Gulf's Economic Ties with East Asia Strengthen Amid Global Shift

The Gulf region's economic ties with East Asia have grown significantly in recent years, driven by trade and investment partnerships.

Historically, Gulf ports have relied on maritime trade across the Indian Ocean, exporting natural pearls and dates to India, China, and Southeast Asia. As the global economy changed, the centre of gravity in Gulf oil trade shifted towards Asia, with Asian economies becoming the main destination for Gulf oil exports.

Today, around 80% of seaborne crude oil exports from the Gulf states and OPEC go to Asia, while the share going to Europe and North America has declined. Asian countries, including China, India, Japan, and South Korea, are also major sources of Gulf imports, particularly consumer goods, foodstuffs, construction materials, cars, machinery, and electrical equipment.

The Gulf states' economic ties with East Asia have taken on a strategic character, with Gulf sovereign wealth funds increasing their investment allocations to China, India, Japan, and Southeast Asia. Bilateral trade between China and the GCC states reached $257bn in 2024, exceeding the volume of GCC trade with Western economies.

The growing importance of economic relations between the region's states and those of East Asia has been underscored by the recent war in the Gulf, which highlighted the vulnerability of global supply chains. The Gulf states' demand for varied and sophisticated Asian products is rising as development programmes continue and mega-projects move ahead.