In a grocery store in Bahrain, Mahmoud Ali is going about his usual shopping routine. Despite the ongoing conflict in the Middle East, the shelves are still well-stocked, but the impact of disrupted shipping routes into the Gulf is now evident during checkout.
While there is no actual shortage, Mahmoud mentioned that prices of certain food items have noticeably increased in the past few days. In particular, the cost of meat has nearly doubled.
Similar to its neighboring countries in this arid region, the small Gulf nation heavily relies on imports, especially for its food requirements.
The conflict, which began on February 28 due to Israeli-US strikes on Iran, has significantly disrupted the transportation of goods through the vital Strait of Hormuz, leading to its closure.
“Economist Frederic Schneider from the Middle East Council on Global Affairs stated that most major ports in the UAE, Qatar, Kuwait, and Bahrain have either halted or reduced cargo operations,” due to the conflict.
Air transport, another crucial logistical aspect, is also operating below capacity due to frequent Iranian drone and missile attacks.
With key ports like Abu Dhabi, Jebel Ali, and Dammam being nearly inaccessible, ships are diverting to other ports in Oman and the UAE south of the strait.
Saudi Arabia has emerged as a vital supply hub in the Gulf region, benefitting from open airspace and continued maritime traffic to its Red Sea ports.
To address the disruptions in Gulf coast ports, Saudi Arabia has initiated a new plan to enhance its transport networks by adding logistics routes and operational corridors to manage diverted cargo effectively.
Land-based alternatives, including road connections to the Mediterranean via Syria or Jordan, exist. However, these routes are congested, expensive, and insufficient to compensate for the disruption of traditional routes.
Fresh products, mainly imported from Asia and perishable, are among the first to feel the impact of the conflict.
Gulf states are not equally equipped to handle the situation. While Saudi Arabia has direct access to the Red Sea and the UAE claims to have several months of stock, Bahrain and Kuwait are already witnessing price hikes affecting consumers.
After an initial surge in supermarket shopping, Kuwait implemented price freezes on essential items and subsidized meat imports to mitigate the impact.
The private sector is also taking steps to lessen the blockade’s effects. The Lulu retail chain, with 280 supermarkets in the region, disclosed that it maintains reserve stocks of non-perishables and has arranged special flights to bring in fresh produce.
As of now, the additional cost is not being transferred to consumers. Despite elevated prices, Schneider noted a certain level of preparedness and price stability.
However, with the war showing no signs of ending soon, there is a real risk of price escalation on imported goods, particularly food items.
