Gulf Markets Surge: How U.S. Strikes on Iran Strengthened Regional Resilience

Markets in the Middle East reacted positively on Sunday after the U.S. escalated its involvement in the conflict between Israel and Iran. The U.S. targeted key Iranian nuclear sites, prompting a surge in Israeli stocks. Investors seemed hopeful that this action could lead to a faster resolution to the conflict, even as Iran’s Foreign Minister warned that the country wouldn’t negotiate under attack.

The TA-125 index rose by 1.77%, and the blue-chip TA-35 increased by 1.5%. Meanwhile, in the Gulf region, Saudi Arabia’s Tadawul started strong but ultimately closed down by 0.3%. Qatar’s market was slightly up by 0.2%, and Bahrain’s index also gained 0.3%. Bahrain, home to the U.S. Central Command, advised residents to work from home and use main roads only if necessary for public safety.

Egypt’s EGX30, on the other hand, stood out as a strong performer, climbing 2.7%.

Analysts like Fadi Arbid, from Amwal Capital Partners, noted that the Gulf states are focusing on seeking peace and condemning aggression. He believes this approach helps shield the Gulf from immediate conflict impacts, suggesting a positive outlook in the medium term.

Statements from Gulf countries emphasized calls for de-escalation. The UAE urged an end to rising tensions, while Saudi Arabia and Qatar expressed their concerns regarding the conflict’s escalation.

Investors are also closely monitoring the oil market. With the U.S. strikes increasing geopolitical risks, oil prices are expected to rise. Giovanni Staunovo from UBS indicated that oil would likely see a “risk premium” in the short term due to the uncertainty surrounding the conflict. He mentioned that since Israel attacked Iran, Brent oil futures have jumped by 11%.

Despite current stability in tanker traffic through the Strait of Hormuz—important for global oil supply—many are wary of potential disruptions. Edward Bell, chief economist at Emirates NBD, predicts significant volatility in oil prices in the coming days.

As the situation unfolds, market reactions will likely continue to be shaped by headlines, keeping investors on edge.



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