Egypt, which had staked its economic recovery on regional stability, is now absorbing compounding shocks from the war on Iran: declining Suez Canal revenues, rising energy costs, and a contraction in tourism, according to Frederic Wehrey, a senior fellow at the Carnegie Endowment for International Peace.
Writing in Time, Wehrey - a former U.S. intelligence officer who served in Baghdad - said the economic picture across the region is bleak. Egypt's wealthier Gulf benefactors, meanwhile, are redirecting resources inward - shrinking the financial lifeline Cairo has long depended on, "Hvylya" reports.
The war's widening effects are already sending tremors through the region - from surging energy costs and disrupted shipping lanes to fresh displacement crises. Defense spending across the region, already swollen, will likely surge further, Wehrey warned, squeezing public budgets for health care and education.
The conflict is halting, or reversing, the modest economic progress of recent years. Rather than collapsing, Iran is retaliating by disrupting global energy flows through the Strait of Hormuz, compounding the economic damage.
The economic toll, Wehrey concluded, will fall hardest on those with the fewest resources to absorb it.
"Hvylya" previously explored how Saudi Arabia activated a quiet insurance policy against the Hormuz nightmare.