Dubai Restaurants Feel the Heat as Iran War Disrupts Supply Chains
Dubai— Restaurants across Dubai are cutting menus, raising prices and relying more heavily on local ingredients as the war in Iran and the continued closure of the Strait of Hormuz disrupt food imports, raise freight costs and weaken customer demand in one of the Gulf’s largest dining markets.
Chefs and restaurant operators told Reuters that soaring air freight costs and reduced tourist arrivals were squeezing margins, forcing businesses to scale back operations and rethink sourcing strategies in a city where imported ingredients are central to much of its high-end culinary identity.
At Mexican restaurant Lila Molino in Dubai’s Alserkal Avenue district, chef Shaw Lash said staples such as avocados and tomatillos essential to her menu have become harder to source and significantly more expensive since the conflict escalated in late February.
“The reality is cargo has gotten more expensive, gas prices have gone up, the Strait of Hormuz is still blocked,” Lash said. “This is really creating a problem for us as far as our supply.”Lash said she had reduced production, cut payroll costs and shifted toward smaller ingredient purchases while focusing more on grocery products and take-home fajita kits, which have helped offset weaker dine-in demand.
The UAE imports more than 80% of its food consumption, making it highly vulnerable to disruptions in maritime trade. Although a ceasefire between the United States, Israel and Iran took effect on April 8, the Strait of Hormuz through which much of the region’s imports pass remains effectively closed, creating delays and pushing transport costs sharply higher.
Dubai’s full-service restaurant market was valued at about $9.5 billion last year, according to market researcher Mordor Intelligence, which had projected 20% growth for 2026 before the war began. Industry operators now say those expectations are under pressure.
A survey by Juniper Strategy and the Global Restaurant Investment Forum found UAE foodservice operators reported an average 27% drop in demand compared with a year earlier, while supplier cost increases averaged 13%. The study covered 30 industry leaders operating around 400 restaurants between April 1 and April 8.
Tourist-heavy districts and business zones were under the greatest pressure, while restaurants in residential neighborhoods showed stronger resilience and, in some cases, growth.The Dubai Department of Economy and Tourism said some operators were managing a “period of disrupted footfall” and adapting through promotions, alternative service formats and community-driven offers to maintain customer traffic.
At fusion restaurant Jun’s Dubai, chef Kelvin Cheung said sourcing imported seafood such as Norwegian scallops and premium Japanese fish had become significantly more expensive because sea routes were no longer reliable.“Your only option was then to fly air freight, which would increase our costs by about thirty, thirty-five percent,” he said.
Cheung has shifted toward locally sourced fish and launched a six-course menu priced at 225 dirhams ($61) to maintain affordability while preserving customer traffic. He said the restaurant had retained all staff despite the slowdown.Air freight rates on some routes have risen by as much as 70%, driven by higher jet fuel prices and disruptions to oil shipments from the Gulf.
Tourism, a major driver of spending in Dubai’s luxury retail and dining sectors, has also weakened.“That massive influx of tourists who provide that extra boost of economy, of spend, across all industries is what we’re missing now,” Cheung said.
Food writer Courtney Brandt said the war had intensified structural weaknesses already present in Dubai’s restaurant market, including high fixed costs, dependence on tourism and oversupply in the premium dining segment.“We were due for a correction,” she said, noting that international restaurant groups with stronger financial backing may weather the downturn more easily than independent operators.
Some fine-dining restaurants, including venues inside the luxury Atlantis hotels on Dubai’s Palm Jumeirah, have temporarily closed for refurbishment, while others continue to launch new concepts, suggesting confidence in a medium-term recovery.Operators say business has started to improve gradually since the ceasefire and the reopening of schools, with signs of consumer confidence slowly returning across the city.
