Most Gulf markets in red as US-Iran conflict escalates

Most Gulf bourses ended lower on Thursday as a fresh round of U.S. strikes on Iranian military sites stoked fears of a full-blown conflict.

The U.S. attacked Iran’s coastal defenses and missile sites on Wednesday after reinstating a naval blockade of Iranian ports, while Tehran warned it could further restrict regional energy exports, declaring that it was in an “existential war” with Washington.

Hostilities have escalated since Saturday, when Iran announced it had closed the Strait of Hormuz. Ongoing military operations have further prevented vessels from passing through the critical waterway, which, before the war, carried roughly a fifth of the world’s oil and gas shipments.

Iran has asked Yemen’s Houthi movement to be prepared to shut the Red Sea oil route if the United States targets Iranian power infrastructure, three sources told Reuters on Thursday, raising a serious new threat to global energy supplies.

Dubai’s main share index dipped 0.3%, led by a 2.4% slide in sharia-compliant lender Dubai Islamic Bank .

Milad Azar, market analyst at XTB MENA, said reports of potentially broader U.S. operations may add further pressure. Investors remain focused on second-quarter earnings and Middle East developments, while uncertainty around Iran and the Strait of Hormuz is likely to keep overall sentiment restrained.

In Abu Dhabi, the index fell 0.5%.

Meanwhile, bunker fuel sales at the UAE’s Fujairah port in the first half of 2026 more than halved versus last year, after the U.S.-Iran war hit supplies at the key Middle Eastern ship refuelling hub located near the Strait of Hormuz.

Saudi Arabia’s benchmark index edged 0.2% higher, helped by a 0.2% rise in Al Rajhi Bank.

The U.S. State Department said on Wednesday that it had approved the potential sale of advanced precision kill weapon systems and related equipment to Saudi Arabia for an estimated $1.96 billion.

The Qatar Stock Exchange remained closed following the death of former emir Sheikh Hamad bin Khalifa Al Thani.

Outside the Gulf, Egypt’s blue-chip index rose 0.7%.