Investors stay cautious amid lull in Middle East tensions

By Hulya Omur Uylas and Emir Yildirim

Investors are exercising caution over a provision lull in tensions in the Middle East before a lasting ceasefire is reached, an expert told Anadolu.

Kanat Kutluk, head of the Turkish Business Council in Dubai and Northern Emirates, said the current pause to the conflict between Israel and Iran brought some relief to investors, as developments in the region caused serious concern worldwide.

“I see this relief not as a response to a ‘lasting stability’ but as ‘risk put on hold’,” he said, mentioning that energy supply security uncertainties have been somewhat eliminated “temporarily” and inflationary pressures are expected to ease with these developments.

He said the real test to see the global economy’s fragility has yet to be concluded.

Kutluk said the first consequences of the conflict were seen in the energy sector, as the Strait of Hormuz’s importance in the conflict directly affected oil prices, which then had a domino effect on a wide range of other sectors, from industry to transportation, to agriculture, and logistics.

“This time, Gulf stocks were much more resilient than previous crises, revealing that, in my opinion, investors see this region not as a risk zone but a zone capable of managing risks, which is also important for Türkiye, as Turkish firms are getting increasingly more active in the region, especially in sectors like energy, construction, and defense,” he said.

Kutluk stressed that the United Arab Emirates’ diplomatic and economic resilience during this short but tense period of conflict showed the concrete evidence of the region’s resilience as a whole, adding that the regional economy’s development and growth will benefit from this resilience in the face of similar crises in the medium and long term.

He highlighted that the lack of panic from the governments in the region, their private sectors, and international investors demonstrated the reliability of the region’s infrastructure and management capacity.

“The Gulf region is growing in not only in the energy sector but also in finance, technology, health, and tourism today, with a more complex but balanced economic model,” he said. “The UAE’s goal of becoming the ‘New Singapore’ is based on this, and for Türkiye, this represents an important opportunity for strategic partnerships and investor confidence.”

“Every country wanting to play a role in the Middle East’s transformation needs to have economic resilience as a decisive factor, not only diplomacy,” he added.