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Gulf businesses reel after Iran strike triggers regional closures
Iran's retaliatory attacks across the Gulf have caused the most widespread disruption of business in the region since the pandemic. They forced airport closures, stopped port operations, and sent shockwaves to financial markets. Three people were killed in the United Arab Emirates and loud bangs could be heard in Dubai and Abu Dhabi on Sunday. The attacks came in response to the joint U.S./Israeli attack against Iran. This region has built its reputation over decades as a reliable business hub. The attacks in the United Arab Emirates killed three people and there were loud bangs heard in Dubai and Abu Dhabi for the second day on Sunday. The strikes were a dramatic increase for Dubai. Its modern identity is built on its isolation from conflicts in the region. The emirate, which began as a fishing village in the 1970s, used oil revenues to build airports, ports and trade centers before pivoting to luxury tourism, financial services and real estate by the 1990s. Vijay Valecha is the chief investment officer of Century Financial. He said that regionally, there are mixed effects across Gulf economies. The increased oil price provides a fiscal cushion to producers like Saudi Arabia and Qatar. This increases revenues and liquidity. Trade, logistics, and tourism in the UAE would be affected if regional sentiment or shipping risks weakened. STOCK MARS FALL Gulf stock exchanges fell dramatically when trading began on Sunday. Saudi Arabia's index dropped more than 4% to open, and closed down by?2.2%. Oman lost 1.4%, and Egypt 2.5%. Both of these losses were a reduction from earlier losses. Kuwait's exchange has taken the unusual step to suspend trading until further notice. The UAE's markets will reopen on Monday after a weekend shutdown. Mohammed Ali Yasin is the chief executive officer of Ghaf Benefits in Abu Dhabi. He said that markets will remain 'fragile and volatile' as long as military operations are ongoing. In such situations, international institutional investors tend to put initial pressure on the markets by selling stocks. Local investors will then try and mitigate the drop in stock prices by selecting the top performing stocks. Iran's attacks targeted hotels, ports, and military installations across the Gulf. Both Abu Dhabi's Zayed International Airport and Dubai International Airport sustained damage. One civilian was killed and eleven others were injured. An aerial intercept also caused a fire at a berth in Dubai's Jebel-Ali Port. Emaar Properties, a Dubai-based developer and Majid Al Futtaim, a retailer in the UAE are two of its biggest companies. ADIA and Mubadala, which manage vast sovereign wealth pools, have attracted global hedge funds and major international banks. RAMADAN NETWORKING This disruption occurred at a time when the Gulf business calendar was particularly sensitive. The attacks occurred during Ramadan when corporate iftars, and suhoors (the communal meals that break the fast and start the day) are some of the most important networking events in the region. According to emails seen by, gatherings organized?by Dubai airline Emirates, Abu Dhabi energy firm Masdar, Mubadala, education firm GEMS and the Department of Government Enablement have been cancelled or delayed. The loss of Ramadan networking season is a significant but less visible cost for a region that relies on relationships to conduct business. The Fairmont The Palm Hotel was set ablaze, and the Burj al?Arab was damaged. The Fairmont was recently sold to Kuwait's Arzan Investment Management for $325million - an agreement seen as a sign of surging Gulf tourism demand. This damage is one of the more stark symbols of what the strikes have done to the region's booming economy. Following the strikes, the United States, UK, and European Union updated their travel advisories to the Gulf, urging citizens not to travel unless it is absolutely necessary. On Sunday, major transit airports in the region, such as Dubai, Abu Dhabi, and Doha, Qatar, were closed or severely restricted. In the near future, staff at major international firms are expected to adhere to local guidelines on working from home. The UAE federal labor authority has advised companies to implement remote work arrangements until March 3. They have also urged them to keep employees away from open areas except for vital roles that require physical attendance.
