Regional Summary
The War Next Door The Iran conflict is now the driving force of regional politics, and every government—belligerent or bystander—is discovering that the war’s costs grow faster than its opportunities. Five weeks of Iranian bombardment have not produced a decisive military result, yet they have already reshaped energy infrastructure, currency markets, alliance politics and domestic governance from Abu Dhabi to Islamabad. Leaders who initially saw the crisis as a chance to advance their interests are finding that each week of fighting narrows their options. The UAE’s response shows the trap most clearly. Khaled bin Mohamed, the crown prince, took personal charge of the Abu Dhabi National Oil Company’s contingency planning after strikes hit the Habshan gas facility and the Borouge petrochemical plant—a move that makes the country’s leadership hostage to the next salvo. The Central Bank’s injection of 31 billion dirhams into banks with heavy real-estate lending acknowledges that the war’s effects—investor flight, construction delays, insurance repricing—may prove costlier than the missiles themselves. Yet Mubadala Investment Company joined a $575m funding round for a Silicon Valley fitness firm, more a sign of sovereign-wealth funds locked into deal pipelines they cannot easily pause than of confidence. Saudi Arabia’s position is more contradictory. Mohammed bin Salman, the crown prince, reportedly calls the conflict a “historic opportunity” to weaken Tehran, yet his kingdom has quietly cancelled another $4.7bn in NEOM contracts and scrapped a bid for the 2029 Asian Winter Games—cuts driven by the fiscal strain the war is deepening. Trump’s vulgar boast that the crown prince was “kissing my ass” laid bare the transactional core of the alliance at the worst possible moment, pushing Riyadh toward Britain’s Sky Sabre air-defence systems and Ukrainian counter-drone expertise. A kingdom that once bought American loyalty with oil revenue now shops for protection on the open market, a demotion its leadership has not publicly acknowledged. Turkey and India have positioned themselves as brokers rather than combatants, yet neither can insulate itself from the fallout. Recep Tayyip Erdoğan, Turkey’s president, spent the weekend shuttling between Putin, Zelensky and Mark Rutte, the NATO secretary-general, before sending his foreign minister to Damascus—a display of Ankara’s diplomatic reach that at home serves partly to distract from his weakening of democracy. Moves to extend his presidency continue and Ekrem İmamoğlu, Istanbul’s mayor, remains detained. The Reserve Bank of India, meanwhile, resorted to emergency capital controls to arrest the rupee’s slide below 95 to the dollar, a blunt admission that no amount of factory openings can offset a sustained energy-price shock. Narendra Modi, the prime minister, has been frantically campaigning across five states on the eve of elections, underscoring how quickly a distant Gulf war becomes a domestic political liability when you import 85% of your crude. Pakistan’s predicament is the most revealing. Asim Munir, the army chief, has turned his country’s back-channel to Tehran into rare American praise—Trump called him “my favourite field marshal”—and a plausible claim to host ceasefire talks. But the UAE, which faces actual missiles, is openly questioning why Pakistan appears sympathetic to the aggressor, putting $2bn in Emirati financial support at risk. At home, a 43% fuel-price surge forced Shehbaz Sharif, the prime minister, into the familiar cycle of hike, protest and retreat, distributing relief through digital wallets as though a digital fix could substitute for fiscal discipline. Mediation wins headlines; paying for the war’s costs power. Each actor in this widening crisis believed it could extract advantage—strategic, diplomatic or commercial—from someone else’s conflict. Five weeks on, the conflict is extracting advantage from all of them. Wars do not respect the categories of opportunity and cost that peacetime planners impose; they blur them, then erase them. The longer the fighting continues, the clearer it becomes that proximity to a war, whether measured in kilometres or in barrels of imported oil, is itself the decisive variable—and not one any of these governments can negotiate away.Country Summaries
United Arab Emirates
Iran fired more than 2,700 projectiles at the UAE this week, shifting from industrial targets to petrochemical infrastructure including the Borouge plant and ADNOC’s Habshan gas facility.
The attacks killed one person at Habshan and forced both facilities to shut down. UAE air defences have intercepted 507 ballistic missiles, 24 cruise missiles, and 2,191 drones since Iran began its campaign on February 28 — roughly 300 more projectiles than the week before. The shift from earlier strikes on industrial facilities like Emirates Global Aluminium to petrochemical infrastructure shows Iran is now targeting energy assets. Five weeks of conflict have killed 11 people and injured 217.
The Central Bank injected AED 31 billion ($8.4 billion) into the banking system, targeting banks with real estate exposure that officials consider most vulnerable to prolonged conflict. Crown Prince Khaled bin Mohamed took direct control, reviewing ADNOC’s contingency plans and emergency preparations after the infrastructure attacks.
