The International Labour Organization (ILO) has warned that the Middle East crisis is increasingly impacting jobs, working conditions, and incomes worldwide. Rising energy costs, disrupted transport routes, supply chain pressures, weaker tourism, and migration constraints are already transmitting shocks across economies and labour markets. The report notes that the effects will likely persist, with their scale and duration depending on how the conflict evolves.
Under a scenario where oil prices rise 50% above early 2026 levels, global working hours could fall by 0.5% in 2026 and 1.1% in 2027, equivalent to 14 million and 38 million full‑time jobs. Real labour incomes are projected to decline by US$1.1 trillion in 2026 and US$3 trillion in 2027, while global unemployment would gradually increase. The ILO stresses that these impacts will be uneven, with Arab States and Asia‑Pacific identified as the most exposed regions due to their reliance on Gulf energy flows, trade routes, and labour migration.
In Arab States, working hours could decline by up to 10.2% under a severe escalation, more than double the scale of losses during the COVID‑19 pandemic. Around 40% of employment in the region is concentrated in high‑exposure sectors such as construction, manufacturing, transport, trade, and hospitality, with migrant workers expected to bear the brunt of adjustments. In Asia and the Pacific, working hours are projected to fall by 0.7% in 2026 and 1.5% in 2027, with real labour incomes declining by 1.5% and 4.3%. Tourism‑dependent economies are under particular strain.
The crisis is also disrupting migration and remittance flows, which are vital lifelines for many households in South and Southeast Asia. Labour deployments to Gulf countries have dropped sharply, repatriations are rising, and remittance flows are weakening, threatening consumption, poverty reduction, and local employment in countries of origin.
Policy responses so far have focused on short‑term stabilization measures such as subsidies, cash transfers, and business support, but the ILO warns that gaps remain, especially in fragile contexts. It calls for employment‑centred crisis responses that protect jobs, incomes, and working conditions, grounded in social dialogue and aligned with international labour standards.
The ILO will continue monitoring the labour market impacts of the crisis, stressing that without timely and targeted action, a temporary energy shock could become a long‑lasting setback for decent work globally.
