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  US-Israel attack on Iran incurs heavy regional price

  5 March 2026

  

   

  The joint US-Israeli military campaign against Iran, launched on 28 February under operations codenamed Epic Fury and Operation Roaring Lion, has pulled the GCC into the most destabilising regional confrontation in a generation.

  Six days into the crisis, the scale of collateral damage to Gulf capitals is becoming fully visible in damaged infrastructure, grounded aircraft, shuttered ports, halted energy production and a darkening investment climate.

  Every member of the GCC has absorbed Iranian missile or drone strikes, despite none having launched offensive operations against Tehran.

  In contrast to the restrained signalling from Iran during the 12-day war in June 2025 – when it choreographed its Gulf retaliation to a single base in Qatar – this campaign represents a deliberate effort to punish the US and states harbouring its assets.

  By 4 March, Iran had fired 186 ballistic missiles at the UAE alone, according to the UAE Ministry of Defence, with all but one intercepted, but with lethal debris falling across Abu Dhabi and Dubai. Of 812 drones launched toward the UAE, 57 made impact.

  Across the Gulf, however, the overall damage tallied so far is stark, particularly at US military bases. Iranian volleys have been directed with special intensity at the US Navy’s 5th Fleet headquarters in Bahrain and the Al-Udeid airbase in Qatar, alongside every US airbase and associated radar and satellite communications system across the region.

  Strangled logistics

  The Strait of Hormuz – the 33-kilometre-wide channel between Iran and Oman – was also declared closed to traffic by the Islamic Revolutionary Guard Corps (IRGC) the same day the US-Israeli attacks began.

  Closing the strait, through which approximately 20 million barrels of crude oil pass every day, has been a perennial Iranian threat, and now Tehran is making good on it.

  The strait is the sole maritime exit for much of the energy exported from the Gulf states, making up around a fifth of all seaborne oil traded globally in total.

  At least five vessels have been struck so far in enforcement of the blockade, but the real impediment to ships is now the withdrawal of war risk cover by insurance underwriters – leaving ships inside and outside of the strait stranded.

  Oil prices have responded accordingly, with Brent crude rising above $80 a barrel – up from closer to $60 – and with analysts placing $100 a barrel firmly back on the table if the disruption runs for more than a few weeks.

  LNG shutdown

  If the Hormuz closure has convulsed oil markets, the direct attack on Qatar’s energy infrastructure has delivered a separate and arguably more structurally significant blow.

  Iranian drones struck QatarEnergy’s facilities at both Ras Laffan Industrial City and Mesaieed Industrial City, forcing a complete halt to all liquefied natural gas (LNG) production and associated output.

  Qatar, which operated 14 LNG trains with a combined annual capacity of 77 million tonnes – accounting for roughly 20% of global LNG trade – now operates none. Doha, incensed, has cut ties with Iran.

  European benchmark gas futures meanwhile jumped almost 50% within hours of the announcement. Asian LNG spot prices rose by more than a third. Country-level squeezes have been even harder, with gas prices spiking by 93% in the UK, for example.

  Qatari production had been filling the void left in Europe by its boycott of Russian gas, so its halting of production now places European energy stocks under significant stress. Asian buyers, including Bangladesh, India and Pakistan, will also be feeling the strain.

  Regional trade risk

  The same war risk exclusions that have grounded the tanker fleet apply with equal force to container shipping, bulk carriers and general cargo vessels – extending the disruption beyond energy into every category of goods that moves through Gulf ports.

  And the ports themselves are also in jeopardy. Jebel Ali in Dubai – the region’s busiest port – was temporarily closed after fire broke out from debris falling from missile interceptions overhead. Other regional ports have also seen various suspensions.

  The world’s major container carriers have also drawn their own conclusions. MSC, Maersk, Hapag-Lloyd and CMA CGM have all halted Hormuz crossings entirely.

  Importers across the Gulf – a region that is overwhelmingly dependent on seaborne trade for food, consumer goods, construction materials and industrial inputs – face costly re-routing.