The UAE kept up its investment pace. Mubadala joined a $575 million funding round for US fitness company WHOOP, valuing the company at $10.1 billion. The deal shows sovereign wealth funds continuing large investments despite the fighting.
Mohammed bin Zayed, the president, maintained diplomatic contacts, holding calls with Ahmed al-Sharaa, Syria’s president, and Abdullah, Jordan’s king, about Iranian aggression. The contacts represent routine diplomacy rather than new initiatives, with the UAE using existing frameworks like UN Security Council Resolution 2817.
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- ADNOC facilities targeted in attacks, implements business continuity measures — Iranian attacks damaged ADNOC’s Habshan gas facility and Borouge petrochemical plant, killing one Egyptian worker and injuring others. ADNOC maintained domestic gas supply through other facilities while Crown Prince Khaled reviewed business continuity plans and emergency preparedness. (arabnews.com)
- G42 AI company targeted in Iranian threats against tech infrastructure — Iran’s Islamic Revolutionary Guard Corps (IRGC) named UAE’s G42 artificial intelligence company among 18 tech firms targeted for strikes, alongside major US technology companies. The threats come as G42 is involved in major AI infrastructure projects including the Stargate datacenter in Abu Dhabi backed by OpenAI and other US firms. (sofx.com)
- Abu Dhabi introduces paid parking system in Mohammed bin Zayed City — Abu Dhabi’s mobility authority Q Mobility launched paid parking across Mohammed bin Zayed City starting April 6, covering 11,030 spaces in commercial sectors. The system operates through TAMM and Darb mobile applications, with AED 2 per hour fees in commercial areas. (gulfnews.com)
- Former Indonesian President Jokowi reveals phone conversation with UAE President — Joko Widodo, Indonesia’s former president, disclosed that he had called Mohammed bin Zayed, the UAE president, early in the Middle East conflict to ask about when the war would end and its impact on oil prices. Mr Jokowi said he made the call when the war was only three days old. (bloombergtechnoz.com)
Notes
Notes
UAE air defenses intercept hundreds of Iranian missiles and drones as war escalates
March 31 – April 05, 2026
UAE President and Foreign Minister conduct extensive diplomatic outreach on regional crisis
March 31 – April 05, 2026
ADNOC facilities targeted in attacks, implements business continuity measures
March 30 – April 05, 2026
UAE Central Bank injects \$8 billion liquidity into banking system amid regional tensions
April 2–3, 2026
Other
Turkey
Turkey moved closer to constitutional changes that could extend Recep Tayyip Erdoğan’s presidency when his key ally called for passage of enabling legislation, while courts kept pressure on opposition leaders.
Devlet Bahçeli said the time had come for the Terror-free Turkey legal framework and urged legislative action. Mr Bahçeli, who leads the Nationalist Movement Party, pushed forward the amendment schedule that could let Mr Erdoğan seek a fourth term. An Istanbul court released 18 defendants from a mass trial involving Ekrem İmamoğlu while keeping the Istanbul mayor and other key opposition figures detained — a move that eased pressure slightly while keeping the main targets in place.
Mr Erdoğan kept Turkey’s role as regional broker through weekend diplomacy. He met Vladimir Putin, Volodymyr Zelensky, and Mark Rutte, the NATO secretary-general, while Hakan Fidan, the foreign minister, held three-way talks in Damascus with Ahmed Şara, Syria’s president, and Mr Zelensky. The outreach showed Turkey’s ability to mediate across multiple conflict zones.
Turkey’s economic policy stayed orthodox. The central bank and treasury ministry denied Reuters reports claiming officials gave private guidance to investors about interest rate policies during London meetings. This suggested the policy framework remains intact but under scrutiny.
Mr Erdoğan also launched 5G technology in all 81 provinces, stressing digital independence and cyber security as parts of national sovereignty. The rollout continues Turkey’s technological modernisation.
