Tuesday briefing: How the conflict in Iran shattered the Gulf state image of peace and luxury

A projectile struck a residential area in Al-Kharj, Saudi Arabia on Sunday, killing two foreign nationals (one Indian and one Bangladeshi) and injuring twelve others. Saudi authorities reported the incident, attributing it to an unspecified "military projectile," while Iran's IRGC claimed responsibility, stating they targeted radar systems in the Al-Kharj governorate, home to the Prince Sultan airbase. This attack is part of a series of Iranian counterattacks on Gulf nations hosting US military assets, following Israeli strikes on Iranian oil facilities. Other attacks on Sunday included intercepted drones in Riyadh, damage to fuel tanks at Kuwait's international airport, and damage to a water desalination plant in Bahrain. The escalating conflict raises concerns for the safety of the diverse international workforce across the Gulf.

On Sunday, Kuwait, Saudi Arabia, and Qatar reported missile and drone attacks, as Iran vowed to continue strikes against neighboring Gulf countries. Qatar stated it was targeted the previous day by multiple ballistic and cruise missiles fired from Iran, most of which were intercepted. Saudi Arabia's defense ministry reported intercepting and destroying fifteen drones entering its airspace. Kuwait's military reported responding to hostile drones that penetrated its airspace, with fuel tanks at Kuwait's international airport being targeted. Kuwait's national oil company also announced a precautionary cut to production. These incidents mark the second week of escalating regional conflict.

In March 2026, the US and Israel escalated their conflict with Iran, striking oil storage depots and refining facilities in Tehran. These strikes marked the first time the capital had been targeted, resulting in significant fires. Despite assurances from Iran's president that attacks would cease, Qatar, Saudi Arabia, and the UAE reported further attacks. US President Donald Trump reiterated his demand for Iran's "unconditional surrender," stating the war would only end with the capitulation or incapacitation of Iran's leadership and military. The ongoing conflict continues to escalate, raising concerns about regional stability.

Recent Iranian attacks in the Gulf have expanded beyond traditional oil and gas infrastructure to include data centers, signaling a shift in targeting strategic assets. On March 1st, drone attacks damaged three Amazon Web Services data centers in the United Arab Emirates and Bahrain. These attacks suggest a deliberate effort to undermine the Gulf's post-oil future, particularly its ambitions in artificial intelligence. The region's AI investments, supported by partnerships and cloud providers, rely on cheap and reliable power, which is now threatened. This new focus on data centers poses a risk to the Gulf's economic diversification efforts.

On March 2, 2026, Iran's retaliatory strikes against US assets in the Gulf region entered their third day, escalating fears of a prolonged conflict. Explosions were reported in Dubai, Doha, and Kuwait, with Kuwaiti air defenses intercepting drones near residential areas. Iran stated the attacks were in response to ongoing US-Israeli strikes on Iran, targeting US military assets and impacting civilian areas across Gulf cities. Bahrain activated air raid alerts and closed a major bridge. Casualties have been reported in Kuwait, the UAE, and Qatar, while US-Israeli attacks have resulted in significant casualties in Iran and Israel. The US, Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia, and the UAE jointly condemned Iran's attacks and affirmed their right to self-defense.

Multiple Gulf nations, including the UAE, Saudi Arabia, Qatar, and Kuwait, reported missile and drone attacks on Saturday. These attacks occurred despite an earlier apology from the Iranian president to Gulf countries, where he stated they would not be targeted unless strikes originated from their territory. Hours later, Iran declared its intent to continue strikes on sites within Gulf countries it considered to be at the disposal of its enemies. The UAE's president acknowledged the country was in "a period of war." Dubai authorities reported one death, a Pakistani national, resulting from debris from an aerial interception. Kuwait's national oil company announced a precautionary cut to production.

On February 28, 2026, Qatar reported that eight people were injured by falling missile shrapnel after Iran fired 66 missiles at the country. Qatari authorities stated that their air defenses intercepted the missiles, but 114 reports of falling shrapnel were received nationwide. The Qatari Interior Ministry issued warnings urging residents to stay indoors and avoid military sites or unidentified debris. Qatar's Ministry of Foreign Affairs condemned the Iranian missile strikes as a violation of its sovereignty and a threat to regional stability, reserving the right to respond under international law.

Following drone attacks on U.S. embassies in Saudi Arabia and Kuwait, the U.S. State Department has closed its embassies in those two countries. The State Department also issued an urgent advisory, recommending that American citizens immediately depart from 14 unspecified countries. These actions come as tensions escalate in the region, with Iran reportedly increasing retaliatory measures. Simultaneously, the Israeli military announced it has seized additional territory in Lebanon amidst ongoing conflict with Hezbollah, which is backed by Iran. The closures and travel advisory highlight growing concerns about the safety of American personnel and citizens in the Middle East.