  Vessels are discharging Gulf-bound containers at Salalah in Oman, Khor Fakkan, Sohar and Duqm, from where onward delivery might be arranged overland. Spot freight rates for Gulf-destined cargo are in turn rising sharply as feeder capacity is overwhelmed.

  Travel under assault

  The Gulf’s aviation hubs have also been brought to a relative standstill.

  A drone strike on Dubai International, the busiest airport on earth for international travel, was the most dramatic incident, but several airports have been hit and sweeping airspace closures have grounded all but a handful of flights over the Gulf.

  On the worst day so far, more than 1,500 flights to or from Middle Eastern destinations were cancelled. The broader long-haul linkage through the Gulf from Europe to Asia has also been severed, forcing international legs to reroute away from the Gulf corridor.

  Drone and shrapnel strikes on luxury hospitality projects in the region have meanwhile dealt a heavy blow to the GCC’s touristic safe-haven status. The region’s busy meetings, incentives, conferences and exhibitions (MICE) calendar is in disarray.

  Gulf tourism entered 2026 in a strong position. Regional travel bookings had reached close to $101bn – 23% above pre-pandemic levels. Luxury hotel occupancy across Dubai, Abu Dhabi, Doha and Riyadh had set successive records through the first two months of the year. That momentum has been destroyed inside of a week.

  Tourism Economics projects a fall in Middle East travel arrivals of around 11% year-on-year even in an optimistic scenario where the conflict resolves within weeks – meaning 23 million fewer visitors and a $34bn contraction in tourism spending.

  If the conflict runs for two months, the projected decline steepens to 27%, with up to 38 million lost arrivals and $56bn in foregone receipts.

  Long-term risks

  The IMF had projected GDP growth of about 4% across the six GCC economies in 2026, driven substantially by non-oil diversification and fuelled by sustained inflows of foreign capital, foreign talent and foreign visitors.

  Each of those flows is now disrupted, and some portion of the disruption will outlast the immediate security situation. Businesses could also restructure themselves to mitigate for elevated scenario of future regional risk.

  The GCC states find themselves in a position of extraordinary and largely undeserved exposure. They did not initiate this conflict, and several of them invested heavily in diplomatic outreach and mediation between concerned parties.

  The region is nevertheless absorbing the consequences.

  The preferred Gulf instruments of mediation, back-channel diplomacy and economic persuasion have been rendered irrelevant by the speed and scale of events.

  The region’s airlines, ports, refineries, LNG complexes, hotels, conference centres, stock exchanges and carefully constructed global image are all paying a price set by decisions made elsewhere. And the bill is still running.

  Investors will reassess, and the governments of the GCC now face the question of how to restore peace and order in a region being actively contested militarily by the US.

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  READ THE MARCH 2026 MEED BUSINESS REVIEW – click here to view PDF

  Riyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.

  Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:

  > AGENDA: Saudi Arabia’s private sector picks up the baton > RAMADAN: Data disproves the Ramadan slowdown story > INDUSTRY REPORT: Chemicals producers look to cut spending > INDUSTRY REPORT: Global petrochemical project capex set to rise until 2030 > MARKET FOCUS: Egypt’s crisis mode gives way to cautious revival > LEADERSHIP: Delivering Saudi Arabia’s next phase of rail growth > POWER: Lessons learnt from a power plant decommissioning > INTERVIEW: Abu Dhabi’s Enersol charts acquisitions path > INTERVIEW: Lina Noureddin, CEO of Lamar Holding, on the evolving PPP landscape > INTERVIEW: Contract award marks Metito’s return to municipal projects

  To see previous issues of MEED Business Review, please click here

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  John Bambridge
• 
  Egypt strengthens its economic position

  4 March 2026

  Download the PDF

  

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  MEED’s March 2026 report on Egypt includes:

  > COMMENT: Egypt’s crisis mode gives way to cautious revival
  > GOVERNMENT: Egypt adapts its foreign policy approach
  > ECONOMY & BANKING: Egypt nears return to economic stability
  > OIL & GAS: Egypt’s oil and gas sector shows bright spots
  > POWER & WATER: Egypt utility contracts hit $5bn decade peak
  > CONSTRUCTION: Coastal destinations are a boon to Egyptian construction

  To see previous issues of MEED Business Review, please click here

   

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  MEED Editorial
• 
  Power and water assets face strategic risk amid Iran attacks

  4 March 2026

  

   

  Recent attacks on energy infrastructure across the GCC have drawn renewed attention to the strategic importance of the region’s power and water sector.

