Houthi attacks, Iran uncertainty rattle oil markets

Welcome back to AL-MONITOR Business & Tech.

Oil markets received brief relief this week after the US and Iran de-escalated attacks, though that respite proved short-lived as hostilities flared again on Wednesday. US President Donald Trump said Monday that “there are very friendly negotiations going on” with Tehran to end the conflict, before vowing on Wednesday to “beat the fucking shit” out of Iran after its military resumed attacks on US forces, sending tensions sharply higher.

Attacks on Saudi oil tankers in the Bab el-Mandeb Strait, the southern gateway to the Red Sea, show how sensitive the oil market is to the region’s geopolitical instability. Still, traffic continued through the waterway this week.

Elsewhere, we look at the Trump administration’s decision to lift a more than 40-year flight ban on Lebanon, and what it means.

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Thanks for reading,

Jack (@jackvdutton)

Houthi attacks, US-Iran uncertainty put oil markets on edge

Red Sea access has become vital for Saudi Arabia to keep shipping oil as traffic in Hormuz is disrupted — Khaled ZIAD

The price of oil has oscillated over the last week as hopes rose and fell over Iran and the United States restarting talks to end the five-month war. 

Houthi attacks: On Thursday, Yemen’s Houthi rebels claimed they attacked two Saudi oil tankers in the Bab el-Mandeb Strait, after the Iran-backed militia said it would block ships coming from the kingdom from traversing the strait in response to Riyadh’s military involvement in Yemen. Via the Saudi Press Agency, Riyadh confirmed that one of those ships had caught fire, without saying how, and did not comment on the other vessel. Oil that day rose to above $100 for the first time since May.

Oil recovers: However, markets looked brighter the following week over optimism that talks had restarted to end the war. Oil shed as much as 9.5% of its value on Monday, falling to as low as $87.62, after the US paused its two-week bombing campaign against Iran and Tehran vowed to suspend attacks in the region in response. But renewed fighting and escalating threats quickly erased those gains. Brent crude was back at $90.62 as of 12:14 p.m. EDT on Wednesday, up 7.78% from the previous day.

Despite the security risks in Bab el-Mandeb, traffic continued through the Red Sea this week. Ship-tracking data from analytics firm Kpler shows more than a dozen oil tankers sailing in the vicinity of the strait as of Tuesday evening. Earlier Tuesday, reports emerged that China had held direct talks with the Houthis to enable its tankers to sail through the Red Sea without being attacked.

Gulf banks weather Iran storm

A man walks past a screen displaying stock indices at the Dubai Financial Market (DFM) stock exchange in Dubai on March 4, 2026. (Photo by Fadel SENNA / AFP via Getty Images)

Despite nearly five months of war in Iran and the broader Middle East, Gulf banks have continued to post strong earnings, with analysts noting that lenders' strong position at the start of the conflict has so far helped them withstand the economic fallout.

On Thursday, Abu Dhabi Commercial Bank reported a 34% annual jump, to 3.37 billion dirhams ($920 million), in its second-quarter profit, while the First Abu Dhabi Bank, the UAE's largest lender by assets, posted a 4% increase, to 5.72 billion dirhams.

In Saudi Arabia, Al Rajhi Bank posted a 14% jump in profit, to 7.01 billion Saudi riyals ($1.89 billion) for the period between April 1 and June 30. 

Deteriorating outlook: Gulf banks have faced challenging financial conditions since Israel and the United States attacked Iran on Feb. 28, triggering the ongoing war now spread across the Middle East.

On June 17, Fitch revised its outlook on the Middle Eastern banking sector from "neutral" to "deteriorating," citing the prolonged Iran conflict. Amin Sakhri, director of financial institutions at Fitch, told Al-Monitor the decision reflected weakening assets in key economic sectors, including contracting, hospitality, real estate and tourism, because of the war.

Strong fundamentals: Despite those concerns, second-quarter earnings suggest that Gulf banks remain resilient for the time being. Badis Shubailat, vice president at Moody's Ratings, pointed to lenders entering the conflict from a position of strength after several years of improving fundamentals.

"This is owed to a pre-conflict three-year period of benign operating conditions in the Gulf with structural reforms and strong non-oil activity during which GCC banks saw their standalone credit fundamentals improve further on top of already strong solvency and liquidity profiles," Shubailat told Al-Monitor. 

Chart of the week 

Before the Houthi threat to blockade Bab el-Mandeb, Saudi Arabia had been diverting more than 70%, or around 4.5 million barrels per day, of its crude exports to its Red Sea port of Yanbu. The kingdom used its East-West Pipeline to transport crude from its Ras Tanura terminal on the eastern coast to the Red Sea, allowing it to bypass the Strait of Hormuz.

