Gulf businesses brace for potential conflict spread, developing crisis action strategies
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Risk management firms have observed a significant surge in inquiries as companies in the Gulf region get ready for emergency plans and activate crisis units amid fears of the Israel-Iran conflict's potential fallout.
The Gulf monarchies, home to the region's leading financial hubs like Dubai and Abu Dhabi, are on edge to steer clear of the turmoil following efforts to enhance ties with Iran in recent years. The overall security scenario in the broader region, including Saudi Arabia and the United Arab Emirates, remains unchanged currently.
However, Gulf states host US military bases, which could become targets, and there is apprehension that Iran might retaliate by attacking their energy infrastructure if tensions escalate further. President Donald Trump has hinted that the US might back Israel's offensive by striking Iran.
Tom Griffin, senior partner for the Middle East and Africa at Control Risks, stated, "We've seen a sharp increase in demands linked to the escalating regional conflict—ranging from evacuation support in Iraq and Israel to intelligence and information regarding the ground situation."
According to Phil Miles, associate managing director for enterprise security risk management at Kroll, businesses should be prepared for a variety of targets in the Middle East, such as energy, utilities, or US bases, which could be threatened if the situation intensifies. "This isn't a mere local conflict," Miles stressed.
The immediate danger still looms over Israel and Iran, with civilian casualties due to waves of bombings in both countries. Kroll, Control Risks, and International SOS have assisted companies in evacuating their staff from Israel since it initiated its bombing campaign in Iran. International SOS has also helped with overland evacuations from Iran.
"Our assistance centers in Dubai and London have been kaput since last Friday, supporting clients around the clock," said Gulnaz Ukassova, a Dubai-based security expert at International SOS.
Mick Sharp, senior vice-president of Crisis 24, reported that the firm has been swamped during this period. The company, which has 150 intelligence analysts based in Israel, has helped on 40 individual company evacuations from Israel alone so far. "Jordan and Egypt are the primary drop-off points," Sharp said, "and we're using Doha and Sharm el-Sheikh as transit points for further travel."
For many businesses in the Gulf region, instability is no stranger. Companies in Doha, for example, had to adapt to the country being under embargo by its neighbors during Trump's initial term.
But since Israel struck Iran last week, more companies have sought help with everything from crisis management plans to tracking the war's development.
Some businesses are turning to technology to assuage employees and disseminate crucial information. A FTSE 100 consumer goods company with employees across the region has chosen to install an emergency notification system on employee smartphones. They've also asked managers to develop business continuity plans to ensure uninterrupted shipment of goods if the situation escalates further.
Control Risks' Griffin said the firm was "deeply involved in crisis management planning and crisis simulation exercises for multiple companies." Some firms have activated "crisis teams" to keep stakeholders informed, while others are examining their supply chains for potential weaknesses.
Nick Doyle, a managing director at Kroll, said a "small group" of companies had already prepared for adversity post-attacks on Abu Dhabi by Yemeni Houthis rebels in 2022. While Kroll had aided clients in developing evacuation plans for the UAE, "none have activated those plans yet," Doyle stated. "They're a last resort."
One sector bracing for chaos is trade and logistics, with worries that Iran might block the Strait of Hormuz. One-third of the world's seaborne crude traverses the narrow waterway administered by Iran and Oman, as do the gas exports of Qatar and the UAE. The UK's Maritime Trade Operations office has reported high levels of electronic interference across the Gulf region, impeding vessels' position reporting systems.
DP World, which runs the region's largest shipping hub at the port of Jebel Ali in Dubai, assured that operations were functioning as usual. The company stated that "in the unlikely event of the Strait of Hormuz's closure, we are working closely with government authorities to ensure business continuity and have prepared rerouting and alternative logistics strategies."
Some firms are even contemplating their public messaging in case of a serious escalation: at least one PR firm in the region claims to have received queries from clients on what they should convey in case of an attack on a Gulf financial center.
As the conflict unfolds, some of the Gulf's foreign workers maintain a calm facade. "People are worried in Doha," Akber Khan, an expatriate investment manager in the Qatari capital, deadpanned. "There's a ludicrous wait for a reservation at Bar du Port—six weeks. This is absurd."
- Businesses in the Gulf region are increasingly seeking advice from risk management firms, such as Control Risks and Kroll, about crisis management plans, intelligence on the ground situation, and potential targets like energy infrastructure or US bases.
- Companies are anxious about the potential fallout from the Israel-Iran conflict, as hostilities could lead to attacks on US military bases in the region or disruptions in trade and logistics, such as the blocking of the Strait of Hormuz.
- To keep employees informed and ensure business continuity, some firms are implementing emergency notification systems on smartphones and developing business continuity plans.
- As the conflict escalates, some firms are also considering their public messaging and seeking guidance from PR firms on how to communicate with stakeholders in the event of an attack on a Gulf financial center.