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- Opinion polls show Erdoğan’s approval declining, trailing opposition figures — Multiple polls show Mr Erdoğan’s support has dropped sharply from his 2023 election performance, with surveys showing him trailing potential opposition candidates like İmamoğlu and Mansur Yavaş by wide margins. (sozcu.com.tr)
- Hakan Fidan visits Syria for trilateral talks with Ukrainian and Syrian leaders — Hakan Fidan, the foreign minister, travelled to Damascus for meetings with Syrian officials and joined trilateral discussions with Syrian President Ahmed Şara and Ukrainian President Zelensky, focusing on bilateral relations and regional security issues. (hurriyet.com.tr)
- CHP leader Özel calls for early elections, denies US property allegations — Özgür Özel, the CHP leader, launched a campaign for early elections while firmly denying media allegations that he and İmamoğlu bought US properties, challenging authorities to prove such claims. (artigercek.com)
- Democratic Equality and Peace Party rejects CHP’s early election proposal, outlines conditions for İmralı process — The Democratic Equality and Peace Party (DEM) rejected the CHP’s call for early elections, saying it’s not on their agenda. The party also shared messages from İmralı meetings about the Terror-free Turkey process and called for concrete democratic steps. (sozcu.com.tr)
- İstanbul police arrest three suspects in major counterfeit currency operation — Police arrested three people in İstanbul following raids that uncovered over $1.2 million in fake US dollars and €655,000 in counterfeit euros, along with equipment used for producing fake currency in residential workshops. (haberler.com)
- Justice and Development Party announces Nevruz to become official holiday following Erdoğan’s directive — The Justice and Development Party (AKP) announced that Nevruz will be declared an official holiday in Turkey, with the party saying this decision comes under Mr Erdoğan’s leadership and will soon gain legal status. (odatv.com)
Notes
Notes
Opinion polls show Erdoğan's approval declining, trailing opposition figures
March 29 – April 03, 2026
İmamoğlu corruption trial continues with partial releases, political controversy persists
March 29 – April 03, 2026
MHP leader Bahçeli calls for accelerating 'Terror-free Turkey' legal framework
March 31 – April 04, 2026
Foreign Minister Hakan Fidan visits Syria for trilateral talks with Ukrainian and Syrian leaders
April 06, 2026
DEM Party rejects CHP's early election proposal, outlines conditions for İmralı process
March 30 – April 02, 2026
Other
Saudi Arabia
Donald Trump told a Florida investment forum that Mohammed bin Salman was “kissing my ass,” crude remarks that show strain in the US-Saudi relationship even as the two countries cooperate against Iran.
The crown prince faces pressure from several directions. Saudi Arabia cancelled another $4.7 billion in construction contracts for NEOM’s Trojena mountain resort and withdrew its bid to host the 2029 Asian Winter Games. The cuts are part of a wider pullback from Vision 2030 megaprojects as money runs short. Iranian attacks also continue relentlessly — Saudi air defences have intercepted 799 drones and 95 missiles since March 3, with Saturday marking the first attack-free day in over a month.
Even as Mr Trump made his crude remarks, Mohammed bin Salman argued for keeping the Iran war going, privately calling it a “historic opportunity” to weaken Tehran. But Saudi Arabia also worked to calm tensions through diplomacy. Faisal bin Farhan, the foreign minister, held phone calls with counterparts from Pakistan, Kuwait, Russia, Japan and China to coordinate responses.
The kingdom is expanding its defence partnerships beyond Washington. John Healey, the defence secretary, announced deployment of Sky Sabre air defence systems — Britain’s most modern short-range air defence system with a 25-kilometre range. This follows earlier agreements with Ukraine for counter-drone expertise.
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- MBS holds diplomatic meetings with Putin, Italian PM, and regional leaders — Mohammed bin Salman, the crown prince, engaged in multiple diplomatic contacts, including a phone call with Vladimir Putin, the Russian president, discussing Middle East developments and OPEC+ cooperation, and meeting with Giorgia Meloni, the Italian prime minister, in Jeddah. (reuters.com)
- OPEC+ agrees to increase oil production by 206,000 barrels per day — Eight OPEC+ countries including Saudi Arabia, UAE, Russia, and others agreed to increase oil production quotas by 206,000 barrels per day for May, amid concerns about energy infrastructure attacks and global supply disruptions. (urdupoint.com)
- Saudi Foreign Minister conducts intensive regional diplomacy on Iran conflict — Prince Faisal bin Farhan held multiple phone calls with counterparts from Pakistan, Kuwait, Russia, Japan, and China, discussing regional de-escalation efforts and coordinating diplomatic responses to the ongoing Iran war. (saudigazette.com.sa)
- Saudi Arabia launches ‘Shams’ satellite and joins NASA’s Artemis program — Saudi Arabia made historic progress in space exploration with the launch of its ‘Shams’ satellite as part of NASA’s Artemis program, marking its first participation in a major international space mission. The program aims to localise advanced technologies and build competitive national industries. (timesofindia.indiatimes.com)
- Saudi Arabia strengthens defence partnerships with UK and Ukraine — Saudi Arabia signed defence cooperation agreements with Ukraine and received commitments for advanced UK air defence systems, including Sky Sabre deployment, as part of expanding defence partnerships amid regional security threats. (breakingdefense.com)