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Maersk suspends its sailings through the Suez Canal and Bab el-Mandeb Strait due to escalating conflicts
Maersk, a Danish shipping company, announced on Sunday that it would halt sailings 'through the Bab el-Mandeb Strait & the Suez Canal & reroute the ships around Cape of Good Hope after U.S. & Israeli strikes against Iran plunged this region into chaos. Maersk issued a statement saying that due to the deteriorating situation in the Middle East following the escalating conflict, "we have decided...to temporarily halt future Trans-Suez crossings through the Bab El-Mandeb strait." Maersk announced on Friday that it would temporarily reroute certain sailings away from the Suez Canal and around the Cape of Good Hope. It cited unforeseen restrictions in the Red Sea Region. Last month, the container shipping group announced that some services would be gradually returned to the Suez Route. This was seen as an important step in ending the two-year global trade disruptions caused by Houthi rebel attacks on ships at the Red Sea. The company stated that it would "continue to closely monitor the situation and take all necessary actions". Maersk commented on the Middle East India to Mediterranean and Middle East India to East Coast U.S. services. Maersk has also announced that it will suspend all vessel crossings through the Strait of Hormuz, until further notice. It added that services to ports in the Arabian Gulf could experience delays, rerouting or schedule adjustments. ? The shipping giant said it would continue to accept cargo bound for the Middle East. (Reporting from Kanjyik in Barcelona and Louise Rasmussen, in Copenhagen; editing by Emelia Sithole Matarise and Ros Russel)
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Dubai gold flow curtailed as flights are halted because of US-Israeli attacks on Iran
Three metals industry sources say that physical gold flows to and from Dubai's "bullion trading center" will be drastically curtailed in the coming days, as airlines cancel flights because of U.S. and Israeli attacks on Iran, and Tehran's response. Dubai's trading hub is a major supplier of gold to Switzerland, Hong Kong, and India, which are major consumers. Due to its high value and weight, gold is transported by air due to insurance and security concerns. One of the sources stated that "it looks like most, if not all airlines have cancelled flights. So there won't be much?gold movement for a few days." Sources said that the impact of the disruption on global supply would depend on its duration. The sources declined to name themselves because they are not authorized to speak to journalists. Gold prices rose by?1.7% to $5,277 an ounce on Friday, the highest level since January 30. Many analysts expect safe-haven flows into gold bullion when the market opens Monday. Gold's record high was $5594.82 in January. Another source stated that the market on Monday will be dominated by the financial flows from markets in Shanghai, London, and New York. A precious metals trader stated that "the?major places - China and India, New York City, London, and Zurich are still fine."
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Data shows that hundreds of ships anchor in the Gulf of Middle East
Shipping data revealed that at least 150 'tankers', including LNG and crude vessels, were anchored in the open Gulf waters beyond the Strait of Hormuz, and that dozens more were anchored on the other side. This was after the U.S.-Israeli strikes on Iran shook the region. According to estimates based on data collected by the MarineTraffic platform, the tankers were located in open water off the coasts major Gulf oil producing countries, such as Iraq and Saudi Arabia. They also included the liquefied gas giant Qatar. MarineTraffic data shows that many of the vessels are anchored in the exclusive economic zones (EEZs) of Gulf oil producers, such as Kuwait and the United Arab Emirates. The?EEZ stretches up to 24 nautical miles beyond the local territorial limits of 12 nautical miles. The data revealed that dozens of cargo ships clustered separately across different EEZs. Hormuz is the route through which 20% of all oil produced in the world, including that from Saudi Arabia, United Arab Emirates (UAE), Iraq, Kuwait, and Iran, as well as large quantities of LNG from Qatar, travels. According to data, there were also at least 100 other?tankers anchored along the UAE coast and Omani anchorage points, as well as dozens more?cargo vessels. Trading sources reported on Saturday that several tanker owners, major oil companies and trading houses had suspended crude oil, fuel, and LNG shipments through the Strait of Hormuz following the attacks. Tehran also claimed to have closed the navigation. The?U.S. has stated that "at this time, no such formal suspension" (of the traffic through the Strait) was communicated to the international community by recognized maritime authorities. In a Saturday note, the Joint Maritime Information Center led by the Navy?stated that no such formal suspension (of traffic through strait) has been communicated internationally. Mariners can expect an increased naval presence and enhanced force protection postures. They should also be prepared for congestion in areas near anchorages outside the Strait as well as volatility on the insurance market. (Reporting and editing by David Goodman, Ros Russell and Jonathan Saul)
