The calculus for operating in the Gulf could be shifting — in favor of Riyadh. Ongoing strikes against ports and airports, coupled with the threat to the Strait of Hormuz, are exposing structural vulnerabilities in logistics and financial frameworks. Saudi Arabia, on the other hand, is quietly cementing its position as the region’s operational and logistical safe haven.

The result? The era of relying on a sole entry point to the Middle East is probably coming to an end. Maintaining a genuine, scaled presence in Saudi Arabia is increasingly becoming a critical requirement for business continuity, not just about appeasing government procurement mandates.

What happened

Real estate and tech in the UAE could take a hit. Dubai’s real estate engine “would face a slowdown if foreign buyers lose confidence in the safety of the location,” Ralf Wiegert, head of MENA economics at S&P Global Market Intelligence, tells EnterpriseAM. While the UAE’s rapidly growing AI sector should remain operational despite hardware supply disruptions, negative sentiment “could still impact investment decisions, notably for new projects and facilities,” Wiegert said.

Banking is also an area to watch: The UAE and Qatar are structurally “more vulnerable than the rest of the Gulf Cooperation Council to liquidity strains given their elevated reliance on both foreign liabilities for funding and interbank liabilities,” Director of Country Default and Banking Risk at S&P Alyssa Grzelak notes. Still, regional interbank offered rates do not signal significant liquidity strains.

“Saudi banks are also very resilient, and although the sector’s reliance on foreign liabilities has increased... it remains much lower than in the UAE and Qatar, and much of this has come in the form of longer-term debt, limiting immediate rollover risks,” Grzelak added.

Why this matters

No one is seeing a panicked exodus of capital or talent from Dubai or elsewhere. Most investors will take a wait-and-see approach to Middle East funding, with risks of liquidity outflows becoming more acute the longer Iranian strikes continue, Grzelak said.

BUT- The longer the disruption lasts, new facilities and fresh capital injections could start looking at Riyadh’s almost untouched infrastructure as the safer wager.

So far, the corporate response has been hesitant. “It will depend on the duration of the conflict. For now, we don’t see companies moving their activities, but opting for optional work-from-home policies,” Jaap Meijer, head of research at Arqaam Capital, tells EnterpriseAM.

The more likely scenario? Accelerating the road to the dual-hub reality. Instead of one-way capital migration, “the practical outcome is a multi-hub model: meaningful presence in both the UAE and Saudi Arabia, aligned to where demand, regulation, and talent best fit their strategy,” Meijer notes.

Companies were already setting up fully functional bases in more than one place:

  • Visa recently restructured its Middle East operations, keeping its Dubai office to oversee the UAE, Kuwait, and Qatar while opening a Riyadh-based office to manage Saudi Arabia, Bahrain, and Oman;
  • Luxury retailer Chalhoub Group recently launched a new distribution center in Riyadh while deliberately maintaining its Dubai Jafza base to strategically split inventory;
  • Jingdong Property mirrored this move, acquiring a new facility in Jafza while simultaneously developing a Grade-A warehouse in Riyadh;
  • DHL Supply Chain is executing the same playbook, funding concurrent expansions in both Dubai South and Riyadh to stay ahead of regional capacity constraints.

For these companies, a dual-hub structure is an operational ins. policy. If a bottleneck hits Jebel Ali or airspace restrictions snarl logistics in one place, having a fully functional secondary base in the other ensures regional trade doesn’t stop.

The context: Riyadh’s value proposition has been growing on its own merits following a series of market reforms.

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