Despite rising geopolitical tensions middle EastGlobal banking giant HSBC has publicly reiterated its confidence in the long-term economic strength of the Gulf Cooperation Council (GCC) economies, signaling that international financial institutions will not withdraw from the region despite the ongoing conflict between Iran, the United States and Israel. The statement comes as global markets are rattled by military strikes, energy supply disruptions and concerns that a broader regional escalation could impact global trade routes and oil markets.
HSBC gives strong vote of confidence in GCC
In a recent statement, HSBC CEO Georges Elhedery emphasized the bank’s strong belief in the economic fundamentals of the Gulf region. He said the bank remained “confident in the long-term strength, resilience and prospects of the GCC and the region”.Elkhedri stressed that despite the ongoing geopolitical turmoil in the region, the bank’s confidence in the region’s future remains unchanged. Analysts and bank officials say the GCC’s diversified economies, fiscal reserves and continued investment in financial hubs such as Dubai, Abu Dhabi and Riyadh make it relatively resilient compared with many other regions facing geopolitical shocks.This assurance is significant as major global banks play a key role in financing trade, infrastructure and investment projects across the Gulf region.
War between Iran and US-Israel sends shockwaves to global markets
HSBC’s assurances come amid wider economic fallout from Iran’s ongoing conflict with a coalition led by the United States and Israel. The crisis escalated dramatically in late February 2026 following coordinated airstrikes against Iranian targets and retaliatory strikes by Tehran across the region. Since then, the conflict has triggered widespread economic fluctuations. Financial markets were shaken, oil prices soared and shipping routes through the Strait of Hormuz, one of the world’s most important energy corridors, were severely disrupted.
HSBC sends strong message on GCC as Iran’s conflict with US and Israel roils markets
About 20% of the world’s oil supply passes through this narrow waterway, meaning any disruption here would send shock waves through international energy markets. Energy prices have surged and stock market volatility has intensified in the Middle East and elsewhere as tanker traffic has slowed sharply, shipping lines have suspended operations over safety concerns.
Why the Gulf still attracts global capital
Despite these risks, financial institutions still view the GCC as a long-term growth story. Several factors underpin this confidence:
- Strong financial buffer – Many Gulf states have vast sovereign wealth funds and foreign exchange reserves built up from decades of oil revenue. These reserves help cushion economic shocks during geopolitical crises.
- Diversification strategy—— Countries such as the United Arab Emirates and Saudi Arabia are actively pursuing diversification strategies and investing heavily in tourism, finance, logistics and technology.
- Strategic position in global trade—— The Gulf region remains an important hub connecting Asia, Europe and Africa, especially in energy transport and financial flows.
These structural advantages allow the region to maintain investor interest even during periods of instability.
Banks adjust to rising risks in Iran, US-Israel war
However, the ongoing conflict has forced global banks to reassess some of their operations in the region. According to reports, some institutions have temporarily closed offices or moved employees to remote working as a precautionary measure. For example, branches in some locations have scaled back activity, while risk management teams are closely monitoring developments.Markets have also reacted, with share prices of some international banks with operations in the region falling since the conflict escalated. Despite the changes, analysts said global banks’ exposure to the Middle East remains relatively small compared with their portfolios.
Potential Benefits for Financial Institutions in a War Between Iran and the U.S.-Israel
Interestingly, periods of geopolitical uncertainty can also create opportunities for banks. Volatility in currency markets, increased demand for trade finance, and heightened activity in commodity markets tend to generate new business for financial institutions.
Why HSBC isn’t worried about Iran and US-Israel war: The answer lies in the Gulf
Banks may see higher demand for:
- Foreign exchange services for businesses to hedge currency risks
- Trade finance to manage disrupted supply chains
- Providing cash management solutions to multinational companies operating in the region.
Banks with strong regional networks are likely to benefit from increased financial activity as global companies seek to navigate uncertain markets.
Gulf financial hubs continue to expand during Iran-U.S.-Israel war
Despite geopolitical tensions, the Gulf region’s financial hubs continue to grow rapidly. The Dubai International Financial Center has registered a record number of new companies in recent years, reflecting the emirate’s ambition to become one of the world’s top financial centres.At the same time, Abu Dhabi Global Market also saw a significant increase in assets under management. These financial districts attract global companies seeking a stable regulatory environment, favorable tax regimes and strategic access to emerging markets.
Energy markets remain the biggest variable in the war between Iran and the United States and Israel
While banks remain optimistic about the region’s long-term prospects, the biggest economic risk remains disruption in energy markets. Iran’s conflict with the United States and Israel has pushed up oil prices sharply, with analysts warning that prolonged instability could push prices above $100 a barrel and exacerbate global inflation.Fluctuations in energy markets affect everything from aviation costs to manufacturing prices globally, meaning developments in the Gulf have direct global consequences. For the Gulf producers themselves, however, rising oil prices could provide a temporary boost to their economies by increasing government revenue.
What HSBC just said about the Gulf issues during the Iran war may surprise investors
The Gulf region has experienced geopolitical shocks before, from the Gulf War to tensions with Iran, and regional governments have become adept at maintaining economic stability during crises. Many economists believe the combination of the region’s strong fiscal buffers, political stability in key countries, and ambitious economic reforms has created a more resilient economic environment than in past decades.For investors and global banks, this resilience remains the main reason why the Gulf continues to attract capital even in uncertain times. The ongoing war between Iran, the United States and Israel has undoubtedly brought new uncertainties to the Middle East and global markets. Energy prices are soaring, shipping routes are disrupted and financial markets remain in turmoil.However, HSBC’s public recognition of the Gulf’s economic resilience underscores a broader reality: Despite geopolitical turmoil, the region remains one of the most strategically important and financially attractive parts of the global economy. For now, global banks appear to be taking a cautious but optimistic approach, keeping a close eye on the conflict while continuing to bet on the Gulf region’s long-term economic future.
