eEven if the current war in the Middle East is resolved peacefully in the coming weeks, shipping in the region will likely face a new reality. In its latest weekly report, shipbroker Intermodal said that “For most of the past decade, the Gulf states have tried to coexist with Iran rather than settle the Iran problem. They have beefed up air defense, built diplomatic channels, and keep repeating the same basic formula. Contain the threat, avoid a regional war, and maintain the story of economic transformation. This approach made sense while Iran was primarily a military and political headache. It makes much less sense once Iranian retaliation starts reaching airports, ports, refineries, and facilities.” Industrial and commercial shipping across the Mediterranean At this point, the issue ceases to be just a security issue, but becomes a direct threat to the business model that these countries have spent years and hundreds of billions of dollars trying to build.
Source: Multimedia
According to Intermodal’s Head of Research Development, Yannis Parganas, “This is why the Gulf reaction now seems tougher behind closed doors than it does in public. Saudi Arabia, the UAE, Kuwait and Bahrain appear to be making the case that pressure on Iran must continue until its ability to intimidate its neighbors is measurably reduced, while Oman and Qatar remain leaning more towards a diplomatic way out. It would be too strong to say that every Gulf capital is publicly fighting for change.” The regime, but they are not. But no, it is no longer difficult to understand why some of them might conclude that a short war ending with the same Iranian missile threat and Iranian naval threat would be the worst possible outcome.
“The UAE is perhaps the most obvious case,” Mr Parganas noted. “Dubai welcomed 19.59 million overnight visitors in 2025. Dubai International Airport handled a record 95.2 million passengers, the highest annual international traffic rate ever recorded by any airport. This is no small side business. It is the core of Dubai’s identity as a hub for aviation, tourism, finance, real estate and trade. Once this safety image is shaken, the impact is immediate. March, real estate transactions were reported to fall in the UAE and Dubai has already announced a support package worth one billion dirhams, while the UAE Central Bank has allowed banks to tap up to 30 percent of reserves required to protect liquidity.
“Saudi Arabia is facing the same problem in a different way. Vision 2030 still looks huge on paper, but it is also capital-hungry and confidence-sensitive. The kingdom’s 2026 budget projects a deficit of about 165 billion Saudi riyals. The Public Investment Fund’s assets under management were $913 billion at the end of 2024, demonstrating financial strength, but not unlimited insulation. Riyadh has already achieved or stayed on track by 85%. Per cent of Vision 2030 goals, “tourism ambition has now risen to 150 million visitors per year by 2030. The problem is simple. A country that is trying to promote itself as a tourist, logistical, financial and investment destination cannot coexist comfortably with a neighbor that can repeatedly impose a war risk discount on the entire region. Saudi oil revenues have already fallen by 20 percent in 2025. Higher oil prices can alleviate this pressure, but they do not solve the deeper problem, which is the cost of living next to a permanent spoiler,” he said.
Source: Multimedia
“For shipping, the logic is even clearer,” the Intermodal analyst added. Before this war, the Strait of Hormuz carried about a fifth of global oil and LNG flows. War risk premiums have jumped from about 0.25 percent of the value of ships to as much as 3 percent in some cases. At least nine ships have already been damaged while Brent crude oil rose by almost 59 percent in March. Saudi Arabia responded by rerouting more crude through the Red Sea, with flows rising from From about 770 thousand barrels per day to 4.658 million barrels per day, this tells us two things: First, Gulf producers still have some flexibility and second, they are already behaving as if a more securitized and more fragmented export system is needed if Iran is to survive this war.
“So the working assumption is no longer just that the Gulf wants calm. Of course it wants calm. The more important point is that calm without a permanent reduction in Iranian coercive power may not be enough. If that proves to be the case, the Gulf strategy will move more in the direction of increased defense spending, tightening pressure on Iranian trade networks, tightening maritime enforcement, and more investment in alternative export routes and redundancy. Oil could pay for part of this transformation. The diversification model cannot flourish under it. For this reason, some in the Gulf argue that Mr. Parganas concluded that decisively removing or weakening the current Iranian regime may increasingly look less like ideological ambition and more like economic self-preservation.
Nikos Rousanoglou, Global Hellenic Shipping News
