Conflict with Iran disrupts shipping lanes and destabilizes stock markets, placing economic pressure on Gulf aviation hubs and energy exporters. While oil prices climbed above $100 per barrel, rising logistics costs and security risks are eroding the net income of major producers.
Investors withdraw billions from Persian Gulf markets
Foreign investors withdrew approximately $2.3 billion from the stock markets of the Arab states of the Persian Gulf during the third quarter of 2026, according to ABNA English.
High oil prices have failed to prevent a decline in the attractiveness of regional shares.
Saudi Arabia saw the largest portion of this capital exit. Roughly $1.5 billion left its market, representing more than half of the total regional outflow.
Other significant departures include approximately $400 million from the Dubai market and $250 million from the Kuwait market, ABNA English reports.
Rising logistical costs are squeezing the net income of oil exporters, according to the International Energy Agency. The rental cost of tankers has increased to $1.2 million per day, ABNA English notes.
Boeing delivery delays and war threaten aviation hub capacity
The conflict has directly impacted flight schedules at major regional hubs.
Riyadh experienced particularly severe disruptions.
Amandeep Kaur Ahuja, a MENA geopolitical risk consultant, told EnterpriseAM, There is a real possibility that airports expand faster than the fleet is added,
She noted that Boeing’s slow delivery of aircraft is compounding the issues caused by the war.
This mismatch threatens the returns on massive infrastructure investments. These include Riyadh’s King Salman International Airport and the Dubai Al Maktoum International expansion.
Financial stability for carriers is also under strain.
Iran’s attacks on Gulf energy facilities and in the Strait of Hormuz have resulted in unprecedented disruption to Gulf energy exports and global energy markets. The upcoming IISS Strategic Dossier examines the multifaceted implications of the 2026 United States–Israel war with… pic.twitter.com/JM7Pz9cJot
Oil-dependent economies face contraction
The International Monetary Fund (IMF) expects economic output across the Gulf Cooperation Council to fall 5 percent this year, according to National Security Journal.
Saudi Arabia’s economy shrank 3.8 percent year over year in the third quarter. This decline was driven by a 20.4 percent collapse in oil activity, National Security Journal reports.
The economy previously saw a 4.8 percent contraction in the second quarter. During that period, oil activity fell roughly 25 percent, National Security Journal notes.
Regional powers build bypass infrastructure
Regional powers are investing in alternative routes to mitigate risks in the Strait of Hormuz.
Aramco ramped up Saudi Arabia’s East-West pipeline to 7 million barrels per day in eight days. This pipeline allows crude to bypass the Strait for the Red Sea to maintain roughly 60 percent of prewar exports, National Security Journal reports.
The UAE’s Habshan-Fujairah line is operating at full capacity. It moves between 1.5 and 1.8 million barrels a day to the Gulf of Oman, National Security Journal notes.
Abu Dhabi’s second West-East line is nearly 50 percent complete. This project is intended to double bypass capacity by 2027.
Jihad Azour, the IMF’s Director for the Middle East and Central Asia Department, noted that while the region has adjusted to these shocks, the risks will grow if disruptions persist.
The IMF is forecasting a sharp economic rebound in 2027, provided the conflict abates, National Security Journal reports.