Gulf stocks tumble for second day and bond prices slide

• Qatar index tumbles 4.3%
• Saudi Aramco rises for second day
• Sovereign bond prices decline

Gulf markets extended losses on Monday morning as investors reacted to escalating regional conflict following US and Israeli strikes on Iran, with airline and petrochemical stocks leading declines and sovereign bond prices also under pressure.

Shares in Kuwait’s Jazeera Airways fell 3.9 percent, weighing on Kuwait’s premier market benchmark. The measure dropped 1.4 percent to its lowest level since June 2025.

In Saudi Arabia, low-cost airline Flynas dropped 1.8 percent, taking its losses to 8.6 percent this week. The carrier said on Sunday it had suspended “a number of flights” to “selected destinations”.

Aeroplane-tracking websites indicate flights continue to arrive and depart from Riyadh’s King Khalid International Airport, although the airport’s website was offline.

Airspace over Iran, Israel, Iraq, Qatar, Bahrain, Kuwait, Syria and the UAE remained closed to commercial air traffic on Monday.

The US and Israeli strikes, which killed Iranian Supreme Leader Ali Hosseini Khamenei, prompted an unprecedented military response from Tehran. Iranian drones and missiles struck multiple targets across the region including in the UAE, Saudi Arabia, Kuwait, Qatar and Bahrain.

More broadly, Saudi Arabia’s stock index slipped 0.9 percent to a two-month low as 18 of 22 sector sub-indices declined.

Sabic fell 0.6 percent, while smaller petrochemical producers such as Advanced Petrochemical Co and Saudi Kayan also retreated.

Petrochemical consumption is closely tied to macroeconomic trends and Saudi exports are mostly transported by ship. So the renewed Middle East conflict – which threatens to roil the global economy – could depress demand for petrochemicals and Saudi producers may struggle to maintain exports should the war prove prolonged.

Saudi Aramco rose for a second session, climbing 1.2 percent as investors bet surging crude prices would translate into bigger profits for the world’s largest listed oil company.

Brent crude rose 8 percent – or nearly $6 – to $79 per barrel on Monday after Iran claimed the Strait of Hormuz was closed to vessels.

About 20 percent of global oil supplies transit through the strait. The channel marks the entrance to the Gulf and is bordered by Iran to the north and Oman’s Musandam peninsula to the south. At its narrowest point, the strait is about 34km wide, although navigable shipping lanes are only 3km across.

Ship-tracking websites showed few tankers near the strait on Monday.

Oil prices could top $100 “if tanker flows are not quickly restored”, energy consultant Wood Mackenzie wrote in a note.

Iran’s efforts to close the waterway have led insurers to withdraw coverage, “effectively halting tanker traffic”, it said.

“The key question is when vessels re-establish export flows,” said Alan Gelder, Wood Mackenzie’s senior vice president of refining, chemicals and oil markets.

“No doubt, tanker rates and insurance will increase dramatically, but these costs would only be a small part of the oil price impact associated with a curtailment of oil flows if they last for more than a few days.”

• Conflict forces Emirates to extend flight cancellations
• ‘Business as usual’ as Saudi Arabia braces for further attacks
• UAE data centre suffers outage after impact by ‘objects’

Qatar’s stock index plunged 4.3 percent, slumping to an eight-month low in a market-wide rout. Maritime and logistics company Qatar Navigation fell 6.3 percent, bank stocks made declines of 3 to 5 percent and defensive stocks such as Vodafone Qatar also tumbled.

UAE market regulators ordered stock exchanges in Abu Dhabi and Dubai to remain closed on Monday and Tuesday.  

Earlier, spot gold prices jumped almost 2 percent to $5,368 per ounce, reaching the highest level in more than four weeks.

Regional sovereign bond prices also fell.

A 10-year UAE federal government bond slipped 0.6 percent to a one-month low.

A 30-year Saudi government bond slid 1.9 percent, while a 30-year Egyptian bond dropped 2.2 percent to its lowest level since early November 2025.