Major Gulf markets decline as regional conflict escalates
Major stock markets in the Gulf fell in early trade on Thursday amid investor jitters over potential US involvement in the escalating Israel-Iran conflict.
Israel struck a key Iranian nuclear site on Thursday and Iranian missiles hit an Israeli hospital while President Donald Trump kept the world guessing about whether the US would join air strikes seeking to destroy Tehran's nuclear facilities.
Saudi Arabia's benchmark index dropped 0.2%, dragged down by a 0.4% fall in Al Rajhi Bank and a 0.6% decrease in oil behemoth Saudi Aramco. The Saudi index is on course for its biggest weekly fall in over two months.
However, Prince Alwaleed Bin Talal-backed airline Flynas advanced 3% to 79.60 riyals per share, a day after falling over 3% on its debut.
The airline, which sold a 30% stake to investors in the first IPO by a Gulf airline in almost 20 years, was priced at the top of its range at 80 riyals per share.
Dubai's main share index declined 1.3%, dragged down by a 2.4% slide in blue-chip developer Emaar Properties and a 2% retreat in sharia-compliant lender Dubai Islamic Bank.
Most Gulf markets in red as Israel-Iran conflict escalates
Elsewhere, budget airliner Air Arabia was down 1.6%. In Abu Dhabi, the index eased 0.1%.
Overnight, the Federal Reserve held rates steady as expected but retained projections for two quarter-point rate cuts this year.
The Fed's decisions impact monetary policy in the Gulf, where most currencies, including the riyals, are pegged to the US dollar.
The Qatari benchmark fell 0.8%, with Qatar Islamic Bank losing 1.6%.
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Business Recorder
31 minutes ago
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Potential fallout of Israel-Iran conflict: ICMAP for ensuring 90-day strategic oil reserves
KARACHI: To address the challenges arising from escalating regional tensions, the Institute of Cost and Management Accountants of Pakistan (ICMAP) has proposed a set of strategic policy recommendations. These include the establishment of 90-day strategic oil reserves, formation of an economic task force, and adoption of oil price hedging mechanisms to help shield Pakistan from the potential fallout of the Israel-Iran conflict. In response to escalating regional tensions, the ICMAP has issued a timely and policy-focused assessment of the potential economic fallout from the ongoing Israel-Iran conflict. Developed by ICMAP's Research and Publications Department, the report complements the government's recent decision to establish a high-level committee, headed by the Finance Minister, to evaluate emerging economic risks. ICMAP's assessment underscores that while the conflict remains geographically limited, its indirect economic consequences are already rippling across global markets, particularly affecting energy, trade, and financial systems. For Pakistan, the exposure is significant due to its dependence on imported fuel, critical maritime trade routes through the Gulf, and the livelihoods of over four million expatriate workers based in the Middle East. Central to the analysis is a warning that any disruption in the Strait of Hormuz, through which nearly 20% of global oil and LNG transit, could drive oil prices to between $100 and $130 per barrel. This would substantially increase Pakistan's energy import bill, elevate power generation costs, and accelerate inflation. Domestic diesel prices could rise by more than 30%, with wide-ranging effects on food production, transportation, and household expenditures. The report further highlights rising risks to financial stability. Depreciation of the Pakistani Rupee, increased external debt servicing costs, and fiscal pressure from potential fuel subsidies could erode macroeconomic resilience. Exporters are already facing sharp increases in shipping insurance premiums, reportedly climbing from $400 to $2,000 per container, thereby undermining export competitiveness. In addition, supply chain disruptions and elevated freight charges are expected to impact industrial production - particularly in key sectors such as textiles, chemicals, and edible oils. To address these challenges, ICMAP has outlined a set of strategic policy recommendations. At the forefront is the proposal to establish a Strategic Economic Task Force comprising the Ministry of Finance, Ministry of Commerce, Ministry of Energy (Petroleum Division), Ministry of Foreign Affairs, Ministry of Planning, Development and Special Initiatives, Ministry of Defence, and the State Bank of Pakistan. This high-level task force would be responsible for monitoring global developments and coordinating timely, cross-institutional policy responses to safeguard Pakistan's economic stability. The Institute also recommends expanding Pakistan's strategic petroleum reserves from the current 21 days to at least 90 days of national demand. This critical buffer could be financed through sovereign Sukuk, modelled after successful international practices, to enhance energy