As tensions in the Middle East continue to escalate due to the war between the United States/Israel, and Iran, there is a new route through which the conflict could affect families in developing economies through remittances.
The shocks of the conflict are travelling far beyond oil markets and geopolitics. The impact could directly reach the kitchens, school fees, and daily survival of millions of households across developing economies.
This new dimension was brought to light by C-NERGY’s latest thought leadership series titled “From Hormuz to Accra: The US-Israel-Iran Conflict and its Ripple Effects on Global Supply Chains and Ghana’s Economy.”
Remittances are the steady flow of money sent home by migrant workers. For many developing countries, these inflows are not just supplementary income; they are the backbone of household survival, often exceeding foreign direct investment and international aid combined.
CNERGY reveals that the Middle East, particularly the Gulf, plays an outsized role in this system. It accounts for roughly 15–20% of global remittance flows to developing nations. Millions of migrant workers, such as construction workers, drivers, cleaners, and nurses, earn a living there and send a portion of their wages back home every month.
“Remittances represent a less visible but highly significant channel. The Middle East is a major source of remittance flows to developing economies, accounting for roughly 15–20% of total inflows,” the think tank noted.
It continued, “For many countries, remittances exceed foreign direct investment and development assistance combined. A large share of the workforce in Gulf economies consists of foreign nationals who support families back home.”
With the prolonged conflict, the crisis is beginning to threaten this lifeline. Disruptions to oil production, logistics, and broader economic activity are already raising concerns about job security and income stability for foreign workers in the Middle East.
As companies cut costs or scale down operations, migrant workers are often among the first to feel the impact, through reduced hours, delayed salaries, or outright job losses. This will mean a lot for families back home who heavily depend on the remittances for their daily survival.
A missed remittance payment can mean unpaid school fees, empty food cupboards, or an inability to cover basic healthcare. In many households, remittances fund everything from rent to small business operations. When that flow stops, there is often no safety net.
C-NERGY says, “As the conflict disrupts economic activity in the region, including oil production and logistics, there is a growing risk of reduced income and employment for migrant workers.”
Beyond households, the broader economy also feels the strain. Remittances are a critical source of foreign exchange for many developing countries, helping to stabilize currencies and support imports. A sustained drop could weaken already fragile economies, intensify currency pressures, and worsen inflation, making everyday goods even more expensive.
“For countries reliant on these inflows, any sustained disruption could remove a critical source of household income and foreign exchange, compounding existing economic pressures,” the think tank emphasized.
The danger lies not just in a temporary disruption, but in a prolonged conflict that steadily erodes earning opportunities in the Gulf. If businesses slow down and migrant employment shrinks, the ripple effects could deepen poverty levels across multiple countries simultaneously.
What makes this crisis particularly critical is its invisibility. Unlike oil price spikes or shipping disruptions, falling remittances do not dominate headlines. Yet, their impact is felt quietly, in households forced to cut meals, children pulled out of school, and communities pushed further into economic hardship.
As the Middle East conflict unfolds, its most profound consequences may not be measured in barrels of oil or military outcomes, but in the deteriorating conditions of living of millions who depend on money sent from abroad to survive.
