The Gulf Hub Model Under Stress: What the Iran War Means for Multinationals in the GCC

The Gulf Cooperation Council (GCC) hub model, built on frictionless connectivity between capital, talent, data, and trade, is under acute stress as the ongoing war involving Iran spills into core infrastructure across United Arab Emirates (UAE), Saudi Arabia, Qatar, Bahrain, Kuwait and Oman. Airspace restrictions, port and refinery incidents, and disruption to cloud/data-centre operations collectively attack the “hub premium” that multinationals pay for: speed, reliability, and predictability.

Recent reporting indicate direct strikes or strike-related damage affecting airports/ports and cloud facilities alongside rapid tightening in war-risk pricing for shipping and aviation.

The exposure is structurally large because the region’s physical chokepoints and networked hubs sit on global critical paths. The Strait of Hormuzcarries around 20 mb/d of crude and oil products in 2025 (about 25 percent of seaborne oil trade), and nearly one-fifth of global LNG exports rely on the same corridor, with limited bypass capacity. International Energy Agency (IEA) and US Energy Information Administration estimates show that even short-lived disruption can transmit globally via price spikes and physical shortages, with Asia absorbing most of the flow.

From a corporate-risk perspective, this is no longer “energy price risk” alone. The immediate operating reality is multi-domain, and includes:

• Staff mobility and evacuation corridors;
• Cargo continuity (including high-value freight) when passenger networks are grounded;
• Contract performance and force majeure;
• Fast-moving sanctions and compliance exposure; and
• Step-change in insurance cost/availability for ships and, indirectly, for supply chains.

International Monetary Fund (IMF) managing director Kristalina Georgieva warned that a persistent 10 percent oil-price rise could add about 40 basis points to global inflation, an indicator of macro spillovers that quickly magnify corporate cost and demand shocks.

The practical implication for multinationals is to treat the Gulf hub footprint as a resilience portfolio rather than a single-node efficiency play:

• Confirm life-safety and communications within 24 hours;
• Stabilize logistics, treasury liquidity, and critical vendors within 7 days;
• Execute rerouting, contractual remediation, and governance decisions within 30 days; and
• Consider structural adjustments (dual hubs, diversified cloud regions, alternative export/import routings, and revised insurance strategies) if disruption persists.

Timeline of disruptive events affecting GCC infrastructure

The date anchors below prioritise official statements and major wire reporting alongside airport/airline and government communications.

• Late February 2026: conflict shock hits aviation corridors. After initial strikes by United States and Israel, regional governments and carriers issued rapid operational restrictions, including temporary closures and partial suspensions of air navigation. The UAE aviation regulator (via WAM-state reporting) announced a temporary, partial closure as a precautionary safety measure.
• Early March: hub operations move to degraded mode. Airport operators urged passengers not to travel without confirmed departure times and described limited resumptions subject to airspace measures; Dubai Airports’ operational updates confirm constrained operations at DXB/DWC under the temporary airspace regime.
• Ports and maritime risk repricing accelerates. Wire and specialist shipping press reported rapidly rising war-risk premiums and major carriers rerouting or suspending certain crossings through Hormuz. Reuters reported war-risk pricing jumping toward about 3 percentof hull value (from around 0.25 percent pre-crisis) for some voyages, implying multi‑million-dollar incremental costs per tanker movement.
• Energy-system force majeure and production curtailments. Reuters reported force majeure declarations and export interruptions affecting LNG and crude flows, including QatarEnergy’s LNG force majeure, Kuwait Petroleum Corporation’s force majeure and output cuts amid halted traffic, and a Bahrain refinery incident leading to force majeure by the national oil company.
• Digital infrastructure becomes a direct target set. Drone strikes damaged cloud/data-centre facilities linked to Amazon Web Services operations in the UAE and Bahrain, disrupting services and creating prolonged recovery risk, an escalation from “cyber risk” to physical resilience of digital infrastructure.

Quantifying GCC hub exposure

Energy and chokepoint exposure

The central structural vulnerability is the concentration of export flows through Hormuz. The IEA estimates that in 2025, around 20 mb/d of crude and oil products transited Hormuz (about 25% of global seaborne oil trade), and that only 3.5–5.5 mb/d of pipeline capacity is realistically available to bypass the Strait, primarily via Saudi and UAE routes.