security and reduce vulnerability to global supply shocks. Additional recommendations include the adoption of Shariah-compliant oil price hedging instruments for up to 30% of imports to manage exposure to international price volatility. ICMAP also advocates diversifying oil procurement by pursuing local currency trade agreements with countries such as Russia, Iran, and China. Accelerating the modernization of local oil refineries is also advised, which could reduce reliance on imported refined fuels and potentially save up to $1 billion annually. ICMAP further recommends for reversing recent taxes on solar panel imports and fast-tracking the implementation of the 10,000 MW Solar Initiative to promote clean energy and enhance long-term energy resilience. On the external front, it emphasizes the need to safeguard overseas remittances by engaging Gulf countries, incentivizing formal remittance channels, and supporting returning workers to sustain household incomes and foreign exchange inflows. ICMAP further suggests applying for financing under the IMF's Resilience and Sustainability Trust (RST) and establishing an Energy Shock Stabilization Fund in collaboration with multilateral development partners to strengthen fiscal buffers. Copyright Business Recorder, 2025
Business Recorder
31 minutes ago
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Your scent lingers on
June 21 marks the birth anniversary of Shaheed Mohtarma Benazir Bhutto (Shaheed Bibi). She was born on June 21, 1953, in Karachi. On that day, her father, Shaheed Zulfikar Ali Bhutto, her mother, Begum Nusrat Bhutto, and the entire Bhutto family celebrated the immense joy that her birth brought them. Shaheed Bhutto described this moment in detail in a letter he wrote to Shaheed Bibi on her 25th birthday, June 21, 1978, while on death row in Rawalpindi Jail. This letter was later published in book form under the title My Most Beloved Daughter. In this letter, Shaheed Bhutto wrote that Shaheed Bibi was a deeply compassionate and sensitive child, so much so that she once cried the whole day and refused to eat after a pigeon died. To this same daughter, on her birthday, he gifted her 'the hand of the people,' saying he had nothing else to give from his death cell. This remarkably kind-hearted Shaheed Bibi went on to confront some of the most ruthless and heartless colonial forces in the world to uphold that gift. She ultimately sacrificed her life for Pakistan and its people at the age of just 54. Shaheed Bibi once wrote that during her final meeting with her father, a day before his execution, she promised him that she would carry forward his mission. After making this solemn vow to Shaheed Baba, she dedicated the next 30 years of her life to fulfilling it, enduring immense hardships and suffering until her martyrdom. What was Shaheed Bhutto's mission? Shaheed Bibi carried it forward as a well-defined programme. His mission was to empower the people by giving them the right to make all decisions through democracy and to make the defence of the state of Pakistan impregnable. Shaheed Bhutto firmly believed that no democratic or political system can thrive in a militarily weak state. This was the essence of Shaheed Bhutto's philosophy. In light of recent Indian aggression against Pakistan and Israeli aggression against Iran, the importance of this philosophy is becoming increasingly clear. Democracy and the struggle for a strong, stable state must go hand in hand. The way Shaheed Mohtarma Benazir Bhutto advanced this mission is truly unparalleled. The era of Shaheed Mohtarma Benazir Bhutto was marked by immense challenges, not only for the democratic forces of Pakistan but also for the security and sovereignty of the nation. Shaheed Bibi not only revived democracy by leading a peaceful yet determined struggle against two military dictators, but she also took extraordinary steps to strengthen Pakistan's defence. Today, on her birth anniversary, it is the most fitting moment to acknowledge and honour the exceptional contributions Shaheed Bibi made toward making Pakistan's defence impregnable. It is widely recognised that Shaheed Zulfikar Ali Bhutto was the political architect of Pakistan's nuclear programme, while Shaheed Mohtarma Benazir Bhutto played the key role as the political architect of Pakistan's modern missile programme. She not only safeguarded her father's nuclear legacy but actively advanced it. In 1974, when India conducted its first nuclear test, Shaheed Zulfikar Ali Bhutto finalised Pakistan's nuclear programme. Similarly, in 1988, after India tested its Prithvi missile, Shaheed Mohtarma Benazir Bhutto took decisive steps to make Pakistan's nuclear deterrent operational and viable. Just as Shaheed Bhutto used his diplomatic channels to acquire nuclear technology from France and other countries, Shaheed Bibi skilfully engaged with North Korea and China to obtain missile technology. In 1989, as Prime Minister, she established the Missile Technology Board, obtained blueprints from North Korea, and