Iranian missiles struck multiple locations across the Arab Gulf states, including Dubai and Abu Dhabi, marking a significant escalation of regional conflict. The attacks damaged infrastructure, including airports and hotels in Dubai, demonstrating Iran's capability to strike US allies in the region. These strikes, according to analysts, aim to deter Gulf states from supporting potential US or Israeli actions against Iran. The attacks highlight the vulnerability of Gulf nations and underscore Iran's willingness to "internationalize the battlefield," bringing the conflict directly to its neighbors. This development is likely to strengthen Arab rulers' support for potential US-Israeli strikes.

Oil prices surged after the reported death of Iranian leader Ayatollah Ali Khamenei in US-Israeli air strikes, escalating conflict between the US, Israel, and Iran. The Strait of Hormuz, a critical oil transit route, experienced near standstill, impacting tanker traffic. This disruption raised concerns about supply shortages and increased import costs, particularly for Asian economies like China, India, Japan, and South Korea, which heavily rely on oil imports. Benchmark Brent crude jumped significantly, reflecting market fears of sustained supply disruption. Iran retaliated with attacks on US military bases in Bahrain, Kuwait, and Qatar, further escalating geopolitical tensions in the region.

On March 1, 2026, air traffic in the Middle East experienced significant disruption. According to Flightradar24, over 3,400 flights were canceled within the preceding 48 hours. The cancellations affected seven airports across the region. Airports impacted included those located in Qatar, the United Arab Emirates, and Bahrain. The reason for the widespread flight cancellations was not specified in the report.

Airspace closures across the Middle East, triggered by attacks between America/Israel and Iran, caused widespread flight disruptions, stranding or diverting hundreds of thousands of travelers. Several countries, including Israel, Qatar, Syria, Iran, Iraq, Kuwait, and Bahrain, closed their airspace, leading to the suspension of operations at key international airports in Dubai, Abu Dhabi, and Doha. Major airlines like Emirates, Qatar Airways, and Etihad cancelled thousands of flights, impacting an estimated 90,000 passengers daily passing through these hubs. Over 3,400 flights were cancelled across seven major Middle Eastern airports on Sunday. Some airports and landmarks in the region sustained damage, resulting in injuries and at least one reported death. The closure of Iranian airspace was extended until Tuesday morning.

A war launched by the US and Israel on Iran has rapidly escalated, spreading across the Middle East. On Saturday, Iran struck the Fairmont hotel in Dubai's Palm Jumeirah area, causing a fire and injuring four people. The attack on the Dubai hotel is part of a wider conflict that has sparked anxiety and concern throughout the region, with reports of explosions in Bahrain, Jordan, and Kuwait. The initial US-Israeli attack on Iran appears to be the catalyst for the escalating regional conflict. The reasons for the initial attack were not specified in this report.

On February 28, 2026, Iran confirmed retaliatory attacks on US assets located in Gulf Arab states, including Bahrain, Kuwait, Qatar, and the United Arab Emirates, following a joint US-Israeli attack on Iran. The Islamic Revolutionary Guard Corps (IRGC) claimed responsibility, stating that all US and Israeli military targets in the Middle East were struck. Bahrain reported an attack targeting the US Navy's 5th Fleet headquarters, while Kuwait experienced explosions near the US military's Central Command headquarters. Qatar's Defense Ministry stated it intercepted missiles before they reached Qatari territory. The UAE reported at least one death in Abu Dhabi after intercepting missiles launched from Iran.

Iran launched missiles and drones targeting Israel and US military installations in Bahrain, Kuwait, and Qatar in response to recent attacks by the US and Israel. The Iranian Foreign Ministry stated the action was in defense of the homeland. The UAE and Iraq closed their airspace, and shrapnel from an Iranian missile killed one person in the UAE. Israel issued a nationwide warning and activated its missile defense systems to intercept incoming projectiles. There were initially few reports of damage or injuries in Israel.

Following reported strikes in Iran by the US and Israel, Australia's National Security Committee is convening. Foreign Minister Penny Wong stated Australia was not informed in advance of the strikes and has updated travel advice for Israel, Lebanon, Bahrain, Kuwait, Qatar, and the United Arab Emirates. A crisis center has been activated to provide consular support to Australians in the region, and a registration portal has opened for Australians in Iran and Israel. Wong emphasized Iran's destabilizing role in the region and stated that Australia did not participate in the strikes. The Australian government advises Australians in the affected region to follow travel advice and seek safety, acknowledging potential difficulties with repatriation due to airspace closures.

Following Israeli and US airstrikes on Iran, the Australian Department of Foreign Affairs (Dfat) has warned Australians of potential "reprisal attacks and further escalation" across the Middle East. Dfat updated its Smartraveller website, advising against travel to Iran and urging those in the country to leave if safe, citing the risk of military conflict and potential airspace closures impacting global flights. Australians remaining in Iran are advised to prepare to shelter in place with adequate supplies. The Australian embassy's operations in Iran are suspended. Prior to the attacks, Australia had already advised citizens in Israel and Lebanon to consider leaving and withdrew dependents of officials from Israel and Lebanon due to the deteriorating security situation.