Iran strikes shake Gulf business hubs amid regional conflict

Iran’s retaliatory attacks across the Gulf have caused the region’s largest business disruption since the pandemic, forcing airport closures, halting port operations and rattling financial markets. The strikes came in response to a joint U.S.-Israeli assault on Iran and affected every major Gulf state. Three people were killed in the United Arab Emirates, and explosions were reported for a second consecutive day in Dubai and Abu Dhabi.

Major infrastructure suffered damage, including Dubai International Airport and Abu Dhabi’s Zayed International Airport, where one civilian died and 11 were injured, and a berth at Dubai’s Jebel Ali Port caught fire following aerial interception. Iran also targeted military installations, ports, and hotels across the Gulf.

Stock markets reacted sharply: Saudi Arabia’s benchmark index opened down over 4% and closed 2.2% lower, Oman fell 1.4%, and Egypt lost 2.5%. Kuwait suspended trading entirely. UAE markets, closed on Sundays, are set to open Monday. Analysts warn markets will remain volatile while military actions continue, with international institutional investors driving initial selling pressure.

The strikes come at a sensitive point in the Gulf’s business calendar, coinciding with Ramadan when corporate iftars and suhoors are key networking events. Emails indicate that gatherings hosted by companies including Emirates, Masdar, Mubadala, GEMS, and the Department of Government Enablement have been cancelled or postponed, adding an indirect but significant economic impact.

Vijay Valecha, chief investment officer at Century Financial, said higher oil prices benefit Gulf producers such as Saudi Arabia and Qatar by boosting revenues and liquidity, but trade, logistics, and tourism, particularly in the UAE, face increased pressure if regional sentiment worsens.

Dubai, long insulated from regional conflicts, has built its economy on luxury tourism, real estate, ports, airports, and financial services, making the current disruptions particularly unprecedented.