By the end of last year, 2026 seemed poised to be the year of the Gulf for the art market. In December 2025, Sotheby’s held the first edition of Abu Dhabi Collectors’ Week, netting $133 million in the process. This past February, Art Basel held the inaugural edition of Art Basel Qatar. And, in November, Frieze is set to host the first edition of its newly rebranded fair Frieze Abu Dhabi.
But then, after weeks of saber rattling, the US and Israel launched strikes on Iran. The Islamic Republic responded with attacks on the United Arab Emirates, Qatar, Bahrain, and Saudi Arabia. While the US and Iran are engaged in shaky ceasefire talks, the Gulf’s reputation as a low tax, safe place to do business in the region suddenly doesn’t seem so secure.
The biggest domino to fall in the art world, so far, has been Art Dubai, the region’s premier fair prior to the launch of Art Basel Qatar and Frieze Abu Dhabi. Set to celebrate its 20th anniversary this year, the fair was postponed from April to May and scaled back from more than 120 galleries in 2025 to just 50 after roughly 75 exhibitors withdrew, according to the Art Newspaper. Its revised edition is set to run from May 15-17 at Madinat Jumeirah.
While Frieze has not yet spoken on its Abu Dhabi fair, clear signals of strain in the Gulf market have appeared in the broader luxury sector, which similarly targeted the region as a growth engine, as buying has slowed in Europe and Asia.
According to a report Sunday in the New York Times, LVMH, the Paris-based conglomerate that controls Louis Vuitton, Tiffany & Co., and Bulgari, among others, reported first-quarter revenues of €19.1 billion ($22.4 billion), a 6 percent year-over-year decline on a reported basis, per LVMH’s own earnings release and confirmed by CNBC. Fashion took a particular hit, with LVMH’s Fashion & Leather Goods business group down 2 percent, according to the luxury conglomerate’s earnings report.
Kering Group, another French luxury group that owns Gucci, Bottega Veneta, and Yves Saint Laurent, reported a drop of 11 percent in revenue last quarter, and installed a “crisis unit” to manage its Middle East business. “In the Middle East, it’s tourist flows that are suffering more than the locals,” Armelle Poulou, Kering chief financial officer, told investors this month, according to the Times.
It bears mentioning that LVMH is owned by Bernard Arnault, the ninth wealthiest person in the world and one of the world’s foremost art collectors. François Pinault, another top collector, owns Kering via his Groupe Artémis, which also owns Christie’s.
Analysts at financial research firm Bernstein have projected Gulf luxury sales could fall as much as 50 percent this year, as reported by Fortune. While art was not specifically mentioned, the art market broadly tracks with the luxury sector.
The US–Israel–Iran War has had broader impacts on the art world, beyond its Gulf plans. Shipping and insurance costs for artworks moving through the region have surged as a result of the conflict. International air freight costs for fine art spiked as much as 300 percent in the opening weeks of the war, according to Wang Jianmin, founder of Chinese art logistics company Top Space Art Service.
At the start of this year, 76 percent of art market experts named the Gulf as the most bullish region heading into 2026, with “minimal downside risk,” according to ArtTactic’s annual survey. One has to wonder if those experts would change their responses now.
