Investor confidence across the Gulf took a hit on Wednesday as escalating military tensions between the United States and Iran triggered fresh market uncertainty, pushed oil prices higher, and raised fears of a wider economic fallout across the region.
Major stock markets in the Gulf closed lower after renewed clashes between Washington and Tehran threatened to derail recent efforts aimed at reducing tensions. Investors reacted cautiously as concerns grew over the impact of a prolonged conflict on trade, energy supplies, and regional stability.
US officials said American forces had targeted Iranian air defense systems, coastal surveillance facilities, and drone launch sites, while Iran’s Revolutionary Guards claimed responsibility for strikes on US military bases in Bahrain and Kuwait, where air raid warnings were activated.
The situation worsened after Washington withdrew a waiver that had allowed Iran to continue exporting oil to global markets. Tehran condemned the move, accusing the United States of violating commitments linked to efforts to end the conflict.
The escalation also disrupted maritime activities in the Gulf, with reports that a Qatari liquefied natural gas tanker faced an explosion risk, while a Saudi oil tanker suffered damage near the Strait of Hormuz. Authorities described the threat level to shipping through the strategic waterway as “severe.”
The rising tensions pushed global oil prices upward, with Brent crude increasing by 3.2 per cent to $76.56 per barrel during early trading.
Saudi Arabia’s benchmark index declined 0.2 per cent, affected by losses in banking stocks, although gains by energy giant Saudi Aramco helped reduce the impact.
Dubai’s main stock index dropped 1 per cent, driven by declines in major companies including property developer Emaar Properties and Dubai Islamic Bank.
The Abu Dhabi market also ended lower, with Alpha Dhabi Holding among the notable decliners, while Qatar’s benchmark index slipped as shares of Qatar National Bank, the country’s largest lender, weakened alongside the broader market.
Analysts warned that continued military escalation could further pressure regional markets, increase energy price volatility, and deepen concerns about global economic stability.
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