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Saudi Arabia’s Tadawul index closed 2.21 percent lower on March 1 after opening down as much as 4.6 percent as investors assessed risks from the previous day’s coordinated strikes on Iran by the US and Israel along with Iranian retaliation. Arabian Drilling shares slumped more than 4 percent and budget carrier Flynas fell 6.92 percent in Riyadh while Saudi Aramco gained 3.37 percent, according to a report by The National. Oman’s Muscat Exchange ended the session 1.4 percent lower after an intraday retreat of 3 percent and Bahrain’s main gauge dropped 1 percent. Kuwait’s stock market suspended trading until further notice without providing an explanation while Qatar’s exchange remained closed for a bank holiday and UAE markets stayed shut for the weekend with trading set to resume the following day.
Analysts warned that the conflict had pushed regional bourses into uncharted territory as Tehran targeted US bases in the Gulf and sites in the UAE. “Iran’s continuing missile and drone strikes on GCC countries have pushed markets into uncharted territory,” Iridium Advisors said in a note carried by The National. The advisory firm added that potential closure of the Strait of Hormuz and regional airspace disruptions were raising immediate questions around logistics, supply chains and business continuity. Khaled El Khatib, chief market analyst at easyMarkets, told The National that the UAE and Saudi Arabia’s exposure to international markets made them the most susceptible to fast and volatile reactions while Ahmed Azzam, head of market research at Equiti Group, said Adnoc’s announcement of uninterrupted operations highlighted what nervous investors were watching.
US Energy Information Administration data places average oil flows through the Strait of Hormuz at 20.9 million barrels per day in the first half of 2025, equivalent to about 20 percent of global petroleum liquids consumption.[[1]](https://www.eia.gov/international/analysis/special-topics/world_oil_transit_Chokepoints) Iran sits on the northern shore of the waterway and wields significant influence over one-fifth of the world’s daily oil transit. Arth Malani, chief executive at Northstar Insights, told The National that even a 20 percent to 30 percent dip in Gulf exports due to transit disruptions could lead to severe spikes in oil prices since unlike the Red Sea there is no alternative route. The defining variable remains the Strait of Hormuz and any closure would prove far more consequential than previous Houthi disruptions in the Red Sea, Malani added.
Brent crude closed at $72.48 a barrel and West Texas Intermediate at $67.02 a barrel on the Friday before the volatile Gulf opening, according to The National. Vijay Valecha, chief investment officer at Century Financial, said he expected benchmark crude grades to jump between 10 percent and 15 percent on the Monday opening as financial markets priced in the geopolitical risk premium. LPL Research analysis of past geopolitical events found that markets often register initial declines during Iran-related escalations such as the 2019 Saudi Aramco drone strike before partial recoveries in subsequent weeks.[[2]](https://www.lpl.com/research/blog/iran-escalation-how-markets-have-reacted-to-geopolitical-events.html) Reuters reporting on investor sentiment indicated that while knee-jerk moves occurred some asset price reactions moderated later in sessions as participants had anticipated potential action against Iran.[[3]](https://www.reuters.com/world/middle-east/investors-brace-bigger-backlash-middle-east-war-2026-03-01/)
Dubai Airports suspended all flight operations until further notice and several global airlines halted services across the region as the conflict unfolded, The National reported. Stephen Fallon, founder of DBM Consulting, told the publication that the UAE relies on the frictionless movement of people and goods describing the situation as very disruptive to the economic model. Ahmed Azzam warned that if uncertainty persisted the focus would shift from headline volatility to financing and operating costs with risks of higher war-risk insurance, tighter funding conditions and hesitation in foreign direct investment. The longer the disruption the greater the chance of slower non-oil activity and elevated hedging costs as businesses plan around ongoing interruptions rather than one-off shocks, Azzam added.
US President Donald Trump indicated on the day of the strikes that the engagement could conclude quickly in two or three days or extend into a longer campaign while noting several off-ramps remained available, according to The National. Analysts cited by the publication said fiscal boosts from higher crude prices could benefit Saudi Arabia and Qatar yet trade, tourism and non-oil sectors across the Gulf would likely suffer. The National noted that the Gulf markets resumed trading just one day after the region plunged into major geopolitical turmoil leaving traders with limited time to digest rapidly unfolding events.
