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US‑Israel‑Iran war turns cloud infrastructure into battlefield, tech experts warn
There were reports of GPS jamming and spoofing affecting delivery platforms; motorists experienced erratic performance of digital map systems; netizens felt network degradation
- PUBLISHED: Thu 12 Mar 2026, 6:00 AM UPDATED: Thu 12 Mar 2026, 11:23 AM
[Editor's Note: Follow Khaleej Times live blog amid US-Israel-Iran war for the latest regional developments.]
Iran had announced it would target economic and banking interests linked to US and Israel in the Middle East, following an alleged attack on an Iranian bank. Ebrahim Zolfaqari, spokesperson for Tehran's Khatam al-Anbiya military command headquarters, warned people to stay one kilometre away from those banks.
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The impact of the US-Israel-Iran war on the global economy and banking sector, however, is not just in the physical destruction of infrastructure, industry experts warned, noting cyber warfare has been integrated into broader military strategies since the early 2000s.
“Coordinated attacks on hyperscale cloud facilities, the severing of submarine cable systems, and the effective closure of critical maritime chokepoints are threatening global markets and fracturing the digital and physical systems that have sustained three decades of globalisation,” noted Rayad Kamal Ayub, founder and managing director of Dubai- based cybersecurity consultancy Rayad Group.
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He told Khaleej Times, “the digital crisis intensified following drone strikes in early March that damaged three Amazon Web Services (AWS) facilities in the Middle East, disrupting enterprise connectivity across the region.
AWS confirmed the attacks caused structural damage and disrupted power delivery, triggering fire suppression systems that compounded equipment outages.
The attack on the data centre affected compute, storage and database workloads used by financial institutions, logistics firms and technology platforms. It was felt by many digital users – there were reports of GPS jamming and spoofing that affected parcel and food delivery platforms. Some motorists experienced erratic performance of digital map systems; netizens also felt network performance degradation.
Ayub noted, based on reports, some banks from across the globe experienced settlement delays. Energy traders watched tankers anchor rather than transit and some logistics firms reverted to manual tracking systems last used in the 1990s.
"This is the nightmare scenario we have war-gamed for years," said Ayub, underscoring: "When multiple digital corridors and cloud facilities degrade at the same time, redundancy collapses. You move from resilience mode to survival mode."
In an earlier Khaleej Times report, Ayub already warned that the US‑Israel‑Iran war may trigger unprecedented cyberattacks.
“Now, data centres are being treated as legitimate military targets—a shift that is forcing a fundamental reassessment of where and how digital infrastructure can be safely deployed,” he added.
Strain on trade routes
Meanwhile, the digital disruption is unfolding alongside mounting strain on physical trade routes. The Strait of Hormuz, where about 20 per cent of global oil consumption flows, is practically closed, following reported attacks on commercial vessels.
On Tuesday, Amin Nasser, CEO of Saudi Aramco, warned of “catastrophic consequences” should the closure of the Strait of Hormuz continues. “Any disruption to the flow of oil through Hormuz doesn't just affect the Gulf producers—it affects the entire global economy. The world simply cannot absorb a supply shock of that magnitude," he added.
Energy analysts say Asia faces high exposure because both crude oil and liquefied natural gas shipments depend heavily on predictable Hormuz transit schedules.
Data from Clarksons Research show a large crude carrier waiting near Gulf loading zones is incurring operating loss of about $60,000 per day while anchored, increasing pressure on freight markets and creating schedule uncertainty that ripples through Asia's refining and petrochemical sectors.
"If disruption persists, the premium migrates from insurance to freight to physical supply timing," said Jonathan Stern, research fellow at the Oxford Institute for Energy Studies.
The closure of Strait of Hormuz will disrupt trade flows worth around $2.8 trillion (Dh10.3 trillion) annually, according to estimates compiled by Lloyd’s and Discovery Alert.
Manage operational stress
According to reports, banks and other financial institutions manage degraded connectivity by “rerouting transactions, prioritising critical settlement traffic and expanding manual verification procedures.”
Analysts at Morgan Stanley said infrastructure instability introduces a new operational risk category for globally integrated trading platforms. "The market has historically priced connectivity as a constant utility," the bank wrote in a client note.
Cloud providers are accelerating diversification strategies including new subsea cable routes bypassing high-risk maritime corridors. “The industry is optimised for efficiency," noted Amajit Gupta, CEO of Lightstorm Telecom Ventures. "What we are seeing now is a structural repricing of resilience."
For now markets continue to function, but with reduced redundancy and higher volatility. "The global economy is still operating,” underscored Ayub. "But it is operating with thinner margins of safety than most executives realized existed,” he added with caution.
(With inputs from Reuters)
