Capital Economics analyst Jason Tuvey says that despite a US‑Iran peace agreement, Gulf output faces its deepest contraction since the early 1980s. He forecasts Gulf GDP will fall about 5–6% in 2026, with Kuwait, Qatar and Bahrain the worst affected. Energy supply normalisation may stretch into 2027. Economic diversification will be harder and geopolitical alignments could be reshaped. Tuvey warns Gulf states may be incentivised to raise oil production, which could push prices toward about $50/b

Capital Economics analyst Jason Tuvey says that despite a US‑Iran peace agreement, Gulf output faces its deepest contraction since the early 1980s. He forecasts Gulf GDP will fall about 5–6% in 2026, with Kuwait, Qatar and Bahrain the worst affected. Energy supply normalisation may stretch into 2027. Economic diversification will be harder and geopolitical alignments could be reshaped. Tuvey warns Gulf states may be incentivised to raise oil production, which could push prices toward about $50/bbl, and that the conflict’s end will still leave lasting economic effects.