The UAE’s strong reputation as a global business and financial hub has faced new challenges due to the rising geopolitical tensions. Iran’s air strikes, following the US–Israel bombing, hit across the Gulf region and affected the UAE’s key sectors. The attacks caused widespread insecurity in the region, especially in Dubai, causing a temporary setback to its reputation as one of the world’s most reliable business hubs.
Markets Shut Amid Tensions
The UAE decided to close its main stock exchanges due to the rising regional instability. According to the UAE Capital Markets Authority, the Abu Dhabi Securities Exchange and Dubai Financial Market would remain shut on March 2 and March 3. The Authority said the decision was taken as part of its supervisory and regulatory role in order to manage the financial markets. They also added that the Authority will continue to monitor developments in the region and assess the situation on an ongoing basis, taking any further measures as necessary. The last time the stock exchanges were closed was in 2022 during the mourning period following the death of President His Highness Sheikh Khalifa bin Zayed Al Nahyan.
Broader Economic and Sectoral Risks
The tensions could also lead to increased oil prices due to disruptions in the narrow 33-kilometre-wide Strait of Hormuz between Iran and Oman. This, in turn, will impact the trade and logistics sectors, both of which play a crucial role in the UAE’s economy. In addition, the higher transport cost could raise the price of imported food, on which the UAE heavily relies on. While precautionary measures are in place, a prolonged conflict can have major impacts across the country. Another key area that stands to be affected is tourism. Widely recognised as one of the safest places in the world, the recent strikes across the UAE have shaken many. The crisis might harm tourism, which is especially worrying for Dubai due to its heavy dependence on tourists. The temporary closure of airspace has also raised concerns. Dubai International Airport, which handled a record 95.2 million passengers last year, is one of the world’s busiest airports. Even small disruptions to flights can weaken Dubai’s position as a major global aviation hub.
Signs of Stability Amid Uncertainty
Despite the ongoing tensions, the Dubai Media Office has confirmed that the private sector continues to work normally, and that most commercial activities are running without any disruption. Abu Dhabi officials also reported that economic activity remains strong and smooth. UAE Minister of Economy and Tourism, Abdulla Bin Touq Al Marri, stated in a media briefing that precautionary measures have been implemented to ensure economic stability. Markets are also monitored to prevent unjustified price hikes, hoarding, fraud, or unfair trade practices across all goods and services. He added that the authorities are monitoring stock levels daily in coordination with suppliers to ensure the availability of goods.
Various business owners, including Al Habtoor Group chairman Khalaf Al Habtoor and Telegram owner Pavel Durov also expressed their faith in the country and said they are confident that the UAE will bounce back stronger. Sending a message of normalcy in the country, President His Highness Sheikh Mohamed bin Zayed Al Nahyan and Dubai Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum were seen taking a walk at Dubai Mall on Monday, interacting with shoppers.
