Iran War So Far: The Middle East is the biggest loser, the United States is

# Long Yue

Deutsche Bank has quantified the global wealth redistribution triggered by the Iran war from a balance-of-payments perspective. Its core conclusion: the Middle East has become the biggest loser as its energy exports are projected to plunge 75%, while the US gains only limited net benefits, with energy sector windfalls representing merely an internal wealth transfer. Russia, as the world’s second-largest oil exporter, emerges as the biggest winner — for a simple reason: it can keep selling, and at higher prices.

An energy crisis is redrawing the map of global wealth.

According to Zhuifeng Trading Desk, George Saravelos, Global Head of FX Research at Deutsche Bank, released a research report on March 30 that quantifies the impact of the Iran war on the external accounts of major economies from a balance-of-payments standpoint. The report draws three key conclusions: the Middle East is the biggest loser, US wealth is redistributed domestically rather than increased net, and Russia is the biggest winner.

The model is calibrated based on 2024 UNCTAD trade data, simulating a roughly 50% rise in energy prices from current levels (broadly in line with oil and gas prices at the time of publication), alongside a 75% drop in export volumes from the Gulf Cooperation Council (GCC).

## Middle East: Caught between price and volume collapse

One paradox of this energy crisis is that the world’s largest energy-exporting region has become its biggest victim.

The reason is straightforward: prices have surged, but cargoes cannot be shipped. The model projects GCC export volumes to slump 75%. Even with prices doubling, the three-quarters collapse in sales volume leads to a sharp contraction in net earnings.

Worse still, Middle Eastern countries have accumulated large dollar-denominated foreign exchange reserves and private savings. These funds are now being passively drawn down to cover revenue shortfalls — forex reserves are shrinking, and private savings are being liquidated.

The report notes this wealth is ultimately flowing toward other energy exporters. Middle Eastern wealth is being transferred abroad.

Europe and Asia also rank among the losers, joining the Middle East as the three regions suffering the largest income losses in the crisis.

## United States: Gains in energy, losses overall

As the world’s largest energy producer, the US should theoretically benefit from rising oil prices. Yet the report paints a more nuanced picture.

“From a national income perspective, the US does not benefit meaningfully,” the report states. “What is occurring is simply a large-scale transfer of wealth from consumers to energy producers.”

This represents domestic redistribution, not net external inflows. The US exports only a small share of its energy output, with most consumed domestically. Higher oil prices mean consumers pay more and producers earn more, but the improvement in the country’s overall external account is marginal.

This also resolves a market puzzle: why has the US dollar not strengthened sharply as historically typical amid an escalating energy shock?

The report’s logic: Middle Eastern countries are selling dollar reserves, and new earnings from energy exporters such as Russia are unlikely to fully flow back into US assets. If these dollar savings are reallocated to renminbi, gold, or other assets rather than recycled into US Treasuries, the dollar faces persistent structural downward pressure.

## Russia: The biggest winner, followed by smaller nations

Russia is the world’s second-largest oil exporter and faces no collapse in export volumes like the Middle East.

The logic is simple: it can keep supplying, and at higher prices. The report explicitly identifies Russia as the largest beneficiary of this energy crisis.

It is followed by a group of small and medium-sized energy exporters, including Norway, Australia, Canada, and Iran itself.

## Dollar under pressure, US Treasury market challenged

From a foreign exchange perspective, the report’s key warning centers on the US dollar and Treasury market.

Falling foreign exchange reserves exert direct pressure on the US Treasury market — the largest holders of US debt are precisely the countries now drawing down reserves.

Meanwhile, the destination of new wealth among energy exporters will shape the dollar’s medium-term trajectory. The report warns that if these funds do not return to the US but flow into renminbi or gold instead, the dollar will remain under persistent pressure.

The report acknowledges limitations: its analysis is static and does not account for demand destruction. A further escalation of the crisis would inevitably lead to actual declines in demand. Additionally, countries such as China hold large strategic petroleum reserves, which can buffer shocks via inventory drawdowns, while also potentially benefiting from accelerated growth in renewable energy.

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The above content is courtesy of Zhuifeng Trading Desk.

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