GULF RESILIENT TO IRAN-ISRAEL CRISIS

Over the past two decades, the UAE and its GCC partners have invested in creating alternative engines of growth, which future-proof economies and serve as economic shock absorbers during geopolitical tension

- BY AHMED EL SAFTY | Special to Gulf News

The recent escalation between Israel and Iran may have lasted less than two weeks, but its economic implications have left a longer-lasting imprint. While the region avoided a broader military fallout, the episode provided a revealing stress test for the resilience of energy markets, Gulf stock exchanges, and regional preparedness.

Given that roughly 20 per cent of the world's oil and gas flows through the Strait of Hormuz, it was natural for markets to worry about potential disruptions. Iranian threats to block the Strait briefly revived fears of a supply shock. Yet, oil markets remained largely composed. Brent crude rose around 13 per cent to the mid-$70s during the peak of the crisis, but quickly returned to pre-conflict levels once tensions eased.

Investments in energy security

This stability is not accidental. It reflects market confidence in the fundamental structures underpinning energy supply. For years, the UAE and Saudi Arabia have invested in bypass pipelines — the Habshan-Fujairah pipeline and the East-West Pipeline respectively - that allow oil to flow outside the Strait of Hormuz.