The dramatic spike in geopolitical instability in the Middle East following US and Israeli attacks on Iran, has left corporates in the region scrambling to juggle the complex repercussions alongside safeguarding their employees and staff. For one corporate treasurer on the ground, preparation and operational resilience have proven key.
“Corporates that pre ran downside scenarios can update assumptions and act faster than those building models in flight,” a Dubai-based treasurer with a financial services group tells Treasury Today, speaking off the record.
He lists his near term priorities as ensuring operational resilience including safeguarding payments continuity via multiple online banking rails as opposed to manual processing; cash visibility in line with the group’s 13-week rolling forecast, and system uptime. Here he is particularly focused on safeguarding the company’s cloud solutions following the recent disruption, ensuring ongoing support for remote work and agile decision making.
Earlier this week Amazon Web Services (AWS), the cloud unit of Amazon, reported outages and disrupted power/connectivity at data centres in Bahrain and the UAE impacting banking operations in a flurry of headlines that included banks and law firms pausing deal-making, slowing potential cross-border M&A, energy financing and infrastructure deals. The Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) temporarily closed trading and hospitality and travel names including Dertour and TUI Cruises cancelling or rerouting trips across the Middle East.
Preparation also includes readying for a more acute downside, should the conflict escalate further. For the treasurer at the financial firm, this includes shoring up liquidity as well as preparing for inflation and more expensive borrowing. For example, he tells Treasury Today he is prepared to revisit commercial agreements to protect against input cost inflation, accelerate workingcapital optimisation and release trapped cash. Other ways to recalibrate liquidity could include lifting cash buffers and shortening the duration on investments, he adds.
“Should conditions point to a severe downturn, we may even look into pre emptive facility draws to secure access before credit conditions devolve toward a force majeure, when lenders may restrict availability. But for now, these are only options under evaluation, not actions underway.”
A potential hike in borrowing costs is also on his radar. “The market reaction has been relatively contained, as risk premium had already been partially priced in, but conditions remain fragile. The path from here hinges on conflict duration and inflation pass through, which could lift funding costs and term premia, particularly on the long end of the curve, likely undermining the rate cut narrative for 2026.”
Corporates are also preparing for a hike in oil prices and supply chain disruption. Turmoil in shipping routes around the Gulf has impacted both oil and gas flows out of the Gulf through the Strait of Hormuz, and global container cargoes. Shipping lines including Maersk, Hapag-Lloyd, and CMA CGM are diverting vessels away from the shorter Red Sea/ Suez Canal route to the Cape of Good Hope to prioritise the safety of their ships, crew and cargo. Meanwhile, the spike in insurance costs has raised transport costs for regional trade, and logistics firms are scrambling to manage air and sea disruptions and adjust transit routes.
The disruption to container shipping could mean cargoes get dropped in alternative ports, flags Peter Sand, Chief Analyst at shipping consultancy Xeneta. “There is no viable alternative to getting containers in or out of ports such as Jebel Ali by ocean, if the Persian Gulf is off limits. Carriers will instead omit these calls on east-west services and drop boxes at a least-worst alternative port for onward transportation by road,” he says.
Hike in oil and gas prices; India and China to feel the pinch
Around 15% of the world’s oil and gas flows through the Strait of Hormuz, the narrow waterway at the mouth of the Gulf.
“The loss of these exports to the global oil market will be significant; the key question is how long before vessels are free to re-establish export flows,” writes Wood Mackenzie, in a research note that warns the impact could be far greater than after Russia invaded Ukraine.
“In the early days of the Russia/Ukraine conflict, the market’s fear of the potential loss of three million barrels per day (b/d) of Russian exports drove the oil price northwards. In this conflict, the stakes are higher still with 15 million b/d of Gulf crude and product exports under threat.”
A halt in LNG flows through the Strait of Hormuz will be just as impactful to global gas and LNG markets, continues Wood Mackenzie. Around 81 Mt (110 bcm) of LNG transited the Strait in 2025 – primarily from Qatar, accounting for nearly 20% of global LNG supply with most of these volumes destined for Asian markets.
India relies on Qatar for more than 45% of its LNG supply, while 30% of China’s imports come from the Gulf state, according to Kpler, an energy data firm. The loss of Qatari supplies could force Asian buyers into competition with Europe for the LNG cargoes they have become increasingly reliant on as a means of replacing Russian supplies.
China will also be impacted by any strikes on Iranian exports, conclude analysts at ING. “In terms of potential impact, there have already been unconfirmed reports of strikes on Iran’s Kharg Island, where basically all of Iran’s oil is exported from. This would be in the region of 1.5m b/d of oil, which goes predominantly to China.”
