Saudi economic growth slows amid Iran war’s impact on oil
Saudi Arabia’s quarterly economic growth slowed to its weakest pace since mid-2024, as the kingdom deals with the impact of the Iran war on oil.
Gross domestic product grew 2.8% year-on-year in the three months through March, according to preliminary data from the General Authority for Statistics – down from 5% in the previous quarter.
The oil sector’s growth eased sharply to 2.3% from 10.8%.
Non-oil activity also slowed to 2.8% from 4.3% in the prior quarter, Bloomberg reports.
“The playbook that the Saudi authorities deployed at the beginning of the crisis allowed them to be more resilient,” said Jihad Azour, the International Monetary Fund’s Middle East and Central Asia director, though the IMF has trimmed its 2025 growth forecast to 3.1%.
UAE quits OPEC
The UAE said it is quitting OPEC, delivering a powerful blow to the alliance amid disruptions to the global energy business triggered by the Iran war.
“This decision follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs,” OPEC said on Tuesday in a statement carried by the UAE state news agency Wam.
The split with OPEC and the broader OPEC+ coalitiion, comes as Gulf producers struggle to move exports through the Strait of Hormuz, where Iranian threats and attacks have disrupted a key global sea channel and LNG transit route. The UAE said its departure will be effective May 1.
Tensions have been escalating since the UAE, the world’s seventh largest oil producer, criticized fellow Arab states for failing to adequately respond to Iranian attacks. Anwar Gargash, an advisor to UAE President Sheikh Mohamed bin Zayed publicly condemned what he described as weak political and military support from both the Gulf Cooperation Council and the Arab League.
“During our time in the organization, we made significant contributions and even greater sacrifices for the benefit of all,” the OPEC statment said, “However, the time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets. This is what we will focus on going forward.”
Aluminum prices spike after Iran hits plants in Abu Dhabi, Bahrain
The Iran war is hitting global aluminum supplies, with Emirates Global Aluminium and Bahrain’s Alba both reporting damage to key facilities after Iranian strikes.
EGA’s Al Taweelah plant in Abu Dhabi, one of the world’s largest aluminum sites, was hit in a weekend attack that injured workers and disrupted operations.
The incidents underscore how the conflict is expanding beyond oil into core industrial metals that feed global manufacturing supply chains, The Wall Street Journal reports.
Prices have begun to climb as traders factor in the risk of prolonged disruption to Gulf production. Aluminum prices on the London Metal Exchange jumped 6% on Monday, nearing four-year highs.
Dubai moves to reassure investors, anticipating strong comeback from war
As Iranian missiles continue to strike downtown Dubai, property owners are cutting prices and investment bankers are temporarily moving abroad to safety, but the UAE’s government is betting on a comeback.
Four weeks into the war with Iran, the Central Bank of the UAE is trying to ensure that credit lines stay open and companies have the cash to deal with soaring freight costs and supply chain disruptions.
Since Iran’s first missile attack on its neighbor across the Gulf on Feb. 28, the UAE has tried to keep markets calm and money flowing: the Central Bank of the UAE has pumped extra cash into banks so they can keep lending, kept interest rates aligned with the U.S. to support the dirham’s dollar peg, and made clear it will provide emergency funding if needed.
“Sovereign funds and government-linked entities continue to deploy capital, sending a strong signal that the country remains open for business,” Suneel Gokhale, Co-Founder and General Partner at VentureSouq, told The Circuit. “Instead of pulling back, policymakers have focused on maintaining liquidity, preserving business continuity, and reinforcing the country’s position as a stable hub for capital and innovation.”
Dubai investors have painful memories of the 2008 global financial crisis, when the city’s debt-fueled property boom collapsed, prices fell by more than half, and Dubai World sought to delay repayment on about $25 billion of debt. The emirate required a $20 billion bailout led by Abu Dhabi.
In the current conflict, hedge funds and banks, including Millennium Management, Citadel, JPMorgan Chase and Goldman Sachs, have told staff to work from home after the missile strikes. Many are offering employees the option to relocate temporarily to offices in London, Singapore or elsewhere.
At the same time, those firms are reviewing their presence in the UAE. Some warn that if the war drags on, firms that flooded in for its low-tax advantages could begin to move out.
“If the conflict de-escalates, we are likely to see a normalization rather than a sharp rebound,” Ryaan Sharif, a partner at Flat6Labs, said in an interview. “Investors will remain selective, focusing on high-quality assets and long-term structural themes, even as geopolitical risk premiums fade.”
In Abu Dhabi, government-backed developers such as Modon continue to support activity by launching and promoting a variety of big-ticket construction projects. Aldar Properties said its 2026 home handovers and construction pipeline remain on schedule despite the conflict, as it awarded about $1.3 billion in contracts and continued work across 141 sites without disruption. Banking and property transfers remain operational.
“The outlook remains highly dependent on the timeline for resolving the conflict between Iran and the United States,” Timur Lebedev, Head of fixed income research at Freedom Finance Global, told The Circuit.
Markets reliant on international buyers are likely to lag those driven by local and resident demand, a dynamic that puts Riyadh and Abu Dhabi in a stronger near-term position than Dubai. Energy, gold, global equities and foreign exchange are all offering active trading opportunities as they respond to the rapidly changing conditions.