On LNG, the EIA estimates that in 2024 about 20 percent of global LNG trade transited Hormuz, with Qatar exporting about 9.3 Bcf/d of LNG and the UAE about 0.7 Bcf/d through the Strait—nearly all Persian Gulf LNG flows. EIA further estimates roughly 83 percent of Hormuz LNG flows went to Asian markets in 2024, underscoring second-order risk for Asian manufacturing supply chains and energy-intensive EMEA industries buying LNG-indexed products.

A live-market indicator of systemic exposure is the policy response: Reuters reported the IEA calling for emergency oil stock releases in G7 discussions, and separately reported that G7 countries considered emergency stock measures as prices surged. Group of Seven involvement is a signal that policymakers view the disruption as globally material rather than regionally contained.

Shipping routes and port throughput as proxy for trade concentration

Ports are not just local infrastructure; they are national resilience assets. The throughput data below illustrates why disruptions transmit quickly:

• DP World reported Jebel Ali Port handled 15.5 million TEUs in 2024, highlighting its scale as a re-export and container gateway.
• AD Ports Group reported all-time-high container throughput of 6.3 million TEUs in 2024 across its Ports Cluster, with material capacity concentrated at Khalifa Port.
• Hamad Port annual report figures indicate 1.421 million TEUs handled in 2024.
• Khalifa Bin Salman Port handled 409,382 TEUs in 2024.
• Shuwaikh Port statistics show 613,093 TEUs handled in 2024.
• For Saudi Arabia’s Gulf coast gateway that services the central region (including Riyadh logistics corridors), King Abdulaziz Port terminal operator releases indicate volumes reaching a high of ~3.2 million TEUs in 2024.

Conflict-period dynamics matter as much as baseline volumes. Bloomberg reported major container carriers rerouting ships and suspending some crossings in Hormuz, increasing lead times and increasing dependence on alternative ports/routes.

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Aviation hubs and cargo dependence

In hub economies, passenger networks are also supply-chain infrastructure because bellyhold cargo carries pharmaceuticals, electronics components, and high-value commodities.

• Dubai International Airport recorded 92.3 million passengers in 2024 and 2.2 million tonnes of cargo, with Dubai Airports forecasting further growth in 2025–2027.
• Zayed International Airport (Abu Dhabi airports reporting) surpassed 29 million passengers in 2024, with cargo of 678,990 tonnes.
• Hamad International Airport annual reporting indicates 52.7 million passengers and 2.6 million tonnes of cargo in 2024.
• King Khalid International Airport official communications state it carried more than 37 million passengers in 2024 and operated 269,000 flights, connecting to 113 destinations, illustrating the scale of disruption when Gulf airspace corridors are constrained.

The conflict’s impact on “non-energy” cargo is visible in commodity flows: Bloomberg reported that flight cancellations and airspace disruption in Dubai stalled gold/silver shipments carried in passenger aircraft cargo holds, an example of how aviation disruption quickly becomes trade-finance and inventory risk.

Banking and treasury concentration

First, the UAE central bank publishes deposit data based on the emirate where banks’ head offices are located. As of end-December 2024, deposits held in banks headquartered in Abu Dhabi and Dubai included a significant share of non-resident deposits, both in absolute terms and as a proportion of total funding. This reflects the UAE’s role as a regional financial hub, but it also highlights how cross-border liquidity can shift quickly during periods of geopolitical or financial stress.

Second, in Qatar, the IMF has noted that regulatory measures aimed at reducing banks’ exposure to short-term foreign liabilities led to a sharp decline in non-resident deposits in 2022. Since 2023, these deposits have stabilized as a share of total liabilities, illustrating how regulators increasingly treat reliance on non-resident funding as a key resilience variable within the banking system.

At the international level, cross-border payments rely heavily on correspondent banking relationships, where banks hold deposits on behalf of other financial institutions and provide payment services across jurisdictions. Guidance from the Bank for International Settlements (BIS) and central banks emphasizes that these relationships are subject to strict AML and counter-terrorism financing compliance requirements. During periods of geopolitical tension or sanctions pressure, these links can tighten rapidly, creating friction in international payment flows.

