Middle Eastern Security Oasis No Longer Safe: US-Iran Conflict Will Weaken the Attractiveness of Countries Like the UAE

Caixin News, March 2 (Editor: Ma Lan) After the outbreak of conflict between the U.S. and Iran, Iran launched strikes against neighboring Gulf countries in retaliation for airstrikes by the U.S. and Israel. This retaliatory strategy directly impacts the status of Persian Gulf countries as financial hubs and high-end tourist destinations.

A netizen working in Qatar’s financial industry said he moved to Qatar to avoid taxes, but now he also has to “duck bullets.”

Analysts believe Iran’s strategy is to target U.S. allies in the Middle East, including the UAE, in hopes of pressuring President Trump to stop military actions.

In recent years, countries like the UAE have been working to diversify away from oil dependence, with finance and tourism as two key areas of development. The ongoing conflict between the U.S. and Iran could significantly undermine the achievements these sectors have made in the Middle East.

Not Safe Videos on social media show the Fairmont Hotel on Dubai’s Palm Jumeirah being hit in an airstrike, causing a fire. This has also caused panic among residents on the island, which is home to many of Dubai’s wealthy. Additionally, smoke was seen near the world’s tallest building, the Burj Khalifa.

Meanwhile, a fire was triggered by debris from a intercepted missile, leading Dubai Global Ports to suspend operations at Jebel Ali Port. Jebel Ali is the largest container port in the Middle East and a vital part of Dubai’s economy. The port and its adjacent free trade zone account for 36% of Dubai’s GDP.

A nearby attack also hit Abu Dhabi, with debris from a drone apparently striking the Etihad Towers. Kuwait City International Airport was also targeted by a drone attack.

Former JPMorgan chief strategist Marko Kolanovic warned that unless the UAE pressures Trump to swiftly and decisively defeat Iran or immediately cease its attacks, what is happening in the UAE could be disastrous.

He added that since 88% of the UAE’s residents are foreigners, and sectors like tourism, finance, aviation, and shipping are closely linked to this demographic, the situation could trigger shockwaves globally.

The current conflict is likely to cause foreign nationals to flee cities like Dubai in the Middle East. The bigger question is whether these people will still trust Dubai’s safety and return to the Middle East once the situation improves.

Cinzia Bianco, a scholar at the European Council on Foreign Relations (ECFR), warned that Iran’s retaliatory actions pose the biggest nightmare for Dubai, as its essence lies in being a safe oasis amid regional turmoil. While Dubai may find ways to recover in the future, the losses are already hard to undo.