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MIDEAST STOCKS - Gulf stocks fall, Kuwait suspends trade as Iran responds US, Israeli attacks
Boursa Kuwait halted trading on Sunday after U.S.-Israeli strikes on Iran led to retaliatory attacks on U.S.-targeted cities in the Gulf, fueling fears of a prolonged period of regional instability. On Sunday, witnesses reported explosions over Doha and in the Dubai region as Iran retaliated for the U.S./Israeli attacks that killed Iranian leader Ayatollah Khamenei. This was one of the largest disruptions to aviation worldwide in recent years. The trading in Middle East markets can be a good indicator of the impact investors will have on their assets, from gold to safe-haven currencies. Barclays analysts raised their Brent crude estimate to $100 per barrel from $80 a few days ago. Boursa Kuwait has suspended all trade in the country until further notice, citing "exceptional circumstances". Saudi Arabia's largest stock exchange, the benchmark index, pared its losses to trade just 2% lower than the 4.6% decline it had earlier in the session. The Saudi National Bank, Al?Rajhi Bank and flynas budget airline all saw declines of between 2.8% and 5.8%. Saudi Aramco, the oil giant, rose 2.6% on expectations of higher oil prices. Saudi Arabia said on Saturday that Iran attacked Riyadh, the eastern part of its country and other areas. The GCC markets will likely remain under pressure, as investors factor in a potentially higher and prolonged geopolitical premium after the recent escalation of the situation in the region," Tahir Abbas said. He is the head of research for Ubhar Capital in Oman. "While higher oil prices are a fiscal cushion in the short-term for the regional governments, the greater concern is the possibility of shipping routes being affected, especially through the Strait of Hormuz. This would have wider?implications on energy flows and trade." Gulf stock markets are facing increased volatility and correction risk as geopolitical conflict?drives a 'risk-off' mood, putting pressure on?prices? and expectations?, according to XTB MENA Senior Analyst Hani Abuagla. Investors will be watching regional developments, and any further escalation of the crisis or damage to the real economy could intensify the "sell-off", he said. Muscat's stock index has trimmed its losses to just 1.8%, after falling more than 3% in a general sell-off. Heavyweight OQ Base Industries fell by 1.3%. Qatar's stock market was closed due to a "bank holiday" and the Bahrain stock index fell by 0.9%. Egypt's blue chip index fell 5.5% early in trading, with all its constituents falling. Abuagla added that disruptions to shipping through the Strait of Hormuz are also a major risk. They can affect sentiments and disrupt normal operations in a variety of sectors. Reporting by Ateeq Sharif, Md. Manzer Hussain, Bengaluru. Editing by Christopher Cushing and Elisa Martinuzzi. Hugh Lawson.
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Middle East flights suspended after US-Israel attack on Iran
On Sunday, airlines continued to cancel flights in the Middle East as most of the airspace was still closed. This is a day after Israel and the United States launched strikes on Iran killing the Iranian Supreme Leader Ayatollah Khamenei. The strike plunged the region into another conflict. Flightradar24's maps showed that the airspace above Iran, Iraq?, Kuwait, Israel, Bahrain and the UAE, as well as Qatar, was virtually empty. Air strikes also forced major Middle Eastern airports such Abu?Dhabi, Doha and Dubai to close or be severely restricted. The following is a list of the most recent flights by airline alphabetically: AEGEAN AIRLINES The largest airline in Greece has suspended flights to and from Tel Aviv, Israel, Beirut, Lebanon and Erbil (Iraq) until March 2. AIR ASTANA The group has cancelled all flights into the Middle East until March 3. AIR CANADA The airline has announced that it will cancel flights from Canada to Israel and Dubai until March 8, as well as flights to Dubai till March 3. AIR EUROPA Spanish Airlines cancelled flights to Tel Aviv for Sunday and Monday. The airline is currently monitoring the situation and will assess its operations starting Tuesday. AIR FRANCE KLM Air France has cancelled all flights on Saturday to and from Tel Aviv, Israel and Beirut, Lebanon. KLM, its Dutch subsidiary, announced late Saturday that flights this weekend to and from Dubai Dammam Riyadh and other destinations were cancelled. The Dutch airline had already moved up the suspension date of its Amsterdam-Tel Aviv flight to Saturday. AIR INDIA The carrier has cancelled Sunday flights from Delhi, Mumbai, and Amritsar, to London, New York City, Chicago, Toronto and Paris. It added that additional flights were cancelled to London, Birmingham Amsterdam, Zurich Milan, Vienna, Copenhagen, and Frankfurt. AZERBAIJAN AIRLINES The airline has suspended all flights to and out of Dubai, Doha and Tel Aviv. BRITISH AIRWAYS British Airways, owned by IAG, has announced that it will cancel flights to Tel Aviv until March 3, and to Bahrain until March 3. It also cancelled its flight from Amman on Saturday. CATHAY PACIFIC Hong Kong-based Cathay Group, the parent company of Cathay Pacific Airways has suspended its operations in the region. This includes passenger flights from and to Dubai and Riyadh as well as freighter services at Al 'Maktoum Airport. This is Dubai's secondary airport, after Dubai International Airport. It is the hub for most of Dubai's passenger traffic. EMIRATES