Trade and the Gulf
The conflict that began in the Gulf on 28 February 2026 has cost lives and livelihoods across the region. Its effect on trade has been severe and uneven. The WTO’s October trade outlook finds container throughput at Jebel Ali down about 60% in the first half of 2026, while Sohar in Oman rose about 40% and Jeddah’s South Container Terminal almost 79%. Around 500,000 containers crossed the Gulf by road and rail between March and August.
For a business that sells into the Gulf, the gateway is no longer a default. Which port, which corridor, which partner and how much stock to hold are now decisions, with costs that may outlast a reopening. Those are the decisions to which Fractionova brings AI-native Opportunity Intelligence and principal-led judgement.
This perspective draws on the WTO’s Global Trade Outlook and Statistics, Update: October 2026 (8 October 2026), with the World Bank’s October 2026 Middle East, North Africa, Afghanistan and Pakistan Economic Update and the IMF’s October 2026 Regional Economic Outlook: Middle East and Central Asia. Figures are the publishers’ and dated to their reports; the situation has continued to change since. The interpretation is Fractionova’s. Fractionova is not affiliated with the WTO, the World Bank or the IMF.
Jebel Ali UAE
Salalah Oman
Sohar Oman
Jeddah South Container Terminal Saudi Arabia
Container throughput in the first half of 2026, compared with a year earlier. Ships reach Jebel Ali through the strait; the other three ports lie outside it.
The WTO’s port and corridor figures show cargo leaving routes through the strait for gateways outside it, and for land routes across the Gulf.
Fujairah Terminals and Khor Fakkan, on the Gulf of Oman outside the strait, have served as alternative ports for the UAE. Feeder services were rerouted through them, with cargo carried on by road and rail under customs transit to Khalifa Port, Jebel Ali and Sharjah.
WTO, Global Trade Outlook, October 2026, p. 25
Around 500,000 containers, measured in twenty-foot equivalent units, moved across the Gulf region by road and rail between March and August. They included new bonded corridors linking east-coast ports directly with Jebel Ali.
WTO, Global Trade Outlook, October 2026, p. 25
Throughput at Jeddah’s South Container Terminal, on Saudi Arabia’s Red Sea coast, rose almost 79% in the first half of 2026, with growth in imports, exports and trans-shipment. Transit container traffic through Aqaba, in Jordan, rose 155%, largely reflecting cargo for Iraq.
WTO, Global Trade Outlook, October 2026, p. 25
The alternatives carried risk of their own. Tanker traffic through Bab el-Mandeb fell from around 0.8 million tonnes a day to close to zero as attacks around the Red Sea intensified, and Saudi Arabia’s East–West Pipeline shut on 11 September after renewed attacks, reopening on 22 September.
World Bank, MENAAP Economic Update, October 2026, p. 12
A note on the figures: the WTO’s port figures compare the first half of 2026 with a year earlier, and some are approximate in the source. The World Bank’s data run to 24 September 2026. Conditions have continued to change since these reports were prepared.
The WTO raised its forecast for growth in world merchandise trade volume in 2026 to 3.9%, from 1.9% in March, despite the conflict. The reason is a stronger-than-expected surge in AI-related investment. AI-enabling goods, from chips to the servers and the power, cooling and networking equipment that data centres need, accounted for 47% of the growth in world merchandise trade value in the first half of 2026. Our companion perspective looks at the Gulf’s own AI build-out.
Read Building Compute Through Conflict
Inside the region, the picture reverses. The WTO expects Middle East merchandise exports to fall 17.2% in volume in 2026, and imports 15.4%. The World Bank projects the six GCC economies to contract by 4.3% in 2026, after growth of 4.5% in 2025, and finds that access to export routes outside the Strait of Hormuz has largely determined who is most severely affected.
Oman
United Arab Emirates
Saudi Arabia
Bahrain
Kuwait
Qatar
Real GDP growth forecast for 2026, % · World Bank, MENAAP Economic Update, October 2026, table 1.1 · assumes disruption continues to the end of 2026
For a business selling into the Gulf, the GCC is not one market in this respect. Oman, whose main ports lie outside the strait, is projected to grow. Qatar and Kuwait, with few alternative routes, face their weakest performance in more than five decades and three decades respectively.
In the World Bank’s words, disruptions to maritime routes “raise costs quickly but unwind slowly”. The evidence comes from the Red Sea as well as the Gulf.
War-risk insurance premia on Red Sea routes rose from almost zero in 2023 to about 1% of cargo value in early 2024, and stayed elevated even after attacks declined substantially in 2025. Suez Canal traffic remains well below its 2023 level; the World Bank estimates Egypt’s losses at US$16.5 billion between November 2023 and July 2026.
