Goldman Sachs has produced some of the most detailed projections yet on the Iran war's economic toll, and the numbers paint a picture of damage distributed unevenly but felt everywhere, "Hvylya" reports, citing The Economist.

The Gulf states face the worst absolute hit. If the Strait of Hormuz remains closed until April and production takes two months to recover, annual hydrocarbon output could fall by 12-16% in Saudi Arabia and the UAE. Losses in Bahrain, Kuwait and Qatar could exceed a quarter of annual production. A two-month conflict could cause GDP to contract by double digits in Bahrain, Kuwait and Qatar, with declines of roughly 8% in the UAE and about 5% in Saudi Arabia.

Europe faces a different kind of blow. The bank estimates that after periods of high inflation, a 10% increase in energy prices raises long-run inflation expectations in the EU by about 0.12 percentage points - roughly three times the normal effect. If disruptions in the strait persist for five more weeks, euro-area inflation could rise by nearly a full percentage point over the next year. Markets are now predicting two quarter-point rate increases by the ECB by year's end - a sharp reversal from pre-war expectations of rate cuts.

Poorer Asian economies are especially vulnerable. Goldman estimates that a lasting jump from $70 to $85 per barrel would sap Thailand's current-account balance by about 1.2% of GDP and India's by roughly 0.6% - and current prices already exceed that range. India spends roughly 3% of GDP a year on imported oil; Thailand spends nearly 5%. Wider deficits tend to weaken currencies, and India's rupee has already fallen to a record low against the dollar.

The United States, by contrast, is the most insulated major economy. As a net energy exporter since 2019, it has structural buffers unavailable to import-dependent nations. Yet even American consumers face a roughly 20% rise in gasoline prices since the war began, limiting the Fed's ability to cut rates in response to any slowdown.

Previously: Fatal Miscalculation: Gulf States Refuse US Basing - Then Iran Hits Their Infrastructure.