On the morning of February 28, Dubai’s real estate index stood at 16,910. It had delivered roughly 180 percent returns since October 2023 and followed the most extraordinary year in the emirate’s property history: AED 917 billion in transactions across more than 270,000 deals. Dubai had firmly established itself as one of the world’s most attractive destinations for global capital seeking stability and opportunity. By March 9, however, the index had fallen nearly 20 percent in just five trading sessions, erasing all gains recorded in 2026. That rapid shift illustrates how quickly geopolitical uncertainty can affect economic confidence, even in markets that have spent years building strong fundamentals. I write this from Erbil in Iraq’s Kurdistan Region, where the consequences of regional instability are felt directly rather than observed from afar. Our airport was struck during the early stages of the recent escalation and energy infrastructure across the wider region has faced threats. Living here underscores a simple reality: when tensions rise, the economic consequences travel quickly across borders. Aviation provides the clearest early indicator. Since February 28, more than 23,000 flights across the Middle East have been cancelled, representing more than half of all scheduled regional departures. That represents roughly 4.4 million passenger seats that never left the ground. Doha’s Hamad International Airport recorded more than 2,000 cancellations. Dubai International experienced temporary evacuations, while Abu Dhabi’s Zayed Airport cancelled more than 1,000 flights. The Gulf Cooperation Council’s airports collectively handle around 14 percent of global international transit traffic. When disruptions occur at this scale, their impact extends well beyond the region. Tourism analysts estimate that international arrivals across the Middle East could fall between 11 and 27 percent during 2026, representing up to 38 million fewer visitors and between 34 billion and 56 billion dollars in lost tourism revenue. The Gulf has spent two decades building its reputation as one of the world’s most reliable connectivity hubs. Preserving that reputation is essential for aviation, tourism, trade, and investment. Energy markets have also reacted sharply to the current tensions. Oil prices surged roughly 50 percent following the initial escalation, with Brent briefly crossing 119 dollars per barrel. Qatar’s Minister of State for Energy Affairs, His Excellency Saad bin Sherida al Kaabi, warned that significant disruption to shipping through the Strait of Hormuz could have major consequences for global energy markets. Roughly 20 percent of the world’s oil and liquefied natural gas moves through the Strait. Analysts project that prolonged instability could push Brent prices significantly higher in the coming months. The downstream effects, including higher fuel costs and supply chain disruptions, would affect economies far beyond the Gulf region. Dubai’s property market offers another perspective on the same challenge. The city has spent years cultivating a reputation as a secure destination for international capital. In 2025 alone, nearly 9,800 millionaires relocated to Dubai, bringing an estimated 63 billion dollars in wealth. Property markets, however, depend heavily on long term expectations of stability. When uncertainty rises, investment decisions are often postponed rather than cancelled. Even temporary hesitation can influence market sentiment and slow momentum. Across the Gulf, ambitious economic transformation strategies depend on sustained confidence. Saudi Arabia’s Vision 2030 requires continued foreign investment and stable energy revenues. The UAE’s position as a global logistics and financial hub relies on predictable airspace and secure maritime routes. Qatar’s LNG exports, which supply a significant share of Europe’s natural gas, move through shipping corridors that remain essential to global energy security. For this reason, diplomatic engagement remains critical. Several regional actors have consistently emphasized dialogue as the most effective path for managing tensions and protecting economic stability.Qatar has played a particularly important role in this regard. Over many years, Doha has built a reputation as a facilitator of dialogue in complex regional disputes, maintaining open channels with a wide range of international partners. In periods of heightened tension, those relationships can provide valuable opportunities for communication and de-escalation. The broader diplomatic architecture for dialogue already exists. Oman has historically served as an important channel for communication between Washington and Tehran. European actors, particularly Britain, France, and Germany, maintain relationships that could contribute to renewed diplomatic efforts. Within this wider landscape, another figure who may be well positioned to support dialogue is President Nechirvan Barzani of the Kurdistan Region of Iraq (KRI). President Barzani occupies a relatively rare position in the region’s political landscape. Over many years he has maintained functional relations with Tehran while also sustaining strong partnerships with Washington and major European capitals. The Kurdistan Region shares a long border with Iran and has managed that relationship through President Nechirvan Barzani’s pragmatic diplomacy, while simultaneously building economic and security cooperation with Western partners. In an environment where many actors are perceived as aligned with one side or another, such balanced relationships are increasingly valuable. A leader like President Nechirvan Barzani able to maintain credible communication with multiple stakeholders can help create space for dialogue when tensions are high. The Kurdistan Region itself has been directly affected by the current instability. Infrastructure has been targeted and the broader economy is exposed to regional disruption. That experience provides both motivation and legitimacy for calls to prioritize de-escalation. History shows that ceasefires often begin not with the resolution of every dispute but with the recognition that continued escalation makes all issues harder to resolve. Energy markets, regional security arrangements, and diplomatic negotiations all become more complex when tensions intensify. From Erbil, the lesson is clear. What is experienced locally today could quickly become more widely felt across the region if instability continues. Over the past two decades, the Gulf has built something remarkable: global aviation hubs, world class infrastructure, thriving financial centers, and dynamic cities that attract talent and investment from across the world. This economic transformation remains one of the most significant development stories of the modern Middle East. That success, however, depends on stability and confidence. The economic signals emerging over recent weeks demonstrate how sensitive those foundations can be during periods of geopolitical tension. Protecting the Gulf’s economic momentum therefore requires not only strong markets and infrastructure but also sustained diplomatic engagement. Regional actors with the credibility and relationships to encourage dialogue, including mediators such as Qatar and potential interlocutors such as President Nechirvan Barzani, may have an important role to play in supporting de-escalation.The Gulf’s prosperity has been built over decades. Preserving it will require continued commitment to stability, cooperation, and diplomacy in the months ahead. Dr. Ruwayda Mustafah is a political scientist and writer based in Erbil, Kurdistan Region of Iraq. She holds a PhD from Kingston University, London.
