corridor and involvement in China's Belt and Road Initiative drive new investments and financial connections. Asian companies are increasingly establishing and expanding their regional presence in the Middle East.
The Middle East stands at the center of global trade instability. Despite efforts to diversify economies, the oil sector remains crucial, making the region vulnerable to external economic shocks.
