New Delhi, July 31 -- RIYADH - Saudi Arabia's economy contracted 4.8 percent in the second quarter of 2026, its steepest annual decline since the COVID-19 pandemic, as the near-shutdown of shipping through the Strait of Hormuz severed the kingdom's crude export arteries and exposed the limits of a decade-long push to build a post-oil economy.

The General Authority for Statistics released flash estimates Wednesday showing gross domestic product fell 4.9 percent on a seasonally adjusted basis from the first quarter. The same indicator had expanded 3 percent year-on-year only three months earlier.

The oil sector bore virtually the entire weight of the disruption. Petroleum and natural gas activities contracted 24.7 percent from a year earl...