Gulf Firms Brace for Mixed Q2 Results as Iran War Reshapes Regional Economy
Companies across the Gulf are expected to report uneven second-quarter earnings as the economic effects of the Iran war become more visible, with banks and real estate firms facing mounting pressure while energy and telecommunications companies show greater resilience.
Corporate earnings from Saudi Arabia, the United Arab Emirates (UAE), Qatar and Oman are expected to offer one of the first comprehensive assessments of the financial impact of the four-month conflict, which disrupted trade, fueled inflation and increased uncertainty across the region.
Analysts said banks and property developers are among the sectors most exposed to the fallout, as higher inflation, elevated interest rates and weaker consumer spending weigh on profitability. In contrast, telecommunications companies have remained relatively stable due to long-term service contracts and steady customer demand.
The energy sector experienced both challenges and opportunities during the conflict. While oil and gas producers faced supply disruptions caused by the fighting and the temporary closure of the Strait of Hormuz, higher global energy prices helped offset production losses. Analysts expect major oil and gas companies to maintain solid earnings despite operational setbacks.
“The second quarter is going to reveal the real impact of the war,” an investment analyst said, noting that first-quarter results reflected only the early stages of the conflict, which began in late February.
Economic performance has varied across the Gulf depending on each country’s reliance on the Strait of Hormuz, a vital shipping route for global energy exports. Saudi Arabia, which can also export crude through Red Sea terminals, is expected to outperform several neighboring countries, while economies more dependent on the Gulf shipping route, including the UAE, Qatar and Kuwait, face slower growth.
Renewed tensions have also increased uncertainty after the collapse of an interim ceasefire agreement, raising concerns that prolonged instability could further weaken consumer confidence, tourism and investment across the region.
Despite the challenging environment, Gulf telecommunications companies have remained resilient, while some consumer-focused businesses, including food delivery services, have benefited from stronger domestic demand as more people stayed home during the conflict. Airline traffic has also largely recovered to pre-war levels.
Meanwhile, banks across the region are expected to report modest declines in quarterly profits as weaker trade activity and reduced international travel cut fee income. Analysts said the sector remains financially sound, supported by strong liquidity and stable funding.
The real estate sector, particularly in the UAE, has shown signs of slowing after years of rapid growth. Property sales in Dubai and Abu Dhabi declined during the second quarter, prompting some developers to delay dividend payments and conserve cash amid continued geopolitical uncertainty.
Although market conditions remain fragile, some investment analysts believe regional credit markets have stabilized, suggesting investors remain cautiously optimistic despite the ongoing risks.
The upcoming earnings season is expected to provide investors with a clearer picture of how the conflict has reshaped the Gulf’s economic landscape and which sectors are best positioned to withstand prolonged geopolitical uncertainty.
