If UAE, an oil producer needs a bailout, you know its bad, much worse than the markets are pricing for. We may not even be on the scary section of the Trump-Iran War roller coaster yet.
UAE's economy is 25% energy exports, 15% re-export, 15% tourism, 15% finance and insurance. These have all zeroed out. At least 60% of their GDP is out of commission.
UAE is still in the war camp looking for round two with Iran. It probably won't survive round two as a sovereign entity. Kuwait and Bahrain are probably on even shakier ground, with Saudi troops on the streets of Bahrain. Oman is solid. Qatar is feeling it and KSA is on full political/security lockdown.
We could be on the cusp of a wide scale political collapse of several of the Persian Gulf monarchies. These governments rely on large numbers of foreign guest workers to stay functional. Their armies and security forces rely on trained foreigners. And their people expect a certain standard of living to tolerate disenfranchisement. These are all breaking down.
Should one fall, it may set off a domino effect and take 15% of the worlds oil and 20% of the world's LNG offline. $200-250 a barrel wouldn't be unreasonable should that happen.
| Qatar: ~94–95% of the total labor force. |
|---|
| UAE: ~80–95% (8.7 million migrant workers). |
| Kuwait: ~70% of the total population, with extremely high private sector reliance. |
| Bahrain: Over 53% of the total population, with higher ratios in the private sector. |
| Saudi Arabia (KSA): Roughly 60% of the total workforce (2020 estimates). |
| Oman: Roughly 53-60% of the population, with significant reliance on expatriate labor. |