  On 2 March, Qatar’s Ministry of Defence announced that the country had come under two drone attacks launched from Iran.

  One drone targeted a water tank owned by Mesaieed Power Plant, while another targeted a power facility in Ras Laffan Industrial City.

  Elsewhere in the region, Saudi Aramco shut down its Ras Tanura refinery following a drone strike, while US cloud provider Amazon Web Services reported service outages after incidents at two data centres in the UAE.

  Desalination reliance

  Across the GCC, desalination now provides the majority of drinking water. In Kuwait, about 90% of potable water comes from desalination plants, while the figure is about 70% in Saudi Arabia. In the UAE and Oman, the figures are 42% and 86%, respectively. While the geopolitical narrative tends to be dominated by oil, it is power and water infrastructure that is perhaps most critical to everyday life.

  For instance, the Ras Al-Khair desalination plant in Saudi Arabia is among the largest operational facilities of its kind. According to MEED Projects, the plant produces about 1.1 million cubic metres a day (cm/d) of desalinated water.

  Using a typical domestic water consumption benchmark of roughly 250 litres per person per day, that output is sufficient to supply potable water for around four million people.

  Other large projects operate on a similar scale. The Yanbu phase 3 desalination plant produces roughly 550,000 cm/d, while the Shuaibah 3 independent water project (IWP), commissioned near Jeddah last year, has a capacity of 600,000 cm/d. Facilities of this scale can supply drinking water to populations of between two million and four million people.

  The region’s reliance on large coastal desalination facilities also creates structural vulnerabilities, as most plants are located along the Gulf coastline to allow seawater intake.

  Many are also integrated with thermal power plants, producing electricity and desalinated water at the same site. This configuration offers operational efficiencies, but concentrates critical infrastructure in a limited number of locations.

  In February, Kuwait signed a 25-year energy conversion and water purchase agreement for the Al-Zour North independent water and power plant (IWPP) phases two and three. Once completed, the facility will add 2,700MW of power and 545,000 cm/d of desalinated water to Kuwait’s supply network

  Separately, Kuwait’s Council of Ministers recently approved plans for the Kuwait Authority for Partnership Projects (Kapp) to tender the first phase of the Nuwaiseeb power and water desalination plant as an IWPP project. The first phase of the scheme will have an estimated power generation capacity of 3,600MW and a desalination capacity of 341,000 cm/d.

  While several GCC states maintain strategic water storage reserves, these typically cover only a limited number of days of consumption in major cities. This makes water infrastructure one of the most sensitive categories of critical assets in the region.

  Electricity infrastructure

  Standalone electricity infrastructure is equally central to the functioning of GCC economies. Power generation supports residential demand, large industrial complexes, transport networks and digital infrastructure.

  One example is the UAE’s Barakah nuclear power plant in Abu Dhabi, which has a total capacity of 5.6GW across four reactors. According to Emirates Nuclear Energy Corporation (Enec), the plant’s four APR1400 reactors produce 40TWh annually, which is equivalent to around 25% of the UAE’s electricity needs.

  At the same time, Gulf electricity systems are becoming increasingly interconnected. The GCC Interconnection Authority grid links the national networks of member states and enables countries to exchange electricity during periods of peak demand or supply disruption.

  According to WorldBank studies, desalination plants typically operate continuously because water storage capacity is limited relative to demand. Similarly, power grids must balance supply and demand in real time.