In May, Saudi Arabia exported only 3.45 million bpd of oil, down from around 7.28 million in February, mainly before the war, according to the commodities data website JODI. Despite the fall caused by the disruption to trade routes, the security of alternative export routes remains critical to maintaining supplies to international markets.

What we found interesting this week

Diamonds are pictured during the sale of 100% traceable artisanally mined diamonds from DR Congo at the Antwerp World Diamond Centre, Thursday 18 June 2026 in Antwerp. — Tom Goyvaerts / BELGA MAG / Belga / AFP via Getty Images

Qatar launched a diamond exchange on Monday as it seeks to diversify its economy in response to the Iran war and the near-total closure of the Strait of Hormuz, which has throttled its most lucrative exports of liquefied natural gas and other petroleum products.

What happened: The Qatar Diamond Exchange, launched by the Qatar Free Zones Authority, will operate from the Ras Bufontas Free Zone and offer trading, vaulting, certification, memberships and other industry services, the Qatar News Agency reported.

The exchange intends to establish a new gateway for global diamond trade in the country, connecting Doha with international markets and supporting Qatar’s economic diversification under its National Vision 2030 initiative.

Why it matters: To make up for lost revenue and diversify its economy, Qatar is looking to make a splash in the global diamond market, which is estimated to be worth more than $100 billion. The country's diamond industry is still in its infancy, especially when compared to its neighbor, the United Arab Emirates. Dubai is a global trading hub for rough and polished diamonds, home to the Dubai Multi Commodities Centre and the Dubai Diamond Exchange. In 2025, Dubai handled $41.7 billion of diamond trade, a record high. 

The announcement of the exchange comes as Qatar’s main exports, LNG and petroleum products, have been severely cut as a result of the Iran war and the Strait of Hormuz crisis. The waterway is a critical energy chokepoint that, before the war, saw around a fifth of all oil and LNG shipments pass through it. Since March 1, traffic through the strait has been at a near standstill amid attacks on ships by Iran’s Islamic Revolutionary Guard Corps and naval blockades by the United States.

Also on our radar

Members of the Greek Air Force look at the Boeing MQ-28 Ghost Bat on the opening day of the Farnborough International Airshow 2026 in Farnborough, south-west of London, on July 20, 2026. (Photo by Toby Shepheard / AFP via Getty Images)

✈️The 2026 Farnborough International Airshow concluded on Friday with Saudi Arabian airlines on a buying spree, but the Gulf's biggest carriers holding back amid the Iran war.

🛢️Saudi Aramco has reportedly been upping exports through an Egyptian port as an alternative route to the Bab el-Mandeb Strait and the Strait of Hormuz, which has been nearly totally closed during the US-Iran war due to attacks on ships.

Top deals

💡 Venture capital

• UAE fintech Epic Markets raises $10 million pre-seed
• Egyptian manufacturing startup Simplex inaugurates factory with $50 million investment
• Saudi game studio Ash Games raises $1.5 million
• UAE’s BY Venture Partners participates in $2 million pre-seed for ChatFeatured
• Egyptian e-commerce firm Fincart lands $2.8 million

⛓️‍💥M&A

• UAE aircraft lessor DAE completes $9 billion acquisition of Macquarie Airfinance

🌍Expansions

• Blackstone to open Kuwait office in Q3 amid AI push

💰 Investment & finance

• Oman’s Bank Dhofar to issue $400 million in capital instruments
• Canadian investment firm Brookfield raises $2 billion for PIF-backed Middle East fund
• Prince Alwaleed bin Talal acquires 5% in EV company Lucid Motors
• African Development Bank approves $114 million loan for Morocco’s EV gigafactory
• Unit from Saudi Arabia’s Red Sea International expands financing facilities to $115 million

🤝Projects & partnerships

• Sweden’s Saab wins $1 billion order for surveillance aircraft in Middle East
• Saudi Arabia issues over 34,000 building permits in H1
• Airline Saudia Cargo launches new Riyadh-Melbourne freighter route
• Siemens inaugurates first factory in Egypt with $6.9 million investment

™️Misc

• Abu Dhabi Commercial Bank’s Q2 net profits rise 31%
• Dubai’s Emirates NBD Q2 profit beats estimate
• UAE bank FAB’s Q2 profit up 2%
• Saudi Arabia’s Tadawul Group’s Q2 profit falls 4% on higher operating expenses
• Saudi Arabia’s trade surplus jumps to $6.9 billion in May as oil exports rebound
• Dubai financial centre new registrations up 30% in H1 despite war
• Egypt’s Investment Funds reach $9.3 billion as assets grow 14.7% in Q2
• Egypt’s financial regulator launches IPO readiness program for state-owned firms
• Egypt to pilot digital visa at Cairo Airport from August
• MENA equity issuance slumps 71% in H1 amid war