Gulf states are sorted by who can keep food supplies and prices steady while shipping through the strait is under fire, an analyst says

What does it cost a Gulf state to keep its shelves stocked while shipping through the strait is under fire? The answer varies by state: food-import dependency runs from 72% in Oman to 89% in the UAE, according to the FAO’s April GCC Food and Agriculture Policy Flash, and most of those imports pass through Hormuz. The divide is between states that can keep supplies and prices steady during a crisis and states that face “higher costs, greater disruption, and more difficult political choices,” Neil Quilliam, associate fellow at Chatham House’s MENA Program, tells EnterpriseAM.

Reliance and prices

One state has a way around the strait: Saudi Arabia’s Red Sea ports mean 59% of its food imports pass through the strait, against 100% for the other five states, according to the FAO. The Red Sea coast gives it the alternative, and its western ports now carry its state wheat: it sent all 661k tons of its latest state wheat purchase to Red Sea ports, and its food security authority has tendered 535k tons for delivery to Jeddah, Yanbu, and Jazan in November and December. That route has a limit of its own. The Houthis declared a naval blockade on Saudi Arabia at Bab Al Mandab in July, so the Red Sea is a way around Hormuz and not a riskfree one.

Going around the strait costs more: Unlike oil and gas exports, food imports can reach the Gulf by land and air, Justin Alexander, Gulf analyst at GlobalSource Partners and director of Khalij Economics, tells us. The cost is showing up in inflation “even with new and existing subsidies in many countries,” he adds, partly because global food prices are up on fertilizer and fuel costs, “combined with logistical constraints.” It is “most visible for Qatar, but even Oman, with its main ports outside Hormuz, has been impacted.”

Prices show who is paying: Food inflation was 12.7% in Qatar and 5.6% in Kuwait in June, and 7.8% in Dubai, 7.3% in Oman, 7.2% in Bahrain, and 1.5% in Saudi Arabia in July, according to Khaliji Economics. Food made up 72% of Qatar’s overall inflation, half of Oman’s, and 46% of Kuwait’s, against 18% in Saudi Arabia.

Stocks and storage

The six states’ cushions differ, though none is likely to run out of food. Saudi Arabia’s Red Sea coast and logistics give it an edge, and the UAE has built significant storage and re-export capacity, Quilliam tells us. Saudi Arabia’s own storage stands at 3.5 mn tons, enough for at least four to six months.

The UAE stores grain on the far side of the strait: It has 300k tons of grain storage at Fujairah, on the Gulf of Oman, in a terminal run by Etihad Mills, a joint venture of Al Dahra and Loulis Mills. Its strategic stock of basic goods covers four to six months of market needs, the Economy and Tourism Ministry said. Federal Law No. 3 of 2020 requires suppliers to hold strategic food stock in domestic warehouses, tracked electronically by the Economy Ministry.

Qatar holds the deepest stockpile in the Gulf: Its interior minister said in March that food reserves cover 18 months. The Hamad Port food security facilities and warehouses provide 300k tons of capacity, with the project 98% complete in June. In April, the commerce minister said those stocks “remain untouched,” with Qatar Airways flying in about 2k tons of fruit and vegetables and 1.2k tons of red meat instead.

Oman is paying to keep its import bill down: Since 1 July, the state has covered 50% of fuel and ins. costs on food shipments from India for up to six months. Oman Flour Mills has 160k tons of wheat storage at each of its three sites, all outside the strait, with national capacity planned to reach about 650k tons within two years. No months-of-cover figure has been published for Oman’s reserves, and strategic grain reserves “remained at safe levels” in May, the chair of the Oman Chamber of Commerce’s food security committee said.

Kuwait and Bahrain each aim for six months: Kuwait aims to keep at least six months of basic food stock, the Commerce and Industry Ministry said in September, and it banned all food exports by land, sea, and air in March. Bahrain’s strategic stocks cover local needs for at least six months, the Commerce and Industry Ministry said, according to Derasat, with no tonnage given.

The detours

Bahrain and Kuwait are leaning on Saudi land routes: Thousands of trucks have carried goods to the two states through Saudi Arabia. In March, Saudi Arabia’s port authority linked Dammam to Bahrain’s Khalifa Bin Salman Port through a 3k TEU shuttle, and Jazeera Airways opened a cargo corridor into Kuwait via Saudi Arabia’s Qaisumah airport.

The longer bypasses are open, and small: A Ro-Ro line from Trieste to Damietta, with cargo trucked to Safaga and shipped on to the Gulf, moved some 5.3k tons over 12 voyages between March and early June. That’s about a third of what one of Fujairah’s 20 silos holds, on average, by our math. The UAE took 42.8% of the cargo and Saudi Arabia 947 tons.

Bahrain has the least room to maneuver: Its gap is “mainly a scale and capacity issue,” Quilliam tells us. It “faces the same vulnerabilities but operates with tighter fiscal constraints and more limited state capacity” than the UAE and Saudi Arabia, which have larger financial resources, larger bureaucracies, and dedicated food-security institutions. Political will matters, he adds, but he “would not characterize Bahrain’s slower progress as a lack of commitment.” Food security competes with other fiscal priorities: “The UAE has been able to treat food security as a strategic national project. Not every Gulf state has that luxury.” Alexander tells us he doesn’t “see any sign of trade-offs between food security and defense spending, which is far higher anyway.”

Built for a shorter crisis

Two decades of Gulf food-security planning assumed disruptions would be short and isolated. They would be “temporary and isolated,” Quilliam tells us, and recent crises have shown that multiple shocks can hit at once. The challenge now is keeping alternative routes, storage, logistics, and procurement channels available “even during prolonged crises.”

Most strategies assume one corridor fails: “There is planning, but there is no perfect solution,” Quilliam tells us. The Houthis declared a naval blockade on Saudi Arabia at Bab Al Mandab in July, and a sustained closure of both chokepoints would put “considerable pressure on regional supply chains,” he adds. The problem “would not necessarily be food availability globally, but getting food into the region efficiently and affordably.”

Why it matters: The longer shipping through the strait stays under threat, the more Gulf food security comes down to who can pay for alternatives: air freight, subsidized shipping, and Saudi trucks. Being able to hold both supplies and prices stable “is increasingly how food security resilience should be measured in the Gulf,” Quilliam tells us.

What’s next: Alexander expects “more policy signals indicating planning, investing in warehousing, domestic production and supply route diversification.” Food security has been a GCC concern “since at least the 2007 price spike,” he tells us, and it is “definitely a factor in recovery planning.”