Due to the multiple closures of regional airspace, Emirates has suspended its operations into and out of?Dubai up until 3 pm UAE time on Wednesday March 2. ETIHAD Etihad, the UAE's national airline, said that flights departing Abu Dhabi had been suspended until Sunday at 2 p.m. FLYDUBAI The airline announced that it has temporarily suspended all flights from and to Dubai until Sunday at 3 pm local time. IBERIA EXPRESS Iberia Group, a Spanish airline, has cancelled a flight scheduled to depart from Tel Aviv at 5 pm local time on Saturday. INDIGO IndiGo, India’s largest airline, announced that it has extended the temporary suspension of selected international flights using Middle East Airspace until Monday. ITA AIRWAYS ITA Airways has suspended all flights to and out of Tel Aviv, and announced that it will not be using the airspace in Israel, Lebanon and Jordan, Iraq or Iran until March 7. Flights from and to Dubai have been suspended until March 1. JAPAN AIRLINES Nikkei reported that Japan Airlines had cancelled a flight from Tokyo Haneda on Saturday to Doha, as well as the return flight for March 1. LOT POLISH AERLINES The airline has suspended flights from Tel Aviv to Dubai until March 15, and has cancelled flights between Riyadh and Dubai until March 2. LUFTHANSA German Airlines suspended flights from and to Tel Aviv, Israel and Beirut, Lebanon until March 7th. Flights to and out of Dubai were also suspended on Saturday and Sunday. The plane also announced that it would not be flying through the airspace of Israel, Lebanon, Jordan, Iraq and Iran until?March 7th. NORWEGIAN AIR A spokesperson for the Nordic airline confirmed that all flights to and from Dubai were suspended until March 4. He added that the carrier had not suspended flights to Tel Aviv, Israel or Beirut, Lebanon as these destinations were only active during summer. PEGASUS Airline The airline announced that flights to Iran and?Iraq as well as Jordan and Lebanon have been cancelled until March 2. QATAR AIRWAYS Flights are temporarily suspended due to the Qatari airspace closure. It will provide an update on Monday at 9 am local time. SCANDINAVIAN AIRLINES The airline informed that it had suspended Saturday's flight from Copenhagen to Tel Aviv. There has been no decision made about flights at other dates. TURKISH AIRLINES On Saturday, the airline cancelled all flights to Qatar, Kuwait and Bahrain as well as flights to the United Arab Emirates, Oman, and Jordan. Flights to Lebanon, Syria and Iraq were also canceled until March 2. VIRGIN ATLANTIC Virgin Atlantic has announced that it will temporarily avoid Iraqi Airspace. This will result in some pre-planned reroutings of flights. It also cancelled Saturday's VS400 flight from London Heathrow Airport to Dubai. WIZZ AIR With immediate effect, the Hungarian airline halted all flights to and from Israel as well as Dubai, Abu Dhabi, and Amman. The statement added that the operational decisions will continue to be reviewed, and the flight schedule can be changed as circumstances change. Josephine Mason, Federico Maccioni, Barbara Lewis, Emelia Sithole Matarise, Cynthia Osterman and David Goodman edited the report.
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Gulf Stocks fall as Iran strikes disrupt regional security
Investors pulled their money from Gulf?stocks as they feared?prolonged destabilisation after attacks by Israel and the U.S.?on Iran. Iran retaliated by?attacking Israel and?nearby?U.S. Targets in Arab Gulf Cities State media reported that the Iranian leader Ayatollah Ayatollah Khamenei was killed in the attacks, which began Saturday. On Sunday, witnesses reported explosions over Doha and in the Dubai region for a second consecutive day. Iran's retaliation against U.S. and Israeli strikes caused major regional airports to close, including Dubai. This was one of the worst aviation disruptions in recent years. Investors can measure the impact of trading in Middle East markets on all assets, from oil to safe haven currencies and gold. The benchmark Saudi Arabian share price index plunged by 4.6% during early trading, setting a record for the biggest intraday drop since April. Saudi National Bank, Al-?Rajhi Bank and Flynas were all in the negative at 4.5%. Saudi Aramco however saw a 2.3% increase. On Saturday, the kingdom said that Iran attacked Riyadh as well as the eastern part of its country. Boursa Kuwait has suspended all trade as a precautionary measure. Gulf stock markets are facing increased volatility and correction risk as geopolitical tensions drive a risk off mood and pressure prices and expectations. Investors will be watching regional developments and any further escalation, or damage to the real economy could intensify the "sell-off", he said. The?Muscat Stock Index trimmed its loss to just 1.5%, after sliding by more than 3% on a wide-based basis. Heavyweight?OQ Base Industries fell 2.2%. Qatar's stock market was closed on bank holiday and Bahrain's index fell?0.6%. Abuagla stated that disruptions to shipping through the Strait of Hormuz are also a major risk. They could affect sentiment and disrupt normal operations in a variety of sectors. Barclays increased its Brent crude price forecast on Saturday to around $100 per barrel from $80 the day before. (Reporting and editing by Christopher Cushing in Bengaluru, Ateeq Sharif in Bengaluru)
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Witnesses report hearing waves of explosions over Doha and Dubai for the second day.