World Bank, MENAAP Economic Update, October 2026, box 1.2
The IMF estimates that closing the Strait of Hormuz raises the cost of containerised trade by more than 13% for Iraq and 11% for Qatar, even after cargo is rerouted overland to ports outside the strait. It says the estimates likely understate the full cost, as they leave out non-containerised trade, higher energy prices and new road or rail investment.
IMF, Regional Economic Outlook, October 2026, p. 45
By the end of June, container spot rates from Asia stood at around US$4,900 to US$6,500 per forty-foot container to Europe and the Mediterranean, and US$6,200 to US$8,000 to North America. In July, MSC added a congestion surcharge of US$500 per container on shipments from Northern Europe to India, Pakistan, Sri Lanka and Bangladesh.
WTO, Global Trade Outlook, October 2026, pp. 24–25
Rerouted vessels and containers have put pressure on capacity in South Asia, and some hubs gained traffic. Pakistan’s exports of sea freight transport services rose 73% in the first half of 2026, vessel calls at Karachi’s major container terminals were 14% higher in July, and trans-shipment at Colombo rose 11% in the first eight months of the year.
WTO, Global Trade Outlook, October 2026, pp. 25–26
A finding matters commercially when it is connected to a specific business. For a company that sells goods into the Gulf from India or elsewhere, these are the questions Fractionova would put first, organised by the dimension of the opportunity they affect.
Customer demand
The World Bank projects growth of 3.1% in Oman in 2026, against contractions of 20.9% in Qatar and 14.6% in Kuwait. Where demand holds up now depends partly on which routes a market can still use.
Which Gulf markets should we prioritise, given their route exposure as well as their demand?
Partners & counterparties
A distributor’s value now includes access to gateways outside the strait, bonded transit and stock held close to customers. The WTO reports feeders rerouted through Khor Fakkan and Fujairah, with onward customs transit to Jebel Ali, Khalifa Port and Sharjah.
Can our Gulf partners serve customers through the disruption, or do we need a second partner outside the strait?
Technology & capability
When shipments are slower and less predictable, spares, service capacity and stock held in the region become part of what customers buy.
What should we hold or service locally so that customers are not exposed to transit delays?
Economics & commercial potential
Freight, insurance and stock-holding costs have risen, and the World Bank’s Red Sea evidence suggests they will not fall quickly when routes reopen.
How should our prices and terms share these costs, and for how long?
Policy & geostrategic conditions
Bonded corridors and customs transit made the overland routes work. The IMF finds that lower trade barriers and transport links that deepen regional integration reduce the losses from a closure. Our perspective on the UAE’s trade position examines the wider realignment.
Which customs, transit and free-zone arrangements could we use, and how secure are they?
Timing & market readiness
The World Bank finds firms postponing investment even when financing is available, and warns that deferred investment may not return quickly. Waiting has a cost too.
What do we commit to now, and what do we make conditional on the strait reopening?
None of these reports can say when the strait will reopen, and their baselines differ. Planning for both cases is more useful than forecasting one.
These reports describe flows, forecasts and costs. They do not tell a particular business which gateway, partner or price is right for its product.
Bring the question in the form your board would ask it.
Which Gulf gateway and corridor should our goods use, and do we need two?
Where should we hold stock for Gulf customers while the strait is impaired?
Can our Gulf distributor serve customers through the disruption, or do we need a partner outside the strait?
How should our prices and terms reflect costs that may outlast a reopening?
This is a hypothetical illustration, not a client engagement or a claim of achieved outcomes.
A Chennai-based maker of industrial pumps and valves ships to distributors in Dubai and Riyadh through Jebel Ali. Since March, deliveries have slowed and freight and insurance costs have risen, and its distributors are asking whether it can hold stock closer to them. Leadership needs to decide how to serve the Gulf for the next eighteen months without knowing when the strait will reopen.
Fractionova’s AI engine would connect port and corridor options, transit times and costs, customs and free-zone arrangements, partner capability and the economics of holding stock with the company’s margins and its customers’ needs. Principal-led review would establish which route supports the next commitment, and what would trigger a change if the strait reopens.
Stay with Jebel Ali and hold more stockKeep the existing route and distributors, and carry more inventory in the UAE to absorb delays. The questions are the cost of the stock, who holds it and how long the disruption lasts.
Split the route between Khor Fakkan and JeddahShip UAE orders into Khor Fakkan with onward customs transit, and Saudi orders into Jeddah on the Red Sea. The questions are transit times, onward costs and the security of each corridor.