- Public Investment Fund explores $5 billion SpaceX IPO investment — Saudi Arabia’s Public Investment Fund is in discussions to take a $5 billion anchor stake in SpaceX’s upcoming IPO, which could become the largest public offering in history. The investment would help protect PIF’s existing stake in the space company while expanding its international portfolio. (reuters.com)
- Saudi Aramco raises LPG prices and faces contract developments — Saudi Aramco and Algeria’s Sonatrach raised liquefied petroleum gas (LPG) prices by 38-80% for April due to supply disruptions, while Aramco awarded various contracts including $11 million to OMS Energy Technologies and received $64.2 million contracts from Arabian Pipes for steel pipe supplies. (reuters.com)
Notes
Notes
Trump makes crude remarks about Saudi Crown Prince MBS at investment forum
March 29 – April 03, 2026
Saudi Arabia intercepts hundreds of Iranian drones and missiles amid ongoing conflict
April 3–6, 2026
MBS holds diplomatic meetings with Putin, Italian PM, and regional leaders
March 31 – April 02, 2026
Other
India
India’s rupee posted its biggest gain in over 12 years this week as the central bank used emergency measures to counter oil price pressures from the Iranian conflict. The Reserve Bank of India capped bank forex positions, banned certain forward contracts, and restricted re-booking, pulling the currency back from record lows below 95 to 93.53 per dollar.
As the Middle Eastern conflict threatened energy supplies, Narendra Modi, the prime minister, chaired multiple Cabinet Committee on Security meetings while S. Jaishankar, the foreign minister, took calls from his Iranian, Qatari and UAE counterparts as tensions escalated over the Strait of Hormuz. Denis Manturov, Russia’s first deputy prime minister, visited New Delhi to offer increased oil and gas supplies and seal a five-year plan to boost bilateral trade to $100 billion by 2030.
Mr Modi and Amit Shah, the home minister, launched intensive campaigning across five states ahead of April 9 elections. Mr Modi attacked the Trinamool Congress’s “vote bank politics” in West Bengal and promised to implement women’s reservation in legislatures by 2029. Mr Shah announced extended stays in key states, signalling serious Bharatiya Janata Party investment in the contests.
Punjab Police arrested five suspects in a terrorist cell backed by Inter-Services Intelligence behind the April 1 blast at a BJP office in Chandigarh, with handlers in Germany and Portugal offering ₹2 lakh for the attack. Mr Shah declared India “Naxal-free,” claiming the entire Maoist leadership had been eliminated except one fugitive, with 706 killed and 4,839 surrendering over three years.
Mr Modi opened India’s first major semiconductor facility this week, inaugurating a ₹3,300 crore plant in Gujarat with capacity to produce 6.3 million chips daily. The plant marks progress in the government’s push for technology self-reliance, though India remains far from major chip-making powers.
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- Congress internal strife: Raghav Chadha removed from AAP leadership amid BJP allegations — Aam Aadmi Party (AAP) removed Raghav Chadha from his deputy leader position in Rajya Sabha, with party leaders suggesting he was ‘afraid’ of BJP and Mr Modi. The move has sparked speculation about internal party dynamics and Chadha’s political future. (news.abplive.com)
- Pakistan threatens Kolkata strike as Operation Sindoor anniversary approaches — Pakistan’s Defence Minister Khawaja Asif warned of targeting Kolkata in response to any Indian ‘misadventure,’ prompting Indian officials to remind Pakistan of last year’s Operation Sindoor military response. Defence Minister Rajnath Singh warned of ‘unprecedented action’ against any Pakistani aggression. (india.com)
- Leander Paes joins BJP ahead of West Bengal elections — Tennis legend Leander Paes joined BJP just days before West Bengal assembly elections, switching from the Trinamool Congress (TMC). The move comes as BJP seeks to make inroads in the traditionally left-leaning state where it has struggled to win power. (dw.com)
- Indian defence exports surge 62% to record $4.1 billion — India’s defence exports reached a record ₹38,424 crore ($4.1 billion) in fiscal year 2025-26, up 62% from the previous year. The growth reflects increasing global acceptance of Indian-made defence products and the sector’s integration into international supply chains. (thehindu.com)
- Digital Census 2027 begins as Modi completes self-enumeration — Mr Modi completed his self-enumeration for the first phase of Census 2027, marking India’s first digital census. The Houselisting and Housing Census phase will cover 784 districts across 36 states and Union Territories, with citizens empowered to self-enumerate their household details. (indianexpress.com)
Notes
Notes
2026 Assembly Elections: Modi, Amit Shah campaign across five states as voting approaches
March 31 – April 03, 2026
West Asia crisis: Modi chairs emergency security meetings as Jaishankar holds diplomatic talks
March 27 – April 05, 2026
Russian Deputy PM Manturov visits India, offers increased energy supplies amid West Asia crisis
March 31 – April 01, 2026
Congress internal strife: Raghav Chadha removed from AAP leadership amid BJP allegations
March 31 – April 02, 2026
Modi inaugurates semiconductor facility and announces women's reservation implementation by 2029
March 30 – April 03, 2026
Amit Shah declares India 'Naxal-free' as government claims success against left-wing extremism
March 30–31, 2026
Other
Pakistan
Donald Trump called General Asim Munir his “favourite field marshal” as Pakistan expanded its mediation of the US-Iran conflict, but the diplomatic success has created new costs with Gulf partners.
