For years, the Gulf region was a dealmaking powerhouse. Sovereign wealth funds deployed billions, IPO activity outpaced the rest of the world, and hardly a week passed without a private equity firm setting up shop in Dubai or Abu Dhabi. Bankers expected 2026 fees to surpass $1bn for the first time since the global financial crisis.

That optimism has taken a hit since the US-Israel war with Iran began on February 28, dragging the Gulf into a regional conflict. Investment bank revenues in the Gulf fell 14 per cent in the first four months of the year, according to Dealogic. The IPO of Emirates Global Aluminium has been pushed back until at least next year, and more than $106bn in deals pending Gulf commitments remain incomplete.

Restaurants in Dubai and Abu Dhabi now offer lunch discounts as the financial centres thinned out. Yet bankers remain surprisingly bullish, pointing to continued investments and Adnoc's overseas expansion plans. The region still oversees an estimated $5tn in sovereign wealth. Without a lasting peace deal, a quick rebound in deal activity seems unlikely.