Two things stood out at a business conference this week in Dubai. For one, the event was sparsely attended, highlighting the dearth of foreign visitors and the thinning ranks of bankers, executives, and investors in the city. The second was that, along with the platitudes about resilience, attendees were unusually honest about the Gulf’s predicament.

Most economic indicators still don’t reflect the extent of the damage the region has suffered, but they do point to weaker confidence across much of the Gulf. While equity markets have largely recovered, few expect a quick return to prewar growth trajectories: Simon Ballard, chief economist at First Abu Dhabi Bank, said the UAE has avoided a contraction thanks to its economic diversification, but the recovery is likely to be gradual rather than a swift, V-shaped rebound.

The slowdown is showing up across sectors. Construction costs have spiked, according to Aliaa Elesaaki of real estate consultancy Knight Frank, forcing developers to consider delaying handovers while they wait for prices to recede. Lenders have also become more cautious: Travel booking platform WEGO has seen strong demand in Saudi Arabia and Egypt, its CEO said, but that didn’t stop its bank from pulling a $10 million credit line “immediately when the shots were fired.”

Iran’s strike on Kuwait’s international airport on Wednesday — the authorities released terrifying footage of the attack — was a reminder that the ceasefire is not a full cessation of the conflict, or as US President Donald Trump put it: In the Middle East a ceasefire means “you’re shooting in a more moderate manner.” It’s a flip definition, but for businesses operating in the region, reality matters more than semantics.

One Dubai-based entrepreneur told me UAE founders are increasingly looking to shift some operations to Saudi Arabia, which has emerged as one of the region’s safer markets. Its airports have remained operational, its economy benefited from a larger citizen population (rather than relying on expatriates), and Tehran has been more cautious in confronting the kingdom directly.

Outside the region, however, those distinctions don’t necessarily matter and foreign investors often view the Gulf as a single market. Shane Shin, founding partner of venture capital firm Shorooq Partners, said international VCs have disappeared because they “don’t want to touch geopolitical risk.” Now that the Iranian threat is visible — and likely persistent as long as Tehran sees disrupting the Gulf as a useful tool — valuations will have to adjust.

The risk premium has risen, Shin said, but prices have yet to fully reflect it. Rare real talk at a Dubai conference.