Saudi Arabia's Tadawul All Share Index closed 0.2% lower, while Qatar's benchmark dropped 1.5% to its lowest level since May 2020. The selloff came despite elevated oil prices, highlighting h
Saudi Arabia's Tadawul All Share Index closed 0.2% lower, while Qatar's benchmark dropped 1.5% to its lowest level since May 2020. The selloff came despite elevated oil prices, highlighting how geopolitical risks can outweigh the potential benefits of expensive crude for Gulf economies.
Saudi Stocks Fall After Deadly Riyadh Airport AttackSaturday's missile attack on King Khalid International Airport killed 12 people and injured more than 300, making it Saudi Arabia's deadliest such attack in over a decade. Yemen's Iran-aligned Houthi movement claimed responsibility as fighting intensified across the region.
A second incident on Sunday involved an unidentified projectile striking the airport's Terminal 4 and causing a fire. Saudi authorities also reported intercepting a cruise missile nearby, while airport operations remained suspended.
Saudi Arabia's main equity benchmark recovered from steeper intraday losses but still finished lower. Saudi National Bank declined approximately 1.1%, while oil giant Saudi Aramco lost 0.2%.
Qatar experienced a sharper decline as investors reassessed regional risks. The broader selloff also reached Egypt, where the blue-chip EGX30 index fell 2%.
Why Are Gulf Stocks Falling Despite High Oil Prices?Higher crude prices normally support government revenue and profitability for major Gulf oil producers. However, attacks on airports, pipelines and shipping infrastructure create additional risks that higher prices cannot necessarily offset.
Saudi Arabia has been central to the recent Gulf export recovery, with regional shipments reaching more than 81% of pre-war volumes in September. Renewed attacks threaten that progress by increasing transportation costs and uncertainty around future deliveries.
The region also faces pressure from disrupted maritime routes, particularly the Strait of Hormuz. Tanker operators have already faced unusually expensive and dangerous journeys, with some sailors reportedly receiving large risk bonuses to transport crude.
The distinction matters for investors: higher oil prices may benefit exporters, but rising security costs and prolonged disruption can undermine economic activity.
Oil Infrastructure Risks Raise Stakes for Saudi AramcoThe attack comes as major energy companies reconsider their exposure to regional security threats. Senior executives from ExxonMobil, Shell, BP and TotalEnergies withdrew from an international energy congress in Riyadh following the airport strike, according to the Financial Times.
Saudi Aramco has already warned that global oil inventories are unusually depleted, leaving markets more vulnerable to additional supply disruptions.