Hub metrics comparison table

The table below is designed for editorial use as a single “hub intensity” visual. Where city-specific deposit totals are not published, the best available regulated proxy is used (for example, emirate-headquarter totals for the UAE). Year/coverage differs by data source; this is noted in metrics selection.

Sector impact assessment

• Energy systems are facing both physical disruption and policy volatility. The IEA frames Hormuz as a critical chokepoint with limited bypass capacity and highlights that closure would also “strand” LNG exports from Qatar and the UAE, together representing almost 20 percent of global LNG exports. Reuters reporting on force majeure declarations and output cuts illustrates how quickly disruption propagates from strike events to contractual performance and supply availability.
• Logistics is absorbing a compounded shock. Threat perception plus insurance repricing. Reuters reported hull war-risk premiums rising toward about 3 percent of hull value for some voyages, implying several million dollars per trip for VLCC-sized assets and incentivising “wait-and-see” behaviour that disrupts schedules even before any physical damage occurs. Lloyd’s List reporting emphasises that war-risk cover remains available but at sharply higher pricing and tighter terms, reinforcing that the constraint is not just availability but affordability and conditions.
• Aviation is affected through closures and corridor constraints, with hub airports shifting to limited schedules, disrupting both passenger movement and bellyhold cargo. Official airport operator updates show operational uncertainty and passenger advisories, while Bloomberg reported that grounded flights in Dubai disrupted commodity shipments (including precious metals), demonstrating how airspace disruption becomes an inventory and trade-finance issue.
• Finance impacts operate through (i) liquidity and deposit composition, (ii) payments/correspondent link tightening, and (iii) corporate treasury operational continuity. UAE central bank data show non-resident deposits are a meaningful component of the deposit base in emirate-headquartered banking segments, and IMF reporting for Qatar highlights active policy management of non-resident deposits and foreign liabilities. These are the exact fault lines that can shift quickly when geopolitics raises counterparty and sanctions-screening sensitivity.
• Tech and data centres are now explicitly part of the threat surface. Reuters and Bloomberg reported that drone strikes damaged cloud facilities and caused outages affecting AWS operations in the UAE and Bahrain, elevating risk for multinationals who use the Gulf for latency-sensitive services, regional data residency requirements, and shared-service centres. A key operational implication is that “multi-region redundancy” is no longer a best practice; it becomes a board-level resilience requirement.
• Tourism and hospitality are vulnerable not only to demand shock but also to flight reliability and safety perception. When flight corridors are unstable, MICE travel and premium tourism can pause abruptly; the impacts then feed into retail, restaurants, and services tied to the hub economy. This is reinforced by the scale of passenger volumes through GCC hubs, especially in Dubai and Doha.
• Manufacturing risk is primarily second-order. Energy-input costs, lead-time volatility, and component availability. The IMF’s inflation-risk warning (oil-price persistence translating into global inflation) is a macro signal that manufacturing procurement and working-capital pressures can persist even if kinetic events de-escalate quickly.

Operational risk implications for multinationals

Supply chains should be treated as contracted networks under stress, rather than predictable linear routes. Lead times may change quickly where logistics depend on Gulf air corridors or shipping routes through the Strait of Hormuz. Reporting on shipping reroutes and booking suspensions already suggests that supplier on-time-in-full performance may become less predictable, requiring companies to review delivery assumptions and contingency routing.

Insurance costs are also becoming an operational constraint. When war-risk premiums rise from around 0.25 percent to roughly 3 percent of vessel hull value, voyage costs shift from a marginal surcharge to a major commercial factor. Some cargo may therefore become uneconomical to ship without repricing, with implications for Incoterms arrangements, contract pricing clauses, and cash-flow planning.

Force majeure is no longer a theoretical risk. Recent disruptions in energy and shipping markets have already led to supply interruptions and declarations affecting LNG and crude shipments. Companies should review contracts where delivery obligations depend on Gulf routes or energy-linked pricing, as force majeure protections depend heavily on contractual wording and proper notice procedures.

Staff mobility risks also increase when airspace closures or restricted flight corridors persist. Airline schedule disruptions can last longer than expected, meaning companies may need contingency plans for alternative travel hubs, temporary relocation, or immigration compliance where employees face extended travel delays.

