The war in Iran is now inflicting heavy economic damage across the wider Middle East, with the region’s tourism and travel industry losing an estimated $600 million a day as airspace closures and security fears disrupt international travel.According to estimates by the World Travel and Tourism Council (WTTC) cited by the BBC, the losses are largely driven by the collapse in international visitor spending after widespread flight cancellations and the closure of large parts of regional airspace. Airlines have repeatedly altered schedules as the conflict — now in its second week — spreads across multiple countries and threatens key transport and energy routes.Before the war began, the WTTC had forecast around $207 billion in international visitor spending in the region in 2026, underlining the scale of the economic disruption now unfolding.The fighting erupted after US–Israeli strikes on Iranian targets on February 28, triggering retaliatory attacks by Tehran and widening the conflict across the Gulf.
Tourism sector takes heavy hit
The war has sharply reduced flights to several key regional hubs, forcing airlines to cancel or reroute services.KLM has cancelled all flights to Dubai until March 28, while British Airways has taken similar measures affecting routes across the region.With airspace closures stretching across parts of the Gulf, commercial aviation has been operating at limited capacity, leaving thousands of travellers stranded or forced to alter plans.Gloria Guevara, president and chief executive of the WTTC, said tourism historically recovers quickly from security crises when governments support travellers and restore confidence.She said past crises showed the sector could rebound rapidly, sometimes within two months, when authorities work with the travel industry to reopen routes and assist stranded tourists.
Escalation across the Gulf
Meanwhile, the conflict has intensified across the Gulf, raising fears about energy supplies and global trade.Iran launched attacks targeting infrastructure across several countries, including a strike that sparked a major fire on Bahrain’s Muharraq Island, home to the kingdom’s international airport. Another attack on Iraq’s Basra port halted operations at the country’s oil terminals after a vessel was struck during a ship-to-ship transfer.Iran has also threatened maritime traffic through the strategically vital Strait of Hormuz — a narrow waterway through which roughly one-fifth of the world’s traded oil passes.The widening conflict has already disrupted shipping routes, fuel exports and fertilizer supplies across the region.
UN pressure and global response
The United Nations Security Council voted 13-0 to adopt a resolution demanding Iran halt attacks on Gulf states, describing the strikes as a threat to regional stability and global trade. China and Russia abstained.Countries including India joined more than 130 nations in backing the Bahrain-led resolution condemning attacks on Gulf Cooperation Council states.At the same time, the energy market has come under pressure as fears grow over oil supply disruptions. The International Energy Agency has agreed to release 400 million barrels of oil, the largest emergency release in its history, while the United States plans to release 172 million barrels from its Strategic Petroleum Reserve.
