Gulf businesses prepare to show uneven impact of Iran conflict in latest earnings

Companies across the Gulf are expected to provide the clearest picture yet of how the recent conflict with Iran has affected the region's economy.

Companies across the Gulf are expected to provide the clearest picture yet of how the recent conflict with Iran has affected the region’s economy as they begin releasing their second quarter financial results this week. While some industries have managed to remain stable despite months of uncertainty, others are likely to report weaker performance after facing disruptions caused by the war.

Analysts believe the results will vary widely across different countries and sectors. Banks and property developers are expected to come under the greatest pressure as rising inflation, higher interest rates and slower business activity added to challenges that already existed before the conflict. On the other hand, telecommunications companies have largely remained steady because of long term customer contracts and consistent demand for their services.

The energy sector has experienced both setbacks and opportunities during the four month conflict. Oil and gas producers dealt with supply disruptions, but higher global energy prices helped offset some of the losses. The temporary closure of the Strait of Hormuz also pushed oil prices higher, providing additional support for exporters that were able to continue shipments.

Market experts say the second quarter will offer a more accurate picture of the war’s economic effects because it covers a full period of conflict. The first quarter only reflected the early stages, when the fighting had just begun. Industries such as tourism and aviation were among the first to feel the impact as travel slowed and regional uncertainty increased.

Economic performance has also differed from one Gulf country to another. Saudi Arabia has been less affected because it can export oil through ports on the Red Sea, reducing its dependence on the Strait of Hormuz. Oman has also performed relatively well because of its location outside the strategic waterway. In contrast, countries including the United Arab Emirates, Qatar and Kuwait remain more vulnerable because they rely heavily on the shipping route for trade and energy exports.

Although a ceasefire had raised hopes for greater stability, renewed tensions have increased concerns that economic uncertainty may continue. Analysts warn that further conflict could weaken consumer confidence and reduce demand for services, travel and retail spending across the region.

Despite the difficult conditions, oil and gas companies are still expected to report healthy earnings. Stronger crude prices have helped balance lower production in some areas affected by damage and operational disruptions. Some major energy companies have acknowledged lower domestic sales, but overall revenues are likely to remain supported by elevated global prices.

Telecommunications companies have also shown resilience throughout the conflict. Their stable customer base and essential services have helped protect earnings even as other sectors faced greater pressure. Consumer businesses have experienced mixed results. While international tourism slowed during the conflict, increased spending within local markets benefited several retailers and food delivery companies. Airline traffic has also recovered steadily and flight volumes have almost returned to normal levels.

Banks across the Gulf are expected to post modest declines in quarterly profits as weaker trade activity and reduced international travel lowered fee income. However, analysts say the region’s banking sector remains financially strong with healthy liquidity and stable funding. Some lenders have even raised interest rates on savings accounts to attract more deposits.

The real estate market has shown signs of slowing after several years of rapid growth. Property sales in parts of the United Arab Emirates have weakened as uncertainty affected investor confidence and demand from expatriates. Some developers have responded by delaying dividend payments or preserving cash to strengthen their financial position. Even so, many analysts believe large property companies remain well prepared to handle temporary setbacks because of their strong balance sheets and financial reserves.