Oxford Economics Cuts UAE GDP Forecast Citing Strait of Hormuz Risks

Oxford Economics has revised its economic growth projections for the United Arab Emirates downward, identifying the potential closure of the Strait of Hormuz as a primary risk to regional trade and energy security. The advisory firm’s latest assessment indicates that while the UAE’s non-oil sector remains resilient, heightened geopolitical tensions in the Middle East are weighing on broader fiscal forecasts. Geopolitical Risks to Energy Exports The Strait of Hormuz serves as the world’s most critical oil transit point, with approximately 20.5 million barrels of crude oil and refined products passing through the waterway daily. Oxford Economics warned that any disruption to this maritime route would immediately impact the UAE’s ability to export hydrocarbons, which remain a cornerstone of the national budget. A closure would not only stall energy shipments but also drive up insurance premiums and shipping costs for all regional cargo. Analysts noted that the downgrade is a direct response to the escalating risk profile in the Gulf. Although the UAE has developed the Habshan-Fujairah pipeline to bypass the strait, the infrastructure can only handle a portion of total exports,…