DUBAI (Dispatches) -- Most Persian Gulf stock markets edged higher on Wednesday, extending a modest recovery as investors bet on hopes of a pause in the U.S.-Israeli war on Iran, even as regional leaders intensified efforts to dissuade Washington from a fresh escalation they fear would devastate their economies.
Saudi Arabia’s benchmark index reversed early losses to trade 0.4% higher, with oil major Saudi Aramco advancing 0.9%. Dubai’s main share index was little changed in choppy trade, while Abu Dhabi edged up 0.1%. The Qatari index declined 1%, weighed down by a 0.8% slide in Qatar National Bank. 
8The gains followed a stronger close on Tuesday, when Persian Gulf bourses rallied after U.S. President Donald Trump said military action against Iran was not needed “at this point,” citing appeals from regional allies.
The fragile optimism belies the scale of damage already inflicted. A report by Allianz Trade published Wednesday estimated material damage across the Persian Gulf region at just over $200 billion, concentrated in energy infrastructure dependent on the Strait of Hormuz. 
More than 80 energy facilities were affected, chiefly in Kuwait, Qatar and Bahrain, with a third severely damaged. The total cost of the war is projected to reach $790 billion for Persian Gulf states through 2030, a cumulative shortfall of 5.9% of GDP against pre-war trends.
Behind the market jitters lies an intensifying diplomatic push. Saudi Crown Prince Muhammad bin Salman, UAE President Sheikh Muhammad bin Zayed Al Nahyan, Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and Turkish President Tayyip Erdogan have reportedly spoken to Trump, urging him to give negotiations more time. 
Israel’s terrorist prime minister Benjamin Netanyahu, by contrast, has been calling Trump daily to press for a resumption of terrorist strikes, according to a Financial Times report citing people briefed on the discussions.
“The regional leaders are telling him not to escalate and prioritize negotiations,” one person briefed on the discussions was quoted as saying. Trump subsequently indicated that Qatar, Saudi Arabia, the UAE, Bahrain and Kuwait preferred maintaining the current situation rather than a fresh escalation.
Persian Gulf governments have ample reason for caution. The war has already struck tourism, aviation and real estate, with more than 15,000 flights cancelled across seven major airports in the first week of March alone, and Dubai hotel occupancy collapsing to single digits. 
A senior UAE official warned this week that a comprehensive political settlement appeared difficult, and the region should “prepare for a long period of uncertainty”.