  Amid ongoing missile and drone attacks on GCC states, Iran said on Monday that it was closing off the Strait of Hormuz, a critical maritime route. GCC countries import roughly 85% of their food, much of it transported by sea, while the strait handles about a fifth of global oil supply. Disruptions to power and water infrastructure across the region could have even more immediate consequences.

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  READ THE MARCH 2026 MEED BUSINESS REVIEW – click here to view PDF

  Riyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.

  Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:

  > AGENDA: Saudi Arabia’s private sector picks up the baton > RAMADAN: Data disproves the Ramadan slowdown story > INDUSTRY REPORT: Chemicals producers look to cut spending > INDUSTRY REPORT: Global petrochemical project capex set to rise until 2030 > MARKET FOCUS: Egypt’s crisis mode gives way to cautious revival > LEADERSHIP: Delivering Saudi Arabia’s next phase of rail growth > POWER: Lessons learnt from a power plant decommissioning > INTERVIEW: Abu Dhabi’s Enersol charts acquisitions path > INTERVIEW: Lina Noureddin, CEO of Lamar Holding, on the evolving PPP landscape > INTERVIEW: Contract award marks Metito’s return to municipal projects

  To see previous issues of MEED Business Review, please click here

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  Mark Dowdall
• 
  Algeria tenders multiple railway consultancy contracts

  4 March 2026

  Algeria’s state railway company, Agence Nationale d’Etudes et de Suivi de la Realisation des Investissements Ferroviaires (Anesrif), has tendered several consultancy tenders for various railway schemes in the country.

  The first tender was issued for the study of the new Bouinane/Meftah/Khemis El-Khechna railway line.

  The tender was issued on 3 March, with a bid submission deadline of 12 April.

  The second tender covers the detailed study of the Sidi Arcine railway station.

  The tender for the project was floated on 1 March. The bid submission deadline is 30 March.

  The other tender covers the completion of the study of the Zeralda/Gouraya railway line.

  The notice was floated in late February, with a bid submission deadline of the end of March.

  The latest consultancy tenders follow Anesrif’s formal start of the procurement process for its multibillion-dollar Laghouat-Ghardaia-El-Meniaa railway project, as MEED reported earlier this week.

  International and local firms have been given until 8 March to submit expressions of interest for the overall client’s engineer role on the 495-kilometre-long railway development.

  Consultancies have also been given until 12 March for two separate contracts covering the project supervision and control of the first 265km-long element between Laghouat and Ghardaia, and the 230km-long line between Ghardaia and El-Meniaa.

  This Laghouat-Ghardaia section, which is estimated to cost about $1.4bn, will comprise 21 viaducts, one tunnel, 55 pipe crossings and five stations.

  The 230km-long Ghardaia to El-Meniaa second section will start at Metlili station and extend south to El-Meniaa. It will comprise six viaducts, 35 railway structures and three stations, and have an estimated total construction cost of about $1.2bn.

  The speed of passenger trains on the railway will be 220 kilometres an hour (km/h) and 100km/h for freight trains.

  The solicitations of interest for the construction of the two sections were originally scheduled for February, but to date have not been released.

  ---

  READ THE MARCH 2026 MEED BUSINESS REVIEW – click here to view PDF

  Riyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.

  Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:

  > AGENDA: Saudi Arabia’s private sector picks up the baton > RAMADAN: Data disproves the Ramadan slowdown story > INDUSTRY REPORT: Chemicals producers look to cut spending > INDUSTRY REPORT: Global petrochemical project capex set to rise until 2030 > MARKET FOCUS: Egypt’s crisis mode gives way to cautious revival > LEADERSHIP: Delivering Saudi Arabia’s next phase of rail growth > POWER: Lessons learnt from a power plant decommissioning > INTERVIEW: Abu Dhabi’s Enersol charts acquisitions path > INTERVIEW: Lina Noureddin, CEO of Lamar Holding, on the evolving PPP landscape > INTERVIEW: Contract award marks Metito’s return to municipal projects

  To see previous issues of MEED Business Review, please click here

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  Yasir Iqbal
• 
  Conflict has limited impact on GCC projects

  4 March 2026

  

   

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  The conflict in the Gulf has so far had a limited impact on projects in the GCC, with most sites operating normally since hostilities began on 28 February. In total, there are 6,738 projects under execution across the GCC, with a combined value of $951bn, according to regional projects tracker MEED Projects.

