The strategic calculus here involves several competing considerations, and the most immediate of them is also the most visceral: for the first time in its modern history, Dubai has watched missiles arc over its famous skyline. Dubai's nightmare scenario unfolded on Saturday, as defence systems repelled Iranian missiles and drones over its famous skyscrapers, with explosions and plumes of black smoke rising from the city's most celebrated neighbourhoods. For a city that has spent decades and billions of dollars positioning itself as the Middle East's indispensable crossroads, the images were not merely alarming. They were existential.
The proximate cause of the crisis was the joint US-Israeli military campaign against Iran. The United States and Israel launched what President Donald Trump described as "major combat operations" against Iran after nuclear talks in Geneva failed to produce a deal. Iran responded by firing missiles at targets in Israel and Gulf Arab states after vowing massive retaliation for the killing of Supreme Leader Ayatollah Ali Khamenei. The regional fallout from that decision has been severe and immediate.
The UAE's Ministry of Defence reported that Iran had fired 165 ballistic missiles, two cruise missiles, and 541 drones at the country. Most were destroyed, but 21 drones hit civilian targets. Three people were killed, all migrant workers from Pakistan, Nepal, and Bangladesh. The scale of the barrage, across two consecutive days, overwhelmed the comforting narrative that had long sustained Dubai's brand: that sophisticated air defences and diplomatic dexterity could insulate the emirate from the storms perpetually gathering elsewhere in the region.
Iconic landmarks struck, airport hit
What often goes unmentioned is that the damage to Dubai's physical infrastructure, while partly contained by those very air defences, was extensive enough to reach every symbol of the city's global ambition. Social media videos and photos showed a fire outside the Fairmont hotel on Palm Jumeirah, flames on the facade of the Burj Al Arab, and smoke rising near the Burj Khalifa, the world's tallest building. There was also a fire at Dubai's Jebel Ali Port, the city's main sea terminal and a major shipping hub, and Dubai International Airport was damaged with four employees injured. The main passenger hub, Terminal 3 at Dubai International, was hit by a drone prompting its evacuation, and the airport was struck a second time in the early hours of Sunday morning.
Australians caught in the attacks described the experience in terms that underline how utterly the city's promise of safety had unravelled. Carina Rossi, a senior editor at nine.com.au staying at Atlantis The Palm, told 9News that debris fell from the sky into the hotel pool where guests had been gathered.
"The debris didn't explode, thankfully. But it was a loud bang, something I'd never heard before," Rossi said.She and other guests were later woken by an alert urging them to seek shelter amid imminent missile threats. Australian Olympic swimmer Stephanie Rice, who lives in Dubai with her husband, shared an appeal for prayers on social media, describing the unfolding situation as a "scary time." Five flights between Sydney and Dubai were cancelled, and a further seven between Melbourne and Dubai.
Aviation in chaos, Australians stranded
The disruption to civil aviation has been staggering in its scope. The conflict led to the closure of key hub airports in Dubai, Abu Dhabi and Doha, and the cancellation of more than 1,800 flights by major Middle Eastern airlines, according to aviation analytics company Cirium. More than 3,400 flights were cancelled on Sunday alone across airports in the Middle East, including Qatar, Kuwait, and Bahrain along with UAE airports, according to Flightradar24. Emirates, the world's biggest long-haul airline, suspended all operations to and from Dubai due to multiple regional airspace closures. The paralysis extended far beyond the Gulf: travellers were stranded as far away as Australia, Brazil, and the Maldives, with airspace in the region still closed and getting home expected to take at least several days.
Foreign Minister Penny Wong indicated that airspace closures caused by Iranian retaliatory strikes were likely to limit the federal government's ability to organise repatriation flights for Australians stranded in the Middle East. "Our first priority is to do everything we can to keep Australians safe," Wong said. "Obviously, it's very difficult at the moment for government to provide a great deal of assistance in circumstances where flights are being cancelled, disrupted and airspace is closed." Bahrain, Iran, Iraq, Israel, Kuwait, Lebanon, Palestine, Qatar, Syria, the United Arab Emirates and Yemen have all been listed on Smartraveller's 'do not travel' list. Australians already in the UAE face an additional complication: an analysis of the Australian insurance market has revealed that nearly all standard travel policies contain a blanket exclusion for acts of war, meaning that if a flight is cancelled due to a missile strike or the closure of an airport like Dubai International, the insurer is not obligated to reimburse the traveller for lost bookings or alternative transport.
