ERBIL, Kurdistan Region - On the morning of March 1, a yacht passed along the waterfront of Jebel Ali port in the United Arab Emirates (UAE) while thick smoke rose behind it into the sky. The image, captured by Fadel Senna, a photographer for AFP, quickly spread across global media within an hour. It came to define a moment that few in the Gulf’s planning circles had ever expected to see. Jebel Ali was burning, and Dubai was in the midst of war.
Nine hours after the first US and Israeli attacks on Iran, Iran carried out its response against what is considered the largest container port in the Middle East. By the time Dubai emergency teams brought the fire under control at the terminal, DP World, which manages the port and is one of the world’s largest logistics companies, had halted all operations.
Thousands of ships in the Gulf dropped anchor. Crew members on cargo vessels watched the sky, waiting for possible drone strikes. Shipping companies in Copenhagen, Geneva, Hamburg and Singapore began reassessing their exposure as the Strait of Hormuz effectively closed. Vessels that had been expected to arrive within days or weeks were left in doubt.
What followed over the next month was not a routine crisis or a disruption that could be resolved by rerouting trade. The International Energy Agency described it as the greatest threat to global energy security “in history." With each missile strike, ports across the Arab Gulf grew increasingly constrained.
From 138 ships daily to only three
To understand what happened to Gulf maritime activity in March 2026, the starting point is 138. That was the average number of ships passing daily through the Strait of Hormuz before the start of the US and Israeli attack on Iran in late February. The traffic included oil tankers, LNG carriers, container ships, automobile transporters and chemical cargo vessels moving through the 33-kilometer waterway between Iran and Oman that connects global trade routes.
By March 17, that number had fallen to just three ships. Those vessels, monitored by the United Against Nuclear Iran (UANI) organization, did not fly the flags of NATO countries or major global shipping firms. They moved along Iran’s coastline under a “pre-approval system” established unilaterally by Tehran, allowing passage only to allies and selected commercial partners.
The decline was not driven solely by sea mines, although Iran had begun deploying them. It was also not only the result of 21 confirmed attacks on commercial ships in the first three weeks. The decisive factor that effectively closed the Strait of Hormuz and turned a military escalation into an economic shock was insurance.
Before the attacks, war risk insurance for ships stood at about 0.125 percent of a vessel’s value. For large oil tankers, the cost was manageable. Within hours of Iran’s response, rates rose to 0.2 percent and then 0.4 percent, adding more than $4 million per passage in some cases. Insurance providers then withdrew coverage altogether.
Denmark’s Maersk suspended all Gulf voyages before the end of the first week, followed by MSC, Hapag-Lloyd, and CMA CGM. A financial blockade emerged that no naval force could replicate alone.
The day Jebel Ali stopped
In Dubai, Jebel Ali is often described as “the engine.” The figures support the description. About 15.5 million containers pass through the port annually, connecting it to more than 150 global ports. It accounts for roughly 36 percent of Dubai’s GDP. When Jebel Ali operates, Dubai operates. When it stops, the impact is immediate.
The full disruption became clear when Jebel Ali halted operations on March 1, 2026.
The shutdown followed a fire at one of the terminals caused by remnants of an Iranian missile. During the war, Iran launched 357 ballistic missiles, 1,806 drones and 15 cruise missiles toward the UAE. Most were intercepted by the country’s defense systems at a cost the Defense Ministry has not disclosed, though it is estimated in the billions of dirhams.
Although the fire was contained, port security conditions remained unstable, forcing a suspension of operations by DP World. The closure triggered a chain reaction across logistics and business networks.
The port’s free zone, which hosts more than 7,000 companies, including 500 Chinese firms using Jebel Ali as a regional distribution hub, came under heavy strain. Dubai International Airport was closed multiple times. Travelers were directed to shelters during alerts. Emirates suspended flights.
Burj Al Arab, one of Dubai’s most recognizable landmarks, was damaged by interceptor missile debris. Smoke was reported rising from Dubai Marina towers. A drone also fell near the Fairmont The Palm hotel.
A financial sector employee in Qatar, taking photos of missiles from his residence balcony, wrote on social media platform X with sarcasm: "I came to Qatar to avoid taxes, but now I'm dodging missiles and barricading myself."
Financial impacts were immediate. The Abu Dhabi Securities Exchange and the Dubai Financial Market suspended trading for the first two business days, marking the first wartime market closure in UAE history. When trading resumed, the Dubai Financial Market fell 5.2 percent. Global indices, including the Dow Jones and S&P 500, also declined, while aviation stocks dropped sharply.
Marko Kolanovic, a former JPMorgan market strategist, said Dubai, where about 88 percent of the economy depends on foreigners, tourism, finance and aviation, could face significant losses if conditions persist. Tourism losses across Gulf countries due to airspace closures reached $40 billion, following the collapse of Ramadan holiday travel plans.
