Middle East Markets Tumble Amid Regional Tensions, Energy Supply Fears

Middle Eastern stock markets experienced a downturn following escalating regional tensions, particularly impacting investor sentiment in the Gulf, Egypt, and Jordan.

The declines were triggered by a combination of geopolitical concerns and anxieties over energy security, with the Saudi market, TASI, initially plummeting over 400 points before recovering slightly to close down 2.6 percent, or 280 points, at approximately 10,400, amidst trading volumes of around 4 billion riyals.

Several key stocks in Saudi Arabia also saw significant drops, with Al Rajhi Bank, Saudi National Bank, and ACWA Power falling between 3 and 6 percent. However, Saudi Aramco bucked the trend, reversing an initial decline to close up by around 3 percent, buoyed by expectations of rising oil prices.

Across the Gulf, Bahrain's index fell by 0.99 percent, while Muscat's index decreased by 1.42 percent, reflecting widespread caution. Trading in Kuwait was suspended until further notice due to the prevailing circumstances, with authorities citing the need to protect investors and ensure market stability. Qatar's stock exchange was closed for a bank holiday.

In Egypt, the benchmark index initially fell by approximately 5 percent before recovering to close down 2.5 percent. Jordan's Amman Stock Exchange also saw a decline of 1.12 percent.

Concerns about energy supplies intensified as Israel halted gas exports to Egypt, forcing the shutdown of two major gas fields following regional attacks. Egypt's Ministry of Petroleum stated it has diversified its gas supply sources as a proactive measure to secure domestic energy needs, implementing steps to meet market demand for natural gas and petroleum products.

Jordan's Minister of Energy and Mineral Resources, Dr. Saleh Al-Kharabsheh, reported that switching to diesel from natural gas would cost the National Electric Power Company approximately 1.8 million Jordanian dinars (around $2.54 million) daily, while assuring that the Kingdom maintains sufficient strategic reserves and faces no technical issues in supplying energy.