Ziad Daoud Explains How War with Iran Will Reshape the Gulf

In this episode of Odd Lots, hosts Tracy Alloway and Joe Weisenthal discuss the profound regional and global implications of the recent war between Iran and Israel, with special guest Ziad Dawood, chief emerging markets economist at Bloomberg Economics. Dawood, who has lived in the Gulf region for years, reflects on how the conflict—though anticipated since early 2026—still caught leaders off guard in its intensity and direct impact on Gulf infrastructure, particularly in the UAE and Qatar. He analyzes how the war has shattered the illusion of U.S. security guarantees, revealing the limits of American military deterrence despite advanced equipment, while also exposing deep fractures within Gulf alliances, especially between Saudi Arabia and the UAE. The episode explores how the closure of the Strait of Hormuz, energy weaponization, and the destruction of key facilities have disrupted global energy flows and forced Gulf states to reevaluate their economic diversification strategies, defense spending, and long-term capital outflows. Dawood emphasizes that the war has not only damaged physical infrastructure but also reshaped geopolitical thinking, with lasting effects on architecture, urban planning, and regional stability—echoing historical precedents like Kuwait’s post-1990 decline. The discussion also highlights how the Gulf’s economic model—built on oil wealth, capital exports, and a diversified economy—faces a critical inflection point. With oil revenues potentially rising for Saudi Arabia due to alternative export routes, other Gulf states like Qatar face existential challenges in securing alternative energy export paths. Meanwhile, the region’s attractiveness as a global hub for finance, tech, and lifestyle remains resilient, though the war may slow inbound migration. Dawood warns that reduced petrodollar flows could have ripple effects on global financial markets, including U.S. treasuries, while increasing defense spending and infrastructure rebuilding will strain capital availability. The episode concludes with a sobering reflection on how war reshapes societies in unexpected ways—altering everything from city skylines to long-term fiscal policy—leaving the Gulf region fundamentally transformed.