Gulf Markets Slip on Reports of Potential US Military Action Against Iran

Gulf stock markets declined sharply on Thursday following reports that the United States is considering direct military action against Iran, triggering risk-off sentiment across equity bourses from Riyadh to Dubai and Abu Dhabi.

The selloff reflects investor anxiety over the potential for a significant escalation in the Iran-US confrontation, which has already disrupted regional trade routes and pushed energy prices higher. Gulf economies, despite their oil revenue windfall, are acutely sensitive to security deterioration in their immediate neighbourhood.

Trading volumes picked up on the downside as institutional investors moved to reduce exposure to regional equities, while safe-haven assets including gold extended their gains. Oil prices remained elevated but volatile, with markets uncertain whether a direct military strike could trigger broader supply disruption.

Analysts note that Gulf markets have been attempting to price in an extended period of regional instability, but the prospect of direct US military engagement represents a qualitative escalation beyond what current valuations had discounted.