Nobody in Agrabah could have seen it coming but the Genie died. Yes. It was very unexpected and tragic, but Aladdin and Carpet and Abu and Jasmine's friend/magic blue confidante passed away.
Aladdin and Jasmine had sat on their bed, holding each other, staring out the window Genie had just flown out of a few days ago, chipper as could be, in disbelief; trying to put the pieces together and coming up short. Abu was at Aladdin's feet, trying to think of ways to cheer up his companion but not knowing how. Carpet was nowhere to be seen, but everybody could hear crying behind all the couches and chairs.
And the Sultan, with his royal subjects' help, began preparing the funeral arrangements at once. A ceremony to commemorate the life of someone as big as the genie would take a few days-maybe even a week. There was much to be done.
Iago was there, too. Jasmine had put him in a cage, and for once, he had nothing snarky to say.