UN warns of higher prices due to Hormuz Strait crisis — The National

Abdullah Al Dardari, UN assistant secretary-general and director of the UNDP Regional Bureau for Arab States, said in Manama, Bahrain, that Middle East residents will have to adapt quickly to a higher cost of living. According to him, the war with Iran and the standoff in the Strait of Hormuz are forcing people to adjust to lower subsidies, higher prices and greater taxation.

As The National reports, Al Dardari spoke on the sidelines of the Manama Dialogue. He noted that changes which normally take decades are now occurring within months, as countries in the region attempt to rebuild what was destroyed and respond to disruptions in the strategic strait.

Losses for regional economies

The UN official said that years of excessive dependence on the Strait of Hormuz had made countries in the region complacent. By his estimate, the Middle East loses 7% of GDP annually, while all of the region's economic growth for 2025 has been lost.

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Al Dardari also described a new group of countries as “wealthy but vulnerable.” Such countries, he said, have financial reserves, but following the consequences of the war with Iran, they are changing their priorities and focusing more on their own recovery. Lebanon and Syria, which were already in a difficult situation, had previously depended on financial injections from wealthier countries in the region, he added.

Poverty and regional cooperation

According to the UN representative, a resumption of war between the United States and Iran could significantly worsen existing problems. He cited UN data showing that 4 million people in the region have fallen below the poverty line, while another 4 million have become unemployed.

At the same time, Al Dardari positively assessed the efforts of Gulf states to develop regional cooperation, which is intended to help circumvent the consequences of the closure of the Strait of Hormuz. In June, the Gulf Cooperation Council and UNDP held a roundtable in Riyadh on strengthening resilience and coordination among states and their neighbors. According to him, Turkey agreed to join this process, while the European Union also expressed interest.