The economics of a shattered image
Three factors merit particular attention when assessing the longer-term consequences for the UAE. The first is structural: Dubai's entire economic model rests on the premise that it is a predictable, orderly place to do business and spend money. Oil production, which once accounted for 50% of Dubai's gross domestic product, contributes less than 1% today. In its place, the emirate built an economy dependent on trade, logistics, and above all, the movement of people. According to the World Travel and Tourism Council, 2025 was forecast to be a record-breaking year for UAE tourism, with the sector's total economic contribution expected to hit AED 267.5 billion (approximately US$72.8 billion), accounting for almost 13% of national GDP. The city had welcomed a record 18.72 million international visitors in 2024, with that figure on track to surpass 19 million in 2025. That trajectory now faces a serious test.
The second factor is geopolitical. For years, the UAE conducted what might be called a studied neutrality toward Iran, quietly de-escalating tensions even while hosting US Central Command assets that Tehran viewed as legitimate targets. That balancing act is now in open collapse. The UAE closed its embassy in Tehran and withdrew its ambassador and all members of its diplomatic mission following what it described as "blatant" Iranian missile strikes and drone attacks across the country. The UAE's Ministry of Foreign Affairs condemned the strikes in the strongest terms, calling them a flagrant violation of national sovereignty and a clear breach of international law. The diplomatic rupture closes off the back channels Dubai had cultivated over many years, reducing room for manoeuvre at a time of maximum danger.
The third factor is reputational, and here Cinzia Bianco, an expert on the Persian Gulf at the European Council on Foreign Relations, offered the most pointed assessment. "This is Dubai's ultimate nightmare, as its very essence depended on being a safe oasis in a troubled region," Bianco wrote on X. "There might be a way to be resilient, but there is no going back." The evidence, though incomplete, suggests the assessment is correct. The suspensions represent one of the most significant coordinated pauses in UAE commercial aviation since the Covid-19 pandemic, highlighting the vulnerability of international air travel to geopolitical escalation.
From Canberra's perspective
From Canberra's perspective, the implications are threefold. Australia relies on Middle Eastern air corridors for a substantial portion of its long-haul connections to Europe and the subcontinent. Industry analysts note that if airspace avoidance persists, airlines face structurally higher operating costs, weaker aircraft utilisation, and profit margin pressure, especially on long-haul networks reliant on Middle East transit corridors. Beyond aviation, the conflict threatens energy markets that remain sensitive to any hint of disruption at the Strait of Hormuz. The strikes could rattle global markets, particularly if Iran makes the Strait of Hormuz unsafe for commercial traffic; a third of worldwide oil exports transported by sea passed through the strait in 2025. Australia imports a significant share of its refined fuel through regional supply chains exposed to precisely that chokepoint.
What is often overlooked in the public discourse is that Australia also has a direct stake in the stability of the Gulf Cooperation Council states beyond tourism and fuel. The Department of Foreign Affairs and Trade has long identified the UAE as a critical partner in Australia's broader Indo-Pacific and Middle Eastern engagement. A destabilised Gulf, one where the facade of safe commerce has cracked, complicates Australian efforts to maintain trade relationships and diplomatic credibility simultaneously with Washington, Riyadh, and Gulf partners who now find themselves in the direct path of a conflict they did not choose.
The diplomatic terrain is considerably more complex than the headlines suggest. Those who argue the US-Israeli strikes on Iran were strategically justified point to the years-long failure of nuclear negotiations and Tehran's consistent expansion of its missile programme. Those who question the strikes' wisdom note that the civilian toll inside Iran has been severe, that the killing of a head of state by a foreign power sets a precedent with consequences well beyond the immediate conflict, and that the Gulf states now paying the price in missile debris and cancelled flights had no meaningful voice in the decision. Both perspectives contain genuine weight. Reasonable people, examining the same facts, will reach different conclusions about proportionality, legality, and long-term regional stability. What cannot be reasonably disputed is that the people of Dubai, Australians among them, are living through consequences they did not bargain for. The task of threading a path back to some form of stability, for the region and for Australia's interests within it, will require the kind of patient, evidence-based statecraft that dramatic military operations rarely leave much room to pursue.