Four transitions: Structural economic consequences of the US–Israeli war on Iran for the GCC

Gulf governments expect their economies to rebound once the Strait of Hormuz reopens and a durable peace holds, as they did after previous crises. This article argues that the 2026 US–Israeli war on Iran is a different kind of shock. It documents four simultaneous transitions in the Gulf Cooperation Council economy, in hydrocarbon demand, logistics, investment and people, and sets out four mechanisms through which each may persist: sunk and contractual lock-in, belief-based multiplicity, conflict-risk persistence and their cross-channel compounding. Assessing the mechanisms comparatively across the six member states, it finds that a return to the pre-war equilibrium is improbable under any plausible post-conflict scenario, because the conflict-induced fiscal squeeze amplifies all four channels at once. The article’s contribution is to connect the four channels through an explicit persistence framework, in which compounding across channels produces a shift larger than any single-channel account predicts.