signed multiple defence agreements. It was during her tenure that Pakistan's Hatf missile programme was launched and tested successfully. Moreover, the defence agreements that she signed with China gave Pakistan a strategic edge over India in military technology, an advantage that endures to this day. When India exhibited aggression, Pakistan, under her guidance and legacy, responded in kind, leaving a mark India would not forget. The most meaningful way to pay tribute to Shaheed Mohtarma Benazir Bhutto on her birth anniversary is to recognise and salute her unparalleled efforts in fortifying the defence of Pakistan. The Pakistan People's Party is the only political party in the country whose leadership has sacrificed their lives not only for the cause of democracy but also for the security and sovereignty of the state of Pakistan. During her exile, in a conversation with journalists in Washington in March 2005, Shaheed Mohtarma Benazir Bhutto said: 'My father laid the foundation of Pakistan's nuclear programme. I brought missile technology from North Korea. I signed defence agreements with China. I am told that I am the only one who can secure modern weapons for Pakistan from other countries, I am the one who can bring F-16s from the United States and Mirage jets from France. But what have they done to us? The whole world knows. Still, despite all the hardships, we will not give up our struggle to restore democracy in Pakistan, nor will we abandon our mission to strengthen its security and defence. We live and die for Pakistan and its people. Even in exile, I am doing more for Pakistan through diplomacy than those in power.' These words reflect not only her unwavering dedication to democratic ideals but also her tireless efforts to ensure Pakistan's strategic strength, even when far from home, under pressure, and in exile. Shaheed Bibi clearly advanced the mission of her Shaheed Baba through her actions. This mission encompassed both the democratic rights of the people of Pakistan and the security of the state. Today, that same mission is being carried forward by Shaheed Bibi's son and Pakistan People's Party Chairman, Bilawal Bhutto Zardari. Just as he continues to raise the flags of Pakistan's victories on the diplomatic front, he is upholding the core agenda of the mission begun by Shaheed Bhutto and Shaheed Bibi. Today, on the 72nd anniversary of Shaheed Bibi, we deeply miss her presence. As Ghalib beautifully expressed, 'Aisa kahan se laaun ke tujhsa kahin jise' (Where could I find someone like you, whom I could call like you?) Shaheed Bibi used to say that a person can be imprisoned or exiled, but an ideology cannot be. We continue to uphold this belief — that a person may be imprisoned, exiled, or even killed, but an ideology will always survive. The ideology of reconciliation that Shaheed Bibi championed for Pakistan and its people, as an alternative to revenge, will forever endure. As the poet says… (Tere baad bhi guzray hain kuch log Magar teri khushboo nagayi rehguzar se) Even after you, some people did pass by, But your fragrance never left the path. Copyright Business Recorder, 2025
Business Recorder
31 minutes ago
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Qatar holds talks with energy companies
DOHA/LONDON: Qatar held crisis talks this week with energy majors after Israeli strikes on Iran's huge gas field, which it shares with Qatar, an industry source and a diplomat in the region told Reuters. Saad Al Kaabi, CEO of state-owned QatarEnergy and the Gulf Arab state's energy minister, urged companies to warn the US, Britain and European governments about the risks the conflict poses to gas exports from Qatar and the increasing threat to the global gas supply, they said. An interruption to Qatar's liquefied natural gas (LNG) operation could cut off around 20% of the global supply, which Doha exports from the world's largest gas reservoir. 'QatarEnergy is making sure that foreign governments are fully aware of the implications and repercussions the situation and further escalation pose to gas production from Qatar,' said the diplomat, who spoke on condition of anonymity because of the sensitivity of the situation. QatarEnergy did not immediately respond to a request for comment. Kaabi also met this week in Doha with ambassadors representing countries whose companies are involved in QatarEnergy's North Field expansion project, the diplomat said. US majors ExxonMobil and ConocoPhillips, Britain's Shell, Italy's Eni and France's TotalEnergies all have stakes in the expansion, which is set to boost exports from Qatar by around 82% in the coming years. Qatar currently produces 77 million tonnes of liquefied gas a year. So far, there have been no disruptions to QatarEnergy's exports, and cargo deliveries are on schedule. Israel began attacking Iran last Friday, saying its longtime enemy was on the verge of developing nuclear weapons. Iran, which says its nuclear programme is only for peaceful purposes, retaliated with missile and drone strikes on Israel.
