Businesses hit as Iran strikes trigger regional shutdowns
Iran’s retaliatory strikes across the Gulf yesterday triggered the most widespread business disruption in the region since the pandemic, forcing airport closures, halting port operations and sending shockwaves through financial
Iran’s retaliatory strikes across the Gulf yesterday triggered the most widespread business disruption in the region since the pandemic, forcing airport closures, halting port operations and sending shockwaves through financial markets.
The attacks, launched in response to a joint U.S.-Israeli assault on Iran, landed across every major state in the Gulf, a region that has spent decades building its reputation as one of the world’s most reliable business hubs. Three people were killed by the attacks in the United Arab Emirates and loud bangs were heard for a second day in Dubai and Abu Dhabi yesterday.
The strikes marked an unprecedented escalation for Dubai, a city whose modern identity was built on being insulated from the region’s conflicts. From humble beginnings as a small fishing village, the emirate of Dubai used modest oil revenues to build ports, airports and trade centres before pivoting in the 1990s to luxury tourism, real estate and financial services.
Advertisement
300x250
“Regionally, the impact across (Gulf) economies is mixed,” said Vijay Valecha, chief investment officer at Century Financial.
“Elevated oil prices provide a fiscal cushion for producers such as Saudi Arabia and Qatar, strengthening revenues and liquidity. However, trade, logistics and tourism, particularly in the UAE, would face pressure if shipping risks rise or regional sentiment weakens.”
Gulf stock markets fell sharply when trading opened yesterday, with Saudi Arabia’s benchmark index dropping more than 4% at the open and closing down 2.2%. Oman closed down 1.4% and Egypt lost 2.5%, both paring earlier losses. Kuwait’s exchange took the unusual step of suspending trading until further notice. UAE markets, shut on Sundays, are due to open on Monday.
“Markets will continue to be fragile and volatile as long as the military actions are active,” said Mohammed Ali Yasin, chief executive of Ghaf Benefits, a Lunate company in Abu Dhabi. “Usually in such events, the international institutional investors are the ones that put the selling pressures initially... while local ones try and soften the drops by picking the leading stocks.”
Iran’s strikes targeted airports, military installations, ports and hotels across the Gulf. Dubai International Airport and Abu Dhabi’s Zayed International Airport both sustained damage, with one civilian killed and 11 injured across the two sites. A berth at Dubai’s Jebel Ali Port also caught fire following an aerial interception.
Advertisement
300x250
Read Also: Tinubu, First Lady hail Adeboye at 84, describe him as ‘one of Nigeria’s greatest gifts’
Some of the UAE’s biggest companies include Dubai developer Emaar Properties and retailer Majid Al Futtaim. The country has also become a magnet for global hedge funds and major banks seeking proximity to vast pools of sovereign wealth managed by ADIA and Mubadala.
The disruption has landed at a particularly sensitive moment in the Gulf’s business calendar. The attacks fell during the Islamic holy month of Ramadan, when corporate iftars and suhoors - the communal meals that break and begin the daily fast - are among the region’s most important networking events.
Emails seen by Reuters show that gatherings hosted by Dubai carrier Emirates, Abu Dhabi energy company Masdar, Mubadala and education firm GEMS, along with the Department of Government Enablement, have been cancelled or postponed.
For a region where relationships underpin business dealings, the loss of Ramadan’s networking season adds a less visible but significant cost to the disruption already unfolding.
