Who bears the burden? Asymmetric economic impacts of the 2026 Iran war across countries

This paper examines the cross-country heterogeneity of macroeconomic outcomes following the 2026 Iran War and the closure of the Strait of Hormuz, using differentials between the October 2025 and April 2026 IMF World Economic Outlook forecast vintages as the identification strategy across a sample of 50 countries. Among non-GCC countries, trade openness and remittance dependence are the most robust determinants of GDP forecast revisions, both significant at the 1 percent level across nine robustness specifications; Hormuz export exposure is directionally consistent but imprecisely estimated, consistent with attenuation from measurement error. CPI pass-through from Hormuz exposure is heterogeneous and not robustly identified under ordinary least squares; median regression on the outlier-excluded subsample yields a positive but statistically insignificant point estimate. By contrast, GCC oil exporters experienced sharply negative GDP revisions, with a Hormuz exposure coefficient of opposite sign and substantially larger magnitude than the non-GCC estimate. This sign reversal is consistent with a dual-exposure mechanism — combined Strait closure and direct military targeting of exporter production and export infrastructure — that departs from the importer/exporter asymmetry documented in the oil shock literature since Hamilton (1983). The results indicate that the burden of the 2026 Hormuz shock was distributed systematically across countries, with the deepest non-GCC downgrades concentrated in remittance-dependent economies, greater trade openness associated with less unfavourable revisions, and Gulf exporters exposed to a transmission channel that the standard oil shock framework does not accommodate.