Gulf's Missile Defenses Strain Under Intense Conflict: What's at Stake?

After a week of relentless conflict, there are no signs of the war slowing down. US Defence Secretary Pete Hegseth has stated that there will be a “dramatic surge” in America’s air campaign against Iran. In response, Tehran has vowed to destroy not only Gulf military infrastructure but also its economic assets, which has sent shockwaves through financial markets.

Despite clarifications that they did not permit their soil to be used against Iran or participate in any warfare, Gulf countries are now left to defend against hundreds of missiles targeting both their territory and economy. Qatar’s minister has warned that this war could have dire economic consequences, particularly given the region's central role in global oil markets.

The pressure on the Gulf’s available stockpile of missile interceptors is growing. Qatar and the United Arab Emirates (UAE) have previously stated that their military reserves of Patriot interceptor missiles are strong. However, the exact numbers of these stockpiles are kept secret to prevent enemies from calculating how many missiles are needed to overwhelm defense systems.

Some clues about the scale of these arsenals come from documents released by the Defense Security Cooperation Agency (DSCA) in the United States. These documents suggest that the UAE has ordered more than 1,000 PAC-3 interceptor missiles, along with older variants, over the past 15 years. However, such numbers could cover only a few days if the current pace of interceptions continues.

According to the DSCA documents, Washington is facing tough choices in allocating its missile defenses. It must balance support for partners in West Asia while ensuring its own forces in the Pacific are prepared to deal with China’s large missile capabilities. Production capacity highlights the challenge further. Lockheed Martin currently manufactures about 600 PAC-3 interceptor missiles each year, aiming to increase this to roughly 2,000 annually over the next seven years. Production of interceptors for the Terminal High Altitude Area Defense (THAAD) system is lower, with current output believed to be around 96 annually.

This means that, during intense conflict, Gulf countries could use more interceptors in a day or two than the US defense industry produces in an entire year. If fighting continues for more than a week, pressure on available stockpiles could grow quickly. Governments may then have to use their interceptors carefully, deciding which critical locations must be protected and which areas might have to remain exposed.

The effectiveness of missile defense does not depend solely on the number of interceptors available. Many Gulf countries operate standard defense systems purchased from abroad, which may not always be designed for the specific threats they face. Israel, in contrast, has built specialized systems tailored to its security needs. Successful missile defense also relies heavily on radar and tracking technology, including systems on the ground and in space, which guide interceptors more accurately toward incoming targets.

Ran Kochav, a former brigadier-general who once led Israel’s missile defense forces, told The Economist that the defense systems purchased by several Gulf nations may not be fully suited to their requirements. He argues that these countries depend on individual systems instead of building a wider national missile-defense network that integrates all necessary components. Weak coordination between different systems is believed to be one reason why the missile defenses of Saudi Arabia have not performed as well as those of Qatar, according to a Gulf official familiar with the data.

There have been reports suggesting that some Gulf governments are uneasy about the war and want Washington to push for an end to the conflict, fearing damage to cities and infrastructure. However, many officials in the region appear confident and have not shown clear opposition to one of the goals stated by Donald Trump: the destruction of Iran’s missile industry.

The conflict also poses a significant threat to the Gulf’s digital infrastructure. Tech giants such as Google, Amazon, and Microsoft have invested heavily in building data centers across the region, with the vision of making these countries a major global center for artificial intelligence. The digital infrastructure supporting these facilities depends heavily on a small number of routes. Undersea internet cables that connect Gulf data centers to Africa, South Asia, and Southeast Asia pass through the Red Sea and the Strait of Hormuz, both of which are now effectively closed to normal commercial traffic due to rising tensions.

Around 17 submarine cables run through the Red Sea, handling most of the data traffic between Europe, Asia, and Africa. Several other cables pass through the Strait of Hormuz, connecting countries such as Iran, Iraq, Kuwait, Bahrain, and Qatar. Experts suggest that the situation is particularly risky because repair crews would struggle to reach the area if any of these cables were damaged. Doug Madory, who leads internet analysis at the network intelligence firm Kentik, told Rest of World that a scenario where both key maritime routes are closed simultaneously could cause major disruption to global connectivity.

The property boom in the UAE is also facing new challenges. The attacks have raised concerns about how much cities like Dubai and Abu Dhabi depend on foreign money to support their rapid construction and real estate growth. Missiles have hit airports, ports, and residential areas in both cities, damaging the region’s image as a stable and secure investment destination. The strikes came at a time when there were already worries about the property market overheating. Developers who were previously selling off-plan homes within hours are now dealing with a much more uncertain demand situation.

The impact was visible in the stock market on Wednesday. Shares of major property developers in Dubai and Abu Dhabi dropped sharply. Aldar Properties, the biggest listed developer in Abu Dhabi, and Emaar Properties, the company behind downtown Dubai and the Burj Khalifa, both saw their shares fall by around 5%. Some companies tried to calm concerns, suggesting that the market would recover. Ziad El Chaar, CEO of luxury developer Dar Global, told Reuters that the Gulf had seen sudden crises before and usually bounced back quickly due to strong economic fundamentals. However, others in the industry say the impact is already being felt. A senior real estate banker told Reuters that his firm had postponed a plan to raise funds for a property project in the UAE. Many investors are currently reluctant to put money into the region, as the risks have increased.

Real estate consultancy Anarock said that the long-term outlook for the UAE property market remains supported by strong global investment and steady housing demand from expatriates. However, property deals could slow as buyers become more cautious and review the risks before committing to purchases. Geopolitical tensions usually affect property markets through changes in buyer behavior rather than causing an immediate fall in prices. As a result, the first impact is typically a slowdown in the number of property deals, with price changes occurring later depending on the duration of uncertainty.