“In the current environment, opportunities are increasingly driven by volatility,” Mindaugas Suklevicius, founder of HF Quarters, said in an interview.
The recovery, when it comes, will likely be uneven, said Ben Crompton, Managing Partner at Crompton Partners.
“It probably depends not just on how long this lasts and the damage that it does, but also what peace looks like – what are the kind of guarantees that are in place that this won’t happen again.
Iran conflict disrupts deals, sports and major business conferences
The impact of war with Iran is spreading far beyond oil markets and shipping lanes, forcing companies, conference organizers and sports federations to cancel deals and major international events across the Middle East.
Australian infrastructure giant Macquarie withdrew from bidding for a stake in Kuwait’s oil pipeline network in a deal valued at some $7 billion, Reuters reports. The project was intended to bring private capital into Kuwait’s energy infrastructure, but the conflict and the closure of the Strait of Hormuz have sharply raised the risk profile for Gulf oil assets.
Macquarie’s withdrawal is one of the first major examples of an international investor walking away from a Gulf transaction because of the war. Kuwait Petroleum Corp., which launched the pipeline sale shortly before Iranian strikes hit Gulf cities, is still seeking bids from other investors, though the conflict has already forced it to declare force majeure and reduce output.
The shock waves are also affecting the region’s conference industry. Organizers of major international gatherings in the Gulf are reassessing schedules as travel disruptions and security concerns mount, with some large events being postponed or shifted while others warn that further delays are possible if the conflict drags on.
Among the events affected is the World Petroleum Congress, one of the energy industry’s most important gatherings, which organizers said will be postponed because of the ongoing Middle East crisis. Arabian Travel Market, a flagship global travel trade show scheduled for May in Dubai,has been pushed back to August at the Dubai World Trade Centre as organizers try to ensure international participation and safety for exhibitors and visitors.
Major sporting events have also been caught in the turmoil. UEFA and CONMEBOL confirmed that the 2026 Finalissima between Spain and Argentina, scheduled for March 27 in Qatar, has been cancelled after organizers concluded that the regional security situation and travel disruptions made the match impossible to stage.
Dr. Sultan Al Jaber, the UAE’s Minister of Industry and Advanced Technology and CEO of ADNOC, meanwhile, said Iran’s actions represent a broader threat to regional stability that goes beyond a conventional military confrontation. “This is not a military exchange. This is an attack on a peaceful nation, a nation that has been working diligently and very hard for diplomacy,” Al Jaber told The Wall Street Journal.
Yousef Al Otaiba, the UAE’s ambassador to the U.S., said the conflict with Iran is testing the resilience of international partnerships as governments coordinate responses to the regional instability. “The international community sent a clear message – it will not tolerate attacks on our sovereignty,” Al Otaiba said in a statement posted by the UAE Embassy.
War-risk insurance costs surge for ships entering Strait of Hormuz
War-risk insurance premiums for ships crossing the Strait of Hormuz are still available, but they’ve climbed to record levels after Iran’s attacks on commercial vessels.
Coverage now costs about 5% of a ship’s value, roughly five times higher than premiums charged earlier in the conflict, Bloomberg reports. For a tanker valued at $100 million, that rate implies an insurance bill of roughly $5 million for a single voyage.
The Strait of Hormuz normally carries about one-fifth of global oil shipments, making insurance coverage essential for tankers and other vessels transporting energy supplies from the Gulf.
The surge in insurance costs adds another financial barrier for shipowners weighing whether to send vessels through the strait that links the Gulf to global markets.
President Donald Trump has said the U.S. will make sure that ships are able to pass through Hormuz without saying exactly how. Details of a $20 billion reinsurance plan to help revive shipping are still unclear.
Iran crisis sparks farm chemical crunch, threatening food supplies
It’s not just oil. War with Iran is also making a range of chemicals critical for food production more expensive, including fertilizer components like urea and ammonia, Bloomberg reports.
The Middle East is the source of some 45% of the global urea supplies, which cannot be stored for long periods.
That means logistical disruptions such as the shutdown of the Strait of Hormuz can quickly tighten the market and send prices soaring.
Western sanctions have curtailed imports of Russian fertilizers, while China has imposed export restrictions to protect domestic demand and support its farming sector, the news agency said.
Shipping giants freeze container traffic amid rising Gulf threats
Container shipping giants Hapag-Lloyd and A.P. Moller-Maersk have halted bookings and begun diverting vessels away from the Middle East amid escalating security risks in the Strait of Hormuz, disrupting global trade routes.
The moves by the two European carriers – among the world’s biggest container lines – come as the threat of missile and drone attacks has forced shipping companies to reroute cargo or suspend transits through the narrow Gulf waterway, The Wall Street Journal reports.
More than 3,000 vessels have been stuck in Gulf ports or waiting outside the strait as insurers withdraw war-risk coverage and shipowners hesitate to send crews into what has effectively become a combat zone.
At the same time, oil shipping has begun to stall as dozens of supertankers either idle inside the Persian Gulf or slow their voyages while owners assess whether it is safe to attempt the passage, Bloomberg reports.
The disruption in the corridor that normally carries roughly a fifth of the world’s oil supplies has sent tanker charter rates soaring and raised fears of prolonged shocks to global supply chains.
