The Gulf’s role as a central connector between Asia and Pakistan is set to endure, even as countries rethink supply chains in response to rising geopolitical risk.
Mike Pyle, senior managing director at BlackRock, said “the Gulf is really the linchpin” of a stretch linking the region with South Asia and South-East Asia. This corridor is among the most dynamic in the global economy, he said on Tuesday at a panel focused on Middle East economies during the International Monetary Fund and World Bank Spring Meetings.
“There is likely to be no more dynamic part of the global economy than in that stretch of the world that connects those three regions,” he said. This reflects a deepening integration across trade, energy and investment.
That dynamism is increasingly reflected in trade flows that extend beyond hydrocarbons. Trade between the Gulf and Asia has grown sharply over the past decade to about $516 billion annually, according Asia House, driven by both energy demand and rising non-oil trade.
“Trade between the Gulf and Asia has surged to record levels, outpacing trade with western economies and underlining the region’s accelerating ‘pivot to Asia’,” the London-based think tank said in November.
Non-oil trade
Asia now dominates the Gulf’s external economic relationships. According to the GCC Statistical Centre, China, India and Japan are the bloc’s three largest trading partners, together accounting for about 36 per cent of total Gulf trade.
India has emerged as a key South Asian partner, with bilateral trade with the Gulf reaching about $178.6 billion in 2024-2025, according to India's Ministry of Commerce and Industry.
Trade between the Gulf and the Association of South-East Asian Nations reached about $130.7 billion in 2023, the Asean Secretariat said.
These ties are deeply embedded, according to the panellists. IMF deputy managing director Bo Li said the Iran conflict could reshape economic relationships but argued that strong links between the Gulf and Asia would endure.
“Let me start by saying that we see a structural comparative parity between the Gulf and Asia,” he said. Refinery systems in China, India, Japan and South Korea “are mostly configured to process … crude from the Gulf” and “it's not easy to adjust”, he added.
Long-term LNG agreements have “been kind of anchoring trade flow between the two regions over multiple number of years”, which have been severely disrupted amid the current conflict, Mr Li said.
At the same time, both sides are adapting. Mr Li said countries will “diversify suppliers, diversify shipping routes, diversify energy composition”, and expand strategic reserves as part of risk mitigation.
“But this does not mean the interdependence between the two regions will decline,” he said.
Mr Pyle acknowledged that “economic headwinds, the economic pain in the short term, the GCC … is real”, particularly where constraints affect energy flows.
However, he said the response will be investment-led in the medium term. “You’re going to see a lot of investment from these economies … diversifying their ability to get energy, to build markets, investments in resilience … and other forms of infrastructure,” he said.
Structural constraints reinforce the Gulf’s continued importance, particularly in gas markets. International Energy Agency chief energy economist Tim Gould said “we do not have anything similar for gas,” highlighting the lack of alternative routes for LNG flows.
Evolving partners
Beyond hydrocarbons, the relationship is broadening. Mr Li said economic ties are “much more complex than seeing the oil gas,” pointing to growing links in fertilisers, logistics and infrastructure investment.
Mr Pyle added that Gulf economies have been “rapidly diversifying themselves from their foundation in energy to financial services to tourism to technology and artificial intelligence”.
Non-oil trade is playing a growing role in that shift. UAE–China non-oil trade reached about $90 billion in 2024 and continued to grow in 2025, with first-half trade rising by more than 15 per cent year on year, according to official UAE data.
Across the region, diversification is accelerating, with Saudi non-oil exports rising more than 20 per cent year on year, according to official data from the kingdom's General Authority for Statistics, which also show China and India among its largest trading partners.
The result is a relationship defined by continuity as much as change. While trade routes may evolve, the Gulf’s role as a connector between Asia and Pakistan is driven by both energy and non-oil trade remains firmly intact, in a view shared by the panellists.