Appoint a stockholding partner in OmanHold stock with a partner in Sohar and serve the UAE by road. The questions are the partner’s capability, the cost of the overland leg and how customers will be supported.
You do not need to choose a format first. The starting point is the decision your business needs to make.
Concentrated intelligence for a consequential choice.
A focused investigation around a defined decision, culminating in a decision brief with the recommended direction, unresolved questions and conditions for commitment.
For example: Decide which Gulf gateway and stock position to use for the next eighteen months, and what would change the decision.
A coordinated mandate to develop market access and commercial relationships.
An integrated investigation into market priorities, entry structures and counterparties, with prioritised partners and preparation for engagement.
For example: Qualify distributors and logistics partners outside the strait that could hold stock and serve customers in the UAE and Saudi Arabia, and prepare engagement.
A retained intelligence capability around your strategic agenda.
Recurring investigation and monitoring, supported by agreed business context and structured principal-led reviews.
For example: Track routes, freight costs and the conflict’s effect on Gulf demand, with agreed triggers for changing the plan.
Each engagement is commissioned against a defined business objective. Scope and fees reflect the analytical depth, market coverage, counterparty work and continuity required.
Founder & Principal Prabha Shankar leads the technical-commercial judgement behind Fractionova’s work. An engineer and international business specialist, he brings nearly three decades of experience across automotive engineering management, advanced mobility, new energy, international market development and complex programme execution.
At Fractionova, that experience shapes the questions put to the AI engine, the assumptions challenged during investigation and the commercial significance assigned to its findings.
It moved more than it stopped. The WTO reports container throughput at Jebel Ali down about 60% in the first half of 2026, while Sohar rose about 40%, Salalah 15% and Jeddah’s South Container Terminal almost 79%. Around 500,000 containers crossed the Gulf by road and rail between March and August.
The WTO raised its 2026 forecast for growth in world merchandise trade volume to 3.9%, from 1.9% in March, because AI-related investment surged more than expected. AI-enabling goods accounted for 47% of the growth in world merchandise trade value in the first half of 2026.
The World Bank projects the GCC economies contracting by 4.3% in 2026, with the largest falls in Qatar (20.9%) and Kuwait (14.6%), which have few alternative export routes. Oman, whose main ports lie outside the strait, is projected to grow by 3.1%.
Not necessarily quickly. The World Bank finds that disruptions to maritime routes raise costs quickly but unwind slowly: war-risk premia on Red Sea routes stayed elevated after attacks declined, and Suez Canal traffic remains well below its 2023 level.
Fractionova brings AI-native Opportunity Intelligence and principal-led judgement to cross-border decisions: which route and gateway to use, which partner to engage and what to commit to now, for businesses working between India, the Gulf and other markets.
India rerouted its oil within months of the Hormuz closure. ORF maps the slower routes, from power links to green ammonia, and what they mean for business.
Microsoft finds AI users in India and the UAE well ahead of the global average. What buyer readiness changes, and does not, for suppliers entering.
Deloitte finds 77% of companies weigh where an AI solution comes from. What sovereign AI changes for cross-border sales, local partners and market entry.
A route to choose. A partner to qualify. A stock position to test. A commitment to keep conditional.
Start with what you are considering, what is at stake and what you need to determine.
Sources and notes. Container, port, freight and trade figures are from the WTO, Global Trade Outlook and Statistics, Update: October 2026 (8 October 2026), pages 2 to 26; trade forecasts are in volume terms, and the AI-enabling goods figure is in value terms. Growth forecasts, tanker and pipeline figures and the evidence on persistent costs are from the World Bank, From Divide to Opportunity: AI, Jobs, and Growth, Middle East, North Africa, Afghanistan and Pakistan Economic Update (October 2026), chapter 1, box 1.2 and table 1.1; its data run to 24 September 2026, and its forecasts assume the conflict continues through the end of 2026 without sustained further escalation. Trade-cost estimates and the IMF baseline are from the IMF, Regional Economic Outlook: Middle East and Central Asia (October 2026), key messages and chapter 3, pages 44 to 51; the estimates are model-based, cover containerised trade only and are described by the IMF as likely to understate the full cost. Each figure is attributed to its publisher, and figures from different publishers are not combined. Fractionova is not affiliated with the WTO, the World Bank or the IMF.
Fractionova equips clients with intelligence and considered recommendations to inform their decisions. Investment and implementation decisions remain with the client; execution and outcomes depend on the organisations involved and prevailing conditions.