Abu Dhabi, UAE – March 2026: Escalating tensions in the Middle East have sent shockwaves through global markets, pushing oil and gold sharply higher and raising fresh questions about the near-term outlook for regional equities.
Josh Gilbert, Market Analyst at eToro, said: “Markets hate uncertainty, and right now investors are facing one of the most unpredictable geopolitical backdrops in years. The key question is not just what has happened, but how long this disruption lasts and whether we see escalation or de-escalation in the coming days.”
The Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) remain closed on Monday and Tuesday in a rare move outside scheduled holidays, highlighting the seriousness of the situation. Investors are now focused on what reopening could look like once trading resumes.
“History shows that outcomes vary widely,” Gilbert added. “When Turkey suspended trading after the 2023 earthquake, markets rallied strongly on reopening. When Russia halted trading after invading Ukraine, the outcome was far more severe. For UAE markets, the next 48 to 72 hours will be critical.”
Oil in Focus:
Oil has been the immediate flashpoint. Brent crude surged as much as 13% to around US$82 per barrel, driven by fears of disruption in the Strait of Hormuz, which carries roughly 20% of the world’s crude oil and LNG supply.
“Even without a full closure of the Strait of Hormuz, disruption to tanker traffic is enough to rattle energy markets,” said Gilbert. “Conflicting signals from Iran have added to the uncertainty investors are trying to price in.”
There are, however, short-term buffers in place. The global oil market entered this period with relative oversupply, and OPEC+ had already announced a production increase of 206,000 barrels per day for April. Major consumers such as the US and China also hold substantial strategic reserves, while Saudi Arabia has pipeline capacity to reroute some exports.
“These measures provide short-term cushioning,” Gilbert noted. “But if tensions persist, sustained higher oil prices will filter through to transport costs and ultimately inflation globally.”
Gold Surges, Risk Assets Weaken:
Gold has once again acted as the clearest safe haven, climbing above US$5,350 per ounce and gaining roughly 22% year-to-date.
“Gold remains the asset investors turn to in times of geopolitical stress,” Gilbert said. “Unless we see meaningful de-escalation, that safe-haven demand is unlikely to fade.”
Meanwhile, higher-risk assets, including cryptocurrencies, have come under pressure as investors rotate toward defensive positions.
“In risk-off environments, capital typically flows to traditional safe havens rather than more volatile assets,” he added.
Direct Impact on the UAE:
For the UAE, the implications extend beyond market volatility. Real estate, tourism, aviation, and retail — key pillars of economic diversification — are particularly exposed.
Dubai averaged approximately 13,000 home sales per month last year at an average price of AED 2.5 million, largely supported by foreign investment and expatriate inflows. With around 350,000 new units expected to come to market over the next two years, any sustained hit to confidence or capital flows could challenge demand absorption.
Tourism is another critical sector. Travel and tourism accounted for around 13% of UAE GDP in 2025. With hundreds of flights cancelled and temporary airport disruptions reported, the impact is already being felt.
“Dubai’s retail and hospitality ecosystem depends on connectivity,” Gilbert said. “Any prolonged disruption to airspace or tourism confidence will weigh on near-term growth.”
While higher oil prices may offer fiscal support, the UAE economy today is far more diversified and services-driven than it was a decade ago.
“That means disrupted tourism, grounded flights, and shaken investor sentiment matter more than ever,” Gilbert explained.
Staying Focused on the Long Term:
Gilbert cautioned against reactive decision-making.
“The instinct in moments like this is to act, but for most long-term investors, doing very little is often the wiser approach. Selling into panic rarely proves to be the right decision in hindsight.”
He concluded: “There is room for volatility when UAE markets reopen, particularly as very little geopolitical risk had been priced in. However, if de-escalation emerges quickly, the long-term fundamentals of the UAE — strong infrastructure, a pro-business regulatory framework, and its role as a regional hub — remain intact. Short-term turbulence does not undo decades of structural progress.”
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