Muscat: Regional equities showed a subdued performance as investors reacted to heightened instability in the Middle East. Iran’s Revolutionary Guards confirmed attacks on petrochemical plants in the UAE, Kuwait and Bahrain, warning that strikes targeting U.S. economic interests would intensify if civilian sites in Iran were hit again.
Tensions further escalated after Washington announced the rescue of a second airman shot down over Iran, with U.S. President Donald Trump adopting a firmer stance, raising concerns of a broader conflict.
Markets across the Gulf reflected this uncertainty. Qatar’s benchmark index fell 0.7%, dragged down by losses in major banking stocks. Qatar National Bank declined 0.6%, while Doha Bank plunged 6.9% as it traded ex-dividend.
Saudi Arabia’s benchmark index ended flat after volatile trading, even as the Kingdom continued to navigate disruptions around the Strait of Hormuz. However, economic indicators pointed to strain, with the non-oil private sector contracting in March for the first time since August 2020, highlighting the impact of ongoing regional conflict on supply chains.
Oil markets reacted sharply to the rising tensions. Brent crude surged nearly 8% in the last trading session before the Easter holiday, driven by fears of extended supply disruptions after the United States signaled continued military action against Iran.
Meanwhile, OPEC+ has provisionally agreed to increase oil output by 206,000 barrels per day in May. However, the move is expected to have limited impact, as several member nations remain unable to significantly boost production amid the ongoing U.S.-Israeli conflict with Iran.
Elsewhere in the region, Kuwait’s stock index slipped 0.4%, while Bahrain’s index declined 0.5%. In Kuwait, Iranian drone attacks reportedly caused fires and severe material damage at several operating units, according to Kuwait Petroleum Corporation.
Outside the Gulf, Egypt’s market stood out as an exception, with its benchmark index gaining 1.9%. The country’s central bank also held interest rates steady, pausing a year-long easing cycle due to rising inflation risks linked to regional instability and increased energy costs.