Iran-Gulf War Disrupts Aviation and Energy

Iranian attacks early Saturday targeted multiple Gulf Arab states as Israel and the United States continued airstrikes on Iran, with no clear end to the week‑long conflict. Sirens sounded in Bahrain and explosions were reported as Iran expanded its strikes beyond Israel. Saudi Arabia said it destroyed drones headed toward its Shaybah oil field and shot down a ballistic missile aimed at Prince Sultan Air Base, which hosts US forces.

Associated Press footage showed explosions and smoke over western Tehran as Israel began what it described as a broad wave of strikes. Loud booms were also heard in Jerusalem, sending people into bomb shelters as missiles from Iran were intercepted over the city and central Israel.

Dubai International Airport, one of the world’s busiest travel hubs, suspended all flight operations after what reports described as a direct Iranian missile strike on Terminal 3. The attack injured four airport workers and generated significant smoke, prompting evacuation of terminals and grounding of commercial traffic.

Emirates and Flydubai abandoned landing attempts and diverted aircraft to neighboring countries such as Oman, while Etihad Airways also diverted dozens of flights. Global carriers including United Airlines (UAL) and Delta Air Lines (DAL) have already suspended regional routes, triggering an unprecedented shutdown across regional aviation.

The disruptions are expected to ripple through international travel and aircraft manufacturers like Boeing (BA) are being closely watched by investors as operational risks rise in the region.

US officials have warned of a forthcoming bombing campaign they say will be the most intense yet, targeting Iran’s military capabilities, leadership and nuclear program. US Treasury Secretary Scott Bessent stated the United States will launch its “biggest bombing campaign” against Iranian missile platforms and infrastructure, with operations expected to begin Saturday night.

The conflict has already seen significant Iranian leadership casualties and heavy damage within the country, according to market reports. Iran’s UN ambassador has said Tehran will take all necessary measures to defend itself, while the Islamic Revolutionary Guard Corps has dubbed its latest salvo “Operation True Promise 4.”

US President Donald Trump has ruled out negotiations with Iran except under what he called “unconditional surrender.” He said there would be no deal until such a surrender and the selection of new “acceptable” leaders. He added that after this, the US and allies would help rebuild Iran and make it economically stronger.

The administration has approved a new $151 million arms sale to Israel as the war intensifies. US officials have also said Russia is providing Iran with information that could help it target American warships, aircraft and other regional assets, although they have not found evidence that Moscow is directing Iranian operations.

The conflict has shaken global markets, with fears centered on energy supplies and disruption in the Strait of Hormuz, a key transit route for millions of barrels of oil and other goods. Traffic has largely emptied out in the area following Iranian threats to fire on any vessel entering the waterway.

Benchmark US crude rose above $90 a barrel for the first time in more than two years, and analysts cited in market reports say closure risks and strikes on oil‑rich Gulf regions could push prices higher. The United States Oil Fund is experiencing extreme volatility amid these supply concerns.

The US has offered risk insurance and naval escorts for ships in the Strait and temporarily cleared India to increase purchases of Russian oil via a 30‑day waiver. Commentators warn that prolonged disruption could have a significant inflationary impact and lead to higher interest rates, pressuring equity markets.

Major indices such as the FTSE 100 (UKX) and Nasdaq fell sharply at the start of the week as investors reacted to the fast‑moving conflict, though the FTSE 100 (UKX) had ticked higher by Friday, showing some resilience. The SPDR S&P 500 ETF has shown signs of pre‑market stress as investors seek safe‑haven assets.

In the UK, Chancellor Rachel Reeves’ spring statement was overshadowed by the Middle East crisis. She defended her economic plan as the right one and pledged to steer the country through uncertainty, pointing to easing inflation and lower borrowing costs as evidence that pressures on households have begun to ease.