Iran War Hits UAE Financial Markets, $120 Billion Wiped Out
The United Arab Emirates’ financial markets have been among the hardest hit globally amid the ongoing Iran conflict with the United States and Israel.
Since the war began on February 28, Dubai and Abu Dhabi’s stock markets have lost roughly $120 billion in value. Dubai’s benchmark DFM General Index has fallen about 16 percent, shedding $45 billion in market capitalization, while the larger ADX General Index has dropped roughly 9 percent, representing a $75 billion loss.
Regional Market Effects
- Neighboring Gulf markets saw varied impacts: Qatar and Bahrain dropped 4% and 7%, respectively, while Saudi Arabia and Oman recorded gains.
- Wall Street’s S&P 500 has fallen approximately 7% during the same period amid uncertainty about the duration and objectives of the war.
Impact on Travel and Tourism
While the UAE is less exposed to global energy shocks from the Strait of Hormuz closure than other Gulf states, the war has hit its position as a regional travel hub. Tens of thousands of flights have been canceled, particularly through Dubai International Airport, the world’s busiest for international passengers.
Tourism and travel contributed about $70 billion to the UAE economy last year, roughly 13% of GDP, highlighting the economic cost of the conflict.
Expert Analysis
Haytham Aoun, assistant professor of finance at the American University in Dubai, described the losses as a “temporary shock” to investor sentiment rather than structural damage.
“International financial centres are judged not only by market performance during crises but also by the quality of regulation, liquidity management, institutional resilience, and operational continuity,” Aoun said.
Burdin Hickok, a professor at New York University, added that Dubai and Abu Dhabi markets could expect a “serious rebound” once the war is resolved, emphasizing that the fundamental attractiveness of the markets remains intact.
Long-Term Outlook
The UAE has invested heavily in financial services as part of economic diversification, with stock market values surpassing $1 trillion in 2024. Dubai ranks seventh in the latest Global Financial Centres Index, its highest ever, and the country’s 10-year plan aims to position Dubai among the world’s top four financial centres by 2033.