  Contracting companies in the region say that the majority of their projects have not been affected by the conflict, and work has continued onsite without disruption. However, a few sites have temporarily halted operations, either at the request of the authorities or because they were considered at risk due to their strategic locations.

  “Work has continued on our projects in Dubai. We have only one site where we were asked to stop work,” says a contractor overseeing projects across Dubai.

  Another contractor operating across the UAE has also continued work but halted operations at one site following a nearby security incident. “We have one site that was close to a facility that was struck by debris, so we stopped work,” the contractor says.

  Work has also continued on projects outside of the UAE. In Saudi Arabia and Qatar, contractors continue to work on projects, including strategically sensitive oil and gas projects. “We have continued work on most of our projects. There are a few sites where we have been asked to stop work, but this is the minority, and at most sites we are still working,” says an international contractor.

  Supply chain concerns

  While operations largely continue as normal, there are concerns that projects could be impacted later due to supply chain disruption. Ports in the region have been targets, and with international shipping passing through the Strait of Hormuz effectively stopping, there is an expectation that international shipments will be delayed. A related concern is the sharp spike in oil prices that will be inflationary.

  How the disruption is handled will depend on the terms of specific contracts and on how companies choose to navigate the issue. The general consensus among contractors and lawyers is that it is not a force majeure event. Instead, it is general disruption that should be noted and documented, should there be cost or time implications later in the project.

  One Dubai-based contractor said the strategy for now is to support clients as best as possible amid this uncertainty, while noting that there may be cost implications later.

  The region has been considered a safe place for tourism, and also for the rich to live in a tax-free haven. The attacks on Dubai may change that perception, and that will impact the market in the future
  International contractor

  Future prospects

  There are also concerns about the market’s future. There have been record levels of contract awards in recent years, and the worry is that the pace of contract awards may slow as uncertainty grips the market.

  At the same time, some contract awards have been expedited. One Dubai-based contractor has signed two contracts since the conflict started. “We have signed deals that had been lingering for a while. I think the logic is that the client wants to lock in resources before prices or anything else changes,” says the contractor.

  Longer term, it is expected that priorities for construction could shift. Contractors say that defence will become more of a priority for governments in the future, and so will strategic infrastructure projects such as power and water.

  There might also be increased interest in making infrastructure more secure, which will add an additional layer of complexity for construction companies. “Facilities like data centres may be located underground in the future to protect them from attacks,” says a UAE-based contractor.

  The outlook for other sectors is more challenged, particularly real estate and tourism.

  “The region has been considered a safe place for tourism, and also for the rich to live in a tax-free haven,” says the international contractor. “The attacks on Dubai may change that perception, and that will impact the market in the future. Tourism is a key component of national visions across the GCC, so I think there will have to be a rethink of economic strategies for the future.”

  ---

  READ THE MARCH 2026 MEED BUSINESS REVIEW – click here to view PDF

  Riyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.

  Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:

  > AGENDA: Saudi Arabia’s private sector picks up the baton > RAMADAN: Data disproves the Ramadan slowdown story > INDUSTRY REPORT: Chemicals producers look to cut spending > INDUSTRY REPORT: Global petrochemical project capex set to rise until 2030 > MARKET FOCUS: Egypt’s crisis mode gives way to cautious revival > LEADERSHIP: Delivering Saudi Arabia’s next phase of rail growth > POWER: Lessons learnt from a power plant decommissioning > INTERVIEW: Abu Dhabi’s Enersol charts acquisitions path > INTERVIEW: Lina Noureddin, CEO of Lamar Holding, on the evolving PPP landscape > INTERVIEW: Contract award marks Metito’s return to municipal projects

  To see previous issues of MEED Business Review, please click here

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  Colin Foreman