Gulf Markets Rise as Oil Concerns Ease

Most Gulf stock markets closed higher on Monday as easing concerns over energy disruptions and lower expectations of an immediate Federal Reserve rate hike improved investor sentiment, although tensions from the Middle East conflict remained.

Weaker-than-expected U.S. employment data and significant downward revisions to previous payroll figures reduced the probability of a Federal Reserve rate increase this month from 64% to below 20%, according to the CME FedWatch tool. However, traders continue to expect a possible rate move in December.

Gulf markets typically follow changes in U.S. monetary policy expectations because most regional currencies are linked to the U.S. dollar.

Oil Supply Concerns Ease

Middle East crude exports exceeded levels recorded before the start of the U.S.-Iran conflict on several days in late September, according to shipping data released Monday. The increase came despite continued vessel attacks in the Strait of Hormuz.

The release of oil reserves by G7 countries also helped improve supply expectations.

Dubai’s main stock index rose 0.1%, supported by Dubai Electricity and Water Authority, which gained 3.8%.

Abu Dhabi’s benchmark index increased 0.4%.

The UAE’s non-oil private sector recorded strong growth in September as stronger demand improved business pricing power, leading to the largest increase in selling prices in more than 15 years, according to a business survey.

Qatar’s benchmark index advanced 1.1%, led by Qatar National Bank, the Gulf region’s largest lender, which gained 1.2%.

Regional Markets Remain Resilient

Milad Azar, market analyst at XTB MENA, said most GCC equity markets remained resilient despite ongoing geopolitical uncertainty and stalled U.S.-Iran negotiations.

He noted that shipping disruptions in the Strait of Hormuz continue to weigh on investor confidence, with markets waiting for meaningful diplomatic progress. However, strong domestic economic fundamentals continue to support regional stocks.

Saudi Arabia was an exception, with the benchmark index falling 0.3%, pressured by a 1.5% decline in Al Rajhi Bank.

The decline came as Yemen’s Saudi-backed government launched a military campaign against Houthi forces. The Houthis claimed they had launched missile and drone attacks against Saudi Aramco facilities in Riyadh and Khurais, while describing the strikes as retaliation for Saudi-led coalition attacks in Yemen.

Despite the reports, Saudi Aramco shares gained 0.6%.

Egypt Markets Decline

Outside the Gulf region, Egypt’s main stock index fell 0.7%, with Commercial International Bank declining 0.7%.

Egypt’s non-oil private sector contracted more sharply in September as inflation pressures and geopolitical uncertainty affected output and new orders, according to a business survey.