Pakistan has become the sole communication channel between Washington and Tehran, sharing ceasefire proposals and offering to host peace talks in Islamabad. Reports suggest a potential 45-day ceasefire proposal. But during General Munir’s visit to Abu Dhabi, UAE leaders questioned Pakistan’s Iran engagement, noting that the Emirates faced direct fallout from the conflict while Pakistan appeared to support Tehran. Two billion dollars in UAE financial support could be at risk.
At home, the war’s economic effects forced the government to retreat. Fuel prices surged 42.7% to 485 rupees per litre, triggering protests in Punjab including Lahore. Shehbaz Sharif, the prime minister, cut prices by 80 rupees, announced free public transport for a month, and distributed relief funds through digital wallets — the same pattern of retreat the regime has used before.
Security operations continued as usual. Forces killed 21 militants in intelligence-led operations across Bara, Bannu, and North Waziristan under the Azm-e-Istehkam campaign. The navy commissioned its second MILGEM-class corvette and finished a week-long exercise with Chinese naval forces. Meanwhile, Imran Khan filed applications for court-ordered lawyer access, claiming no legal meetings since December as his restrictions continue.
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- Pakistan leaders extend Easter greetings, reaffirm commitment to minority rights — Pakistani leaders extended Easter greetings to the Christian community, highlighting their contributions to national development and reaffirming the government’s commitment to protecting minority rights. (pakistantoday.com.pk)
- Pakistan marks 47th death anniversary of PPP founder Zulfikar Ali Bhutto — Pakistan observed the 47th death anniversary of Zulfikar Ali Bhutto, the former prime minister and Pakistan People’s Party (PPP) founder. Asif Zardari, the president, Bilawal Bhutto, and other leaders paid tributes, emphasising his role in drafting the 1973 Constitution and democratic legacy. (nation.com.pk)
- Bilawal Bhutto condemns Iran war, calls for political unity amid economic challenges — Bilawal Bhutto-Zardari, the Pakistan People’s Party (PPP) chairman, condemned the ‘illegal’ US-Israeli war on Iran, warning of global spillover effects. He called for political unity and announced party support for mini-budget measures to address economic challenges caused by the regional conflict. (tribune.com.pk)
- Pakistan’s Deputy PM Ishaq Dar sustains fracture during diplomatic reception — Ishaq Dar, the foreign minister and deputy prime minister, suffered a hairline shoulder fracture after falling during a reception for his Egyptian counterpart. Despite the injury, he continued his diplomatic engagements throughout the day. (thehindu.com)
- ISI-backed module behind Chandigarh BJP office blast, five arrested — Punjab Police arrested five individuals linked to the April 1 grenade attack at Chandigarh BJP office. Investigations reveal Pakistan’s ISI backing with foreign handlers in Portugal and Germany directing the operation. (ndtv.com)
- Pakistan shares ceasefire framework proposal to end US-Iran war — Pakistan shared a ceasefire framework as the sole communication channel between US and Iran. Sources indicate a potential 45-day ceasefire as part of a two-phase deal, with all elements requiring agreement through Pakistan’s mediation. (tribune.com.pk)
Notes
Notes
Pakistan emerges as key mediator in US-Iran war with Asim Munir leading diplomatic efforts
March 29 – April 02, 2026
Pakistan faces severe fuel price crisis as PM Shehbaz announces relief measures amid regional tensions
April 1–2, 2026
Imran Khan seeks urgent court access to lawyers, challenges sentences in corruption cases
April 1–2, 2026
Pakistan security forces kill 21 militants in Khyber Pakhtunkhwa operations
March 31 – April 02, 2026
UAE expresses displeasure over Pakistan's Iran tilt, threatens \$2 billion support withdrawal
March 31 – April 01, 2026
Other