Middle East Conflict Disrupts Air Travel and Markets

Escalating tensions in the Middle East, triggered by strikes between the U.S., Israel, and Iran, are causing significant disruption to air travel and impacting financial markets across Asia. The conflict, particularly Iran’s retaliatory missile launches targeting neighboring countries, has led to widespread flight cancellations and volatility in airline and energy stocks.

Flight Cancellations and Airport Disruptions

Several major airports in the region have halted operations in response to the conflict. Doha in Qatar, and Dubai and Abu Dhabi in the United Arab Emirates, experienced significant disruptions. The Dubai and Abu Dhabi airports also reportedly sustained damage from the strikes. Reuters reports that Iran fired missiles at several Arab Gulf cities on Saturday, causing widespread disruption.

Singapore Airlines canceled 16 flights between February 28th and March 7th on the Singapore-Dubai route. Its subsidiary, Scoot, temporarily suspended flights between Singapore and Jeddah, Saudi Arabia. The Independent notes that airspaces over Iran, Iraq, Kuwait, the United Arab Emirates, Lebanon, Bahrain and Jordan are largely empty.

Impact on Airline Stocks

Asian airline stocks experienced a downturn on Monday as a direct result of the escalating conflict. Singapore Airlines shares fell by 4.5% as of 11:00 PM Eastern time. Australia’s Qantas and Hong Kong’s Cathay Pacific saw declines of 5.4% and 2.8%, respectively. Japan Airlines, one of Japan’s major carriers, dropped by 5.6%.

Market Reactions: Defense and Energy Sectors

Whereas airline stocks suffered, Asia-Pacific defense stocks rose amid a broader trend of increased global defense spending. Japan’s Mitsubishi Heavy Industries increased by 3.6%, and Singapore’s ST Engineering saw a 3.4% gain. This reflects a longer-term boom in the defense industry, with global military spending reaching a record $2.6 trillion in 2025, according to the International Institute for Strategic Studies.

Energy companies also experienced gains, driven by expectations of potential disruptions to oil shipments from the Middle East. Australia’s Woodside Energy rose by 5.4%, and Hibiscus Petroleum, a Malaysian oil and gas exploration company, jumped by 13.1%.

Oil Price Surge

Oil prices have increased significantly, with Brent Crude reaching $82.37 per barrel – the highest since January. West Texas Intermediate crude, the U.S. Oil benchmark, rose 6.95% to $75.33 per barrel, its highest point since last June.

Broader Market Trends

Asian markets slumped. Hong Kong’s Hang Seng Index fell by 1.6%, and Singapore’s Straits Times Index dropped by 1.8%. Japan’s Nikkei 225 index declined by 1.4%. (South Korea’s markets were closed on Monday.)

This is a developing story and will be updated as more information becomes available.