Oil’s arithmetic
If Jebel Ali represents the “drama,” oil represents the “tragedy.”
Before the war, nearly 20 million barrels of oil passed daily through the Strait of Hormuz, about one-fifth of global seaborne oil trade. The corridor also handled about 80 million tons of LNG annually, covering roughly 12 to 14 percent of Europe’s gas demand. Around 84 percent of crude oil bound for Asian markets passed through the strait. China sourced about one-third of its oil via this route, while Japan imported roughly 95 percent of its oil from Gulf suppliers.
The Federal Reserve Bank of Dallas said the shock represented, in terms of global supply contraction, an impact three to five times larger than previous oil crises, including those in 1973, 1979 and 1990. The closure of Hormuz in 2026 threatened up to 20 percent of global energy flows.
By March 6, data from Vortexa showed Gulf oil exports had dropped 72 percent within a week. Iraq’s exports through Basra stopped entirely. Kuwait had no alternative pipeline route. Saudi Arabia attempted to redirect flows through the East-West pipeline toward the Red Sea, but its capacity is about 7 million barrels, less than a quarter of pre-war Gulf production.
In Qatar, the impact was more severe. QatarEnergy halted production at Ras Laffan following direct attacks on facilities. European natural gas prices rose 40 percent in the first week. Qatar’s losses from a month of gas suspension were estimated at $4 billion.
Experts at Chatham House warned that continued closure of Hormuz could push Brent crude prices to $200 per barrel, a level that would likely trigger a global economic slowdown.
Identity of a city under fire
There is a type of damage harder to measure than lost trade or canceled travel: a city’s sense of itself.
For 40 years, Dubai built a model centered on distinction in a volatile region. While other Gulf cities relied primarily on oil, Dubai developed its identity around connectivity, finance and logistics. It built one of the world’s busiest airports and a port handling more containers than many major Western hubs. Its promise was stability, openness and reliability in a region defined by uncertainty.
From March 1, 2026, that sense of certainty came under direct strain.
Missile debris fell in Barsha and Palm Jumeirah areas. AWS said one of its data centers under construction was damaged, marking what may be among the first reported cases of cloud infrastructure being affected in wartime. Dubai Digital also came under fire.
Nabil Mellal, an investment manager at Edmond de Rothschild, said "There is a 70 percent risk that the war's impact on this region will remain for a long time..." He and others cautiously compared the situation to Beirut, which lost its position as a regional financial hub during Lebanon’s civil war.
Changing the world’s route
Amid disruption in the Gulf, global shipping had limited options. Much of the trade shifted to the longer route via the Cape of Good Hope, circling southern Africa to connect Asia and Europe, especially after the Houthis announced they had entered the conflict in support of Iran.
Saudi Arabia and the UAE quickly activated alternative routes. Aramco expanded use of the East-West pipeline. The UAE diverted oil through pipelines to Fujairah on the Arabian Sea. Logistics firms relied more heavily on overland transport and rail links to bypass affected ports.
However, Qatar, Kuwait and Bahrain have no viable land routes that avoid Hormuz or Saudi territory. These states depend heavily on imports for food and medicine. A prolonged closure would threaten basic supply chains.
Meanwhile, Russia gained market advantage. Russian oil, previously constrained in Europe due to sanctions, saw increased demand from India and China as buyers sought stable alternatives to Gulf supplies.
The scale of losses
After one month of war, estimated losses continued to rise:
Port revenue losses: about $14.4 billion in March 2026 across Gulf states.
Oil and gas export losses: about $21.5 billion.
Aviation and tourism losses: about $40 billion due to airspace closures and airport suspensions.
Financial market losses: stock declines, capital outflows and halted investment projects worth billions.
Total economic losses across GCC countries for the first month of war are estimated at $75 billion to $80 billion, excluding broader inflationary and industrial impacts in Asia and Europe.
The promise under test
Beyond economic losses, what is being tested is a long-standing regional assumption: that major Middle Eastern conflicts would not reach Gulf commercial centers.
For decades, Gulf financial hubs operated on the belief that instability would remain external. That assumption helped attract trillions in sovereign wealth investments and brought global firms and professionals to cities like Dubai.
From February 28 onward, that assumption came under direct challenge. Iran’s response targeted not only military infrastructure but also symbolic nodes of economic stability, including ports, airports, financial districts and high-profile buildings.
Whether that perception recovers depends on how the conflict develops. A short and decisive end could allow recovery, as infrastructure damage remains limited and capital has not fully withdrawn.
However, a prolonged conflict, continued closure of Hormuz and oil prices reaching $200 per barrel would raise deeper questions about long-term stability, reshaping global investment decisions and the region’s economic model.