UAE Stays Safe But Prices May Rise Amid Israel-Iran Conflict

Despite the ongoing Israel-Iran conflict, the UAE remains a safe and stable place to live and work. Authorities have confirmed that residents won’t be directly impacted by the military escalation. However, there may be some indirect effects in the form of rising prices, particularly in petrol, gold jewellery, airfares, and consumer goods imported from countries involved in the conflict.

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Petrol Prices Expected to Rise in July

Oil prices surged after Israel launched strikes on Iran last Friday, triggering fears of supply disruptions. Over the weekend, both countries targeted each other’s oil storage facilities, pushing global oil prices up by nearly 14%.

West Texas Intermediate (WTI) and Brent crude closed at $72.98 and $74.23 per barrel, reflecting over 7% gains. Since the UAE deregulated fuel prices in 2015, domestic petrol prices have been adjusted monthly to match global market rates. This means UAE drivers could see a price hike at the pump next month.

Naeem Aslam, chief investment officer at Zaye Capital, warned that the tit-for-tat attacks could further destabilize global markets, especially if energy infrastructure continues to be targeted.

Gold Jewellery Gets More Expensive

Gold is traditionally seen as a safe haven during times of conflict and prices are showing it. Since tensions flared, gold rates in Dubai jumped by nearly AED 5 per gram. As of Sunday, 24K gold was trading at AED 413.5 per gram.

This price surge comes just as UAE residents begin preparing for summer holidays, a time when many shop for gold jewellery abroad. With higher prices, shoppers might find themselves paying more this year or putting off those purchases altogether.

“Gold is the only fortress standing firm as Middle East tensions boil over,” Aslam said, adding that further conflict could drive prices even higher.

Airfares Set to Climb

Flight disruptions are another ripple effect. Nearly 3,000 daily flights have been rerouted or cancelled due to the closure of regional airspace, according to data from Flightradar24. UAE airlines including Emirates, Etihad, flydubai, and Air Arabia have temporarily suspended flights to destinations like Iran, Iraq, Jordan, and Israel.

This has led to delays and cancellations, leaving many travellers stuck or forced to change their plans. Once the airspace reopens and demand spikes, airfares are likely to rise in the short term.

Import Prices May Go Up

Several countries, including Iran, Iraq, Syria, Jordan, and Israel, have closed their airspace, affecting the flow of goods in and out of the region. While there’s no immediate shortage, delays in shipping and higher freight costs could drive up prices of certain imported goods.

Iran, for instance, exports a variety of items to the UAE such as carpets, dairy, fruits, vegetables, fertiliser, and organic chemicals. If supply chains remain disrupted, consumers might start seeing higher prices on supermarket shelves and in retail outlets.

Bottom Line

The UAE continues to offer safety and stability despite the regional turmoil. But if the conflict continues, residents may notice some indirect effects, mostly in the form of higher prices on essentials and travel. It’s a good time to keep an eye on monthly petrol updates, watch gold prices if you're planning to shop, and book any upcoming travel early to avoid fare hikes.