Plumes of smoke clouded Dubai for hours yesterday as a strike hit a fuel tank in Dubai International Airport (DXB), while attacks across the UAE weighed heavily on the country. Our airspace seemed to take a step back after having briefly gotten off its feet.

One death was reported in Abu Dhabi, after a missile struck a civilian vehicle in Al Bahyah. Authorities in Abu Dhabi said the incident killed one Palestinian national, according to state news agency Wam.

In Umm Al Quwain, a building was targeted by a drone strike, triggering a fire, though no injuries were reported, Wam reports.

Airspace closed and re-opened

The UAE temporarily closed its airspace as a precautionary measure early this morning, as the General Civil Aviation Authority (GCAA) aims to “[ensure] the safety of flights and air crews, and [safeguard] the UAE’s territory,” Wam reports. Airspace was re-opened later after “the stabilization of the situation,” Wam reports, citing the GCAA.

BEFORE THAT- The strike on DXB briefly pushed Dubai’s flight schedule back into disruption mode, after a fire broke out and was later contained by civil defense teams, Wam reports. The Dubai Civil Aviation Authority (DCAA) suspended flights yesterday morning as a precaution before gradually restoring selected routes later in the day. No injuries were reported. This was the third attack affecting the airport since the war began.

The setback came just as the air front had started straightening itself out. Flight volumes had begun to edge back after weeks of disruption, with Emirates said to have returned to over half of its former capacity, according to Flightradar24 data cited here.

Airlines adjusted fast:

  • Emirates shifted to a limited Dubai schedule after 10am, with some flights diverted to Al Maktoum International Airport, others rerouted inland, and several inbound services forced to turn back — a sharp interruption after the carrier had just logged its busiest day since the war began at roughly 70% of pre-conflict capacity;
  • Egyptair cut its Dubai service back to one daily flight instead of two until further notice, following airport instructions to reduce traffic.

We could be looking at further disruptions after the DCAA reportedly suspended landing permissions for foreign operators at DXB and Al Maktoum Airport until further notice.

The fare impact is now traveling with it: Airfares across the UAE and wider GCC could run as much as 30% higher than usual, as fuel surcharges rise alongside oil and jet fuel costs ahead of Eid travel, Khaleej Times cites aviation analyst Saj Ahmad as saying. “That is not a market fluctuation; it is a structural dislocation,” commodities analyst James Noel-Beswick said, noting jet fuel has jumped to USD 190 / bbl from roughly USD 91. Airlines will keep lifting fares as long as war uncertainty keeps operating costs elevated, especially on heavy Gulf routes like London, New York, Mumbai, and Riyadh, Ahmad added.

But many seats on inbound flights are empty: Emirates is seeing a significant drop in occupancy on certain Dubai-bound routes as regional tensions cause travelers to avoid the Arabian Gulf, according to data from the flag carrier reviewed by Bloomberg. Flights from the US and Europe are seeing the biggest impact, with occupancy as low as 5-10% from cities like Prague or Budapest.

Demand for flights out of Dubai, though, is very high, with planes returning to the emirate nearly empty to ferry passengers out, the data shows. The airline is also contending with several thousand no-shows everyday on outbound flights.

Cargo can fill the gap, somewhat: Emirates is maximizing its cargo operations to compensate for empty seats, with a focus on importing perishable goods. This can work towards alleviating the disruption of the region’s food imports by the near-closure of the Strait of Hormuz.

Citi has also swapped out “temporary” for “indefinitely”

Citibank is keeping most of its UAE branches and offices shut until further notice after initially planning to reopen yesterday, Reuters reports, citing a customer notice. Only its Citibank Mall of the Emirates Branch remains open — and on reduced hours.

IN CONTEXT- The extension comes barely a day after Citi said its UAE operations were physically unaffected and that it had no plans to leave the region. Still, the direction of travel was already clear — as we’ve covered, staff stayed remote and clients were shifted to digital channels after the temporary closure of local branches. This came after Iran had threatened US banks and tech companies last week, with DIFC seemingly targeted over the weekend.

Fujairah keeps getting reminded why geography matters

A drone strike hit the petrochemicals area near Port of Fujairah again yesterday, triggering a fire and forcing oil loadings to pause while damage is assessed, Bloomberg reports, citing people it says are familiar with the matter. Wam later said civil defense teams were deployed to contain the fire in the Fujairah Oil Industries Zone, with no injuries reported. A second fire broke out in the zone in the early hours of this morning after yet another drone attack.

The disruption is the port’s second shutdown in three days. Loadings had only just resumed over the weekend after a previous drone strike set part of the complex ablaze on Saturday, before the latest attack forced another precautionary suspension.

Abu Dhabi National Oil Company (Adnoc) suspended all crude loading operations at the port after one of the state oil giant’s crude terminals was struck in the attack, Reuters reports, citing a source it says is in the know.

Why this matters: Fujairah is not just another port — it’s the UAE’s main oil outlet outside the Strait of Hormuz, the terminal for Murban crude, and one of the few Gulf routes still designed to bypass the chokepoint when the strait becomes the story.

Which is why every fresh halt there lands louder than the fire itself. Oil is already above USD 100 / bbl, and Fujairah’s repeated disruptions are starting to test one of the region’s few remaining logistical advantages.

ALSO- The latest hit to our oil exports: Operations were suspended at the Shah oil field — the largest of its kind worldwide — while officials assess the damage from a drone strike, which resulted in a now-contained fire. The high-sulfur gas field — located southwest of Abu Dhabi — is jointly operated by Adnoc and Texas-based Occidental Petroleum.

Daily oil output has been cut by more than half, as Adnoc started implementing widespread production shut-ins, two sources told Reuters. The temporary well closures hit both onshore and offshore fields, with offshore production now fully offline.

The cuts are spreading across the region: Saudi trimmed production by some 20% and Iraq by roughly 70%. Analysts estimate Middle East supply cuts now stand at 7-10 mn bbl / d, equivalent to 7-10% of global demand.

What this means: Oil markets usually price risk around tankers and trade routes, not the wells themselves. With Hormuz shut, producers are running into a hard physical limit as crude that can be exported has nowhere to go, forcing operators to shut in production.

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