Gulf stock markets declined as tensions between Iran and the US escalated into their third week, raising concerns over regional stability and energy security. The Gulf Cooperation Council (GCC) bourses, including Saudi Arabia’s Tadawul, fell by 1.2% amid fears of prolonged conflict disrupting oil exports and global supply chains. Analysts highlighted that military posturing and potential sanctions on Iran could further destabilize the region, impacting investor confidence. The war’s economic fallout, including higher oil prices and geopolitical risks, has weighed on risk assets globally. The decline in Gulf equities reflects broader market anxiety about the war’s duration and its spillover effects on global growth. Traders are closely monitoring developments in oil markets, as any disruption to OPEC+ production could drive crude prices higher, benefiting Gulf economies in the short term but harming global demand. However, prolonged conflict may lead to sanctions on Iranian oil and countermeasures, creating volatility in energy markets. For MENA investors, the situation underscores the need to hedge against geopolitical risks and monitor central bank policies. The Saudi Arabian Monetary Authority (SAMA) may adjust liquidity measures to stabilize domestic markets, while Gulf funds could shift toward safer assets. Key indicators to watch include OPEC+ production levels, US-Iran diplomatic talks, and oil price movements, which will shape regional equity performance in the coming weeks.

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