Most Gulf bourses in red as Middle East conflict escalates

Most Gulf stock markets closed lower on Wednesday as the intensifying Middle East conflict and mounting energy security risks weighed on investor sentiment.

The conflict escalated sharply after Houthi forces launched strikes across several Saudi cities, setting key oil installations ablaze and drawing a crucial U.S. ally deeper into hostilities.

The confrontation worsened after U.S. forces struck multiple Iranian oil tankers, triggering retaliatory attacks on commercial vessels and a U.S. military base in Jordan.

The multi-front escalation poses a severe threat to regional energy output and critical trade arteries. The attacks directly jeopardize crude transit through the Red Sea — a vital alternative route that has become increasingly strained as flows through the crucial Strait of Hormuz remain nearly blocked.

Saudi Arabia’s benchmark index fell 0.2%, hit by a 1.7% drop in the country’s biggest lender by assets Saudi National Bank.

Brent crude futures were up $2.77, or 2.83%, at $100.69 a barrel by 1033 GMT.

Banks including Goldman Sachs and Bank of America raised their oil price forecasts citing tightening supplies as crude rallied to multi-week highs.

Dubai’s main share index was down 0.3%, dragged down by a 1.8% slide in top lender Emirates NBD .

Fresh geopolitical flare-ups continue to fuel regional caution, as persistent tanker attacks in the Strait of Hormuz, maritime bottlenecks, and tit-for-tat strikes keep energy supply risks elevated, said Joseph Dahrieh, managing director at Tickmill.

“Attention remains focused on the Oman-Iran waterway management agreement and its implications for maritime security,” Dahrieh said.

Looking ahead, Dahrieh emphasized that geopolitical volatility will remain the primary headwind for GCC equities —capping sentiment during escalations, while any tangible de-escalation could unlock a rebound. Nonetheless, resilient domestic fundamentals are expected to provide a crucial buffer, limiting broader downside risks.

In Abu Dhabi, the index advanced 0.9%.

The Qatari index eased 0.1%, with petrochemical maker Industries Qatar retreating 1.9%.

Outside the Gulf, Egypt’s blue-chip index gained 0.6%.