Gulf companies are preparing to report second-quarter earnings this week, offering investors the clearest picture yet of how the four-month Iran war has affected businesses across the region. The conflict disrupted trade, energy production, tourism and financial markets while raising inflation and borrowing costs, although its impact has varied widely depending on industry and geography.
With the ceasefire under renewed strain following fresh U.S.-Iran hostilities, investors will closely watch corporate results for signs of lasting economic damage and whether businesses expect conditions to stabilize in the second half of the year.
Earnings to reveal the war’s financial impact
Analysts expect second-quarter results to capture the first full reporting period affected by the conflict, unlike first-quarter earnings, which reflected only the early stages of the war.
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“The second quarter is going to reveal the real impact of the war,” said Tariq Qaqish, deputy CEO at advisory firm FH Capital.
He said first-quarter earnings had only hinted at the pressure facing sectors such as tourism and aviation, while the latest results should provide a more comprehensive assessment.
Geography creates winners and losers
The economic impact has differed sharply depending on countries’ reliance on the Strait of Hormuz, through which much of the Gulf’s oil and gas exports normally pass.
Saudi Arabia, which can export crude through Red Sea terminals as well as the Gulf, has been relatively insulated. HSBC forecasts the Saudi economy will grow by 2.1% this year.
Oman has also fared comparatively well because it lies outside the Strait of Hormuz, with its stock market outperforming many regional peers.
By contrast, the United Arab Emirates, Qatar and Kuwait remain more vulnerable because much of their energy exports depend on the strait, which was partially closed during the conflict and remains exposed to renewed security risks.
Those concerns intensified after U.S. President Donald Trump declared this week that the interim agreement with Iran was “over” following fresh attacks on U.S. military bases in the Gulf.
Analysts say continuing geopolitical uncertainty could keep investors cautious.
“A further confidence shock would exacerbate risk for companies exposed to consumer and service demand,” S&P Global Ratings said.
Energy firms balance disruption with higher prices
Energy companies experienced operational disruption during the conflict but also benefited from significantly higher oil and gas prices.
HSBC has raised its 2026 Brent crude forecast to $95 per barrel and estimates average second-quarter prices reached $114 per barrel, helping offset production losses.
Saudi Arabia continued exporting oil through Red Sea infrastructure despite disruptions around Hormuz.
The UAE’s gas sector, however, faced greater operational challenges. ADNOC Gas has projected roughly a 19% year-on-year decline in domestic gas sales after an incident at one of its facilities during the conflict.
Telecoms remain among the strongest performers
Telecommunications companies have proved more resilient than many other sectors.
Analysts say operators such as Saudi Arabia’s STC and Mobily, together with the UAE’s e&, have been protected by long-term customer contracts and relatively stable demand despite the regional turmoil.
Unlike consumer-facing industries, telecom revenues have been less sensitive to the economic slowdown.
Consumer businesses show mixed performance
Retailers, restaurants, tourism operators and airlines experienced varying fortunes during the conflict.
Travel demand weakened during periods of heightened fighting, although Gulf airline operations have largely returned to normal.
Some businesses benefited from consumers spending more at home.
Dubai-based food delivery platform Talabat has seen its share price rise by more than 60% over the past three months, reflecting strong domestic demand despite broader economic uncertainty.
Banks expected to report weaker profits
Banks across the Gulf are forecast to post modest declines in second-quarter earnings compared with the previous quarter.
Elena Sanchez-Cabezudo, head of financials equity research at EFG Hermes, expects profits to fall by single-digit percentages as trade finance activity, international travel spending and related banking fees weakened during the conflict.
Even so, analysts say Gulf lenders remain financially strong.
S&P Global Ratings said regional banks continue to enjoy stable funding profiles and ample liquidity, although prolonged geopolitical uncertainty could slow future lending growth.
Some UAE banks have also attracted additional deposits by offering higher interest rates to savers.
Property market loses momentum
The Gulf’s booming property market has also begun showing signs of strain.
Analysts say uncertainty surrounding the conflict has weighed on expatriate arrivals, tourism and investor confidence, particularly in the UAE.
Citi reported that Dubai residential property sales during the second quarter fell significantly below pre-war levels, while Abu Dhabi also experienced weaker activity.
Some developers have responded by reducing or delaying dividend payments to preserve cash.
Nevertheless, not all analysts expect lasting damage.
Francesc Balcells, chief investment officer for emerging market debt at FIM Partners, said developers generally maintain strong balance sheets capable of absorbing temporary shocks.
“It is just an issue of balance sheets,” he said. “These guys have very strong balance sheets. So they can withstand big shocks like this.”
Future outlook
Second-quarter earnings are expected to offer the clearest assessment yet of how the Iran war has reshaped the Gulf economy. While higher energy prices have supported oil and gas producers and telecom companies have remained resilient, banks, property developers and consumer-facing businesses continue to face pressure from weaker confidence, disrupted trade and elevated geopolitical risks. Much will depend on whether tensions between the United States and Iran ease in the coming months, as another escalation around the Strait of Hormuz could prolong uncertainty and weigh further on regional growth and corporate investment.
With information from Reuters.