Witnesses reported hearing loud blasts in Dubai and Doha, the capital of Qatar, for the second consecutive day on Sunday as Iran escalated its retaliatory attacks on Gulf neighbours in response to U.S. Iran had said that it would attack U.S. military bases in the Gulf region, but has actually hit a range of other targets. A Dubai Media statement stated that two?people? were injured after shrapnel fell from drones when they were intercepted. Dubai's airport international, the iconic Burj Al Arab Hotel and the posh Palm Jumeirah Island were all damaged. The Jebel Ali port area continued to be filled with thick black plumes of smoke after one of the berths had caught fire on Sunday due to debris from an aerial interception. Dubai is the largest tourism and trade hub of the Middle East, and its airport is a major travel hub. Qatar's interior minister said that it was responding to a small fire in an industrial area after debris from a missile intercepted fell. (Reporting from Andrew Mills and Maha El Dahan, in Dubai; editing by Edmund Blair and Christian Schmollinger).
Three tankers are damaged in the Gulf as tensions between Iran and the United States escalate
After a 'U.S. Shipping sources and officials reported on Sunday that Israeli strikes against Iran led to a retaliatory response from Iran, which put merchant ships in danger of collateral damage. Shipping data revealed that the risks to commercial shipping increased in the last 24 hours. More than 200 vessels, including oil and gas tankers, dropped anchor around the Strait of Hormuz.
Iran has announced that it has closed the navigation of this critical waterway.
The U.S. and Israeli attack on Iran has increased the risk of security for ships operating in the Persian Gulf, and adjacent waters," Jakob 'Larsen said. Chief Safety and Security Officer at BIMCO.
"SHIPS MAY be targeted in error or with malice"
Ships with ties to U.S. and Israeli interests are more likely to be targeted. However, other ships could also be deliberately or accidentally targeted.
The country's maritime safety centre did not specify what struck the vessel, but said that it was a Palau-flagged tanker subject to U.S. sanctions.
Two maritime security sources reported on Sunday that the Marshall Islands flagged crude oil tanker MKD VYOM, while carrying a cargo off the coast of Oman, was struck by a projectile.
One of the sources claimed that the vessel was struck 44.4 nautical miles north of Muscat.
The British maritime agency UKMTO reported that a merchant vessel laden with cargo had reported an explosion at the same location. A tanker in Jebel Ali, United Arab Emirates was nearly damaged by debris that fell from an aerial intercept after Iranian attacks overnight on Gulf states.
Two shipping sources confirmed that a third oil-bunkering vessel was damaged near the coast of UAE.
The U.S. Transport Ministry's Maritime Administration issued a warning on Saturday advising vessels to avoid the Strait of Hormuz, and the wider Gulf of Oman due to the?risk of retaliatory attacks by Iran.
It said that any commercial vessel operating in the area, whether it is U.S. flagged or owned by U.S. citizens should maintain a distance of 30 nautical mile from U.S. military ships to avoid being misunderstood as a potential threat.
Security sources also said that there was a?potential danger of mines being laid by Iranian forces within the Strait of Hormuz's narrow lanes. In June, the Iranian military placed naval mines aboard vessels in the Persian Gulf, raising concerns in Washington that Tehran is preparing to blockade the Strait of Hormuz, according to two U.S. government officials. In July, two U.S. officials told?that the Iranian military loaded naval mines on vessels in the Persian Gulf. This raised concerns?in Washington that Tehran was preparing to establish a Strait of Hormuz blockade.
Maritime sources reported that there was a belief among underwriters that the rates for war risk insurance would increase when they reviewed coverage on Monday.
Lloyd's of London has already listed Iran, the Gulf of Oman and some parts of the Gulf of Oman on its list of high-risk areas.
Dylan Mortimer, an insurance broker at Marsh, said that the near-term increase in rates for marine hulls insurance could be between 25% and 50%. Reporting by Yousef Sabah, Jonathan Saul and Jaidaa Tha, Additional reporting by Yannis Souliotis and Arathy Sommesekhar; Editing and editing by David Goodwin and Ros Russell
(source: Reuters)