NEW YORK (VINnews) — The US administration is expected to announce, possibly as early as this coming week, that several countries have agreed to form a new international coalition to secure merchant ships along the Strait of Hormuz, the maritime corridor off the coast of Iran.

According to a report in The Wall Street Journal, U.S. officials said that despite the principle agreement, the participating countries are still discussing a critical question among themselves: whether the naval escort operations should begin while the fighting in the region is still ongoing, or only after a ceasefire is reached.

The White House declined to comment on the expected announcement, which sources say could still change or be postponed depending on developments on the battlefield. Publicly, many countries have so far avoided committing to such a maritime escort mission while active combat continues, due to the significant security risks involved in placing naval vessels in a combat zone.

The urgent need to secure global maritime trade routes stems from the severe economic consequences of the war. According to Bloomberg, the war with Iran threatens to deal a serious blow to the largest economies in the Gulf, including Saudi Arabia, United Arab Emirates, and Qatar, if the conflict does not end soon.

The fighting, now in its third week, shows no signs of slowing, as Iran continues to attack neighboring countries across the region in response to the bombardment by the United States and Israel.

According to forecasts published by Farouk Soussa, a senior economist at Goldman Sachs, Qatar and Kuwait could suffer a sharp economic contraction of 14% in their GDP this year if the conflict continues at least until April and leads to a two-month shutdown of traffic through the Strait of Hormuz.

Such a downturn would be the worst economic decline for these countries since the early 1990s, when Iraq invaded Kuwait, triggering the Gulf War and causing major upheaval in global oil markets.

On the other hand, Saudi Arabia and the United Arab Emirates are expected to handle the crisis somewhat better thanks to their ability to redirect oil exports away from the threatened shipping route. Even so, they are still expected to see GDP declines of about 3% and 5% respectively, the most severe economic impact they have faced since the COVID‑19 pandemic in 2020.

Soussa noted: “For many Gulf economies, the war could have a more severe short-term impact than COVID.”

The situation illustrates how the war has created a nightmare scenario for Gulf states, which now face a double blow to both their oil sector and other parts of their economies.

“When the dust settles they will rebuild and recover,” Soussa concluded, “but it remains to be seen what scars the conflict will leave on investor confidence.”