Regulatory and sanctions exposure can also evolve quickly during periods of geopolitical tension. Financial institutions may apply heightened scrutiny to cross-border transactions, particularly in relation to AML and sanctions compliance, meaning treasury teams should expect increased payment screening alerts and possible delays in international transfers.

Strategic options and decision checklist for multinationals in the GCC

24-hour actions

Confirm employee safety and communications

Companies should activate employee check-in systems, implement travel freezes where necessary, and issue route-based risk advisories to staff. These measures should be based on official updates from aviation authorities, airport operators, and government agencies to ensure employees have accurate information on flight disruptions and regional security developments.

Stabilize core operations

Management teams should identify business functions that are highly dependent on Gulf connectivity. These may include regional treasury operations, customer support hubs, data hosting, and mission-critical suppliers. Recent infrastructure disruptions affecting digital and cloud services illustrate how assumptions about the reliability of regional infrastructure can be challenged when physical disruptions occur.

Seven-day actions

Re-map logistics and inventory flows

Businesses should develop contingency routing for critical supply chains by creating an “A/B/C lane” framework for inbound and outbound logistics. This may require renegotiating service levels with logistics providers, freight operators, and carriers to reflect shifting shipping routes, longer transit times, and higher war-risk insurance premiums.

Review treasury and liquidity exposure

Treasury teams should stress-test liquidity structures, particularly where cash management systems rely heavily on Gulf-based financial hubs. Companies with large cross-border payment flows or non-resident deposit exposure may experience volatility in liquidity conditions if financial markets tighten or payment channels slow.

Assess contractual exposure

Companies should conduct a rapid review of contracts that may be affected by regional disruption. Priority should be given to agreements involving delivery routes through the Gulf, energy-linked pricing, or strict performance obligations without explicit force majeure provisions. In many jurisdictions, force majeure protections depend on the specific wording of the contract and require formal notice procedures, meaning companies must ensure compliance with contractual notification requirements.

30-day actions

Develop a dual-hub operating model

Companies should evaluate whether key business functions, such as workforce deployment, data infrastructure, and treasury management, can operate across multiple locations. The objective is not immediate relocation but the ability to shift operations if disruptions persist. Economic and energy market indicators suggest that regional instability can have effects that extend beyond the immediate news cycle.

Strengthen cloud and data resilience

Companies relying on centralized regional data infrastructure should consider transitioning from single-location hosting models to multi-region architectures with tested failover capabilities. Physical disruptions affecting infrastructure can expose vulnerabilities in digital systems, making redundancy an increasingly important element of business continuity planning.

Update cost and pricing assumptions

Businesses should revise landed-cost models to account for rising war-risk insurance premiums, longer shipping routes, and greater supply-chain uncertainty. Commercial teams may also need to adjust contract pricing structures, including shorter quotation validity periods or routing contingencies, to manage volatility during periods of instability.

Medium-term structural responses

For most multinational companies, the strategic response is unlikely to involve abandoning the Gulf as a regional hub. The region’s core advantages—including geographic proximity to emerging markets, world-class infrastructure, and relatively business-friendly regulatory environments—remain significant.

Instead, companies may increasingly adopt a diversification approach. A practical framework is a “GCC-plus-one” model, where firms maintain their Gulf hub while developing a secondary operational base outside the most exposed transport corridors. This allows companies to retain the commercial benefits of the Gulf while reducing operational concentration risk.

Under such a model, companies ensure that key business processes, such as logistics coordination, data hosting, and treasury functions, can shift between locations without requiring a full redesign of their operating model. As global supply chains and financial networks become more sensitive to geopolitical disruption, the ability to operate across multiple hubs is likely to become an important component of corporate resilience.

Conclusion

The Gulf hub model is under stress because the conflict is targeting (or forcing shutdowns in) the hub’s enabling systems: airspace, ports/shipping insurance, energy exports, and cloud infrastructure. The critical analytical point for multinationals is that these systems interact: aviation disruption undermines cargo and mobility; shipping repricing undermines lead times and costs; energy chokepoint risk transmits into global inflation and demand; and cloud outages convert technical incidents into operational downtime.

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