Mideast Stocks: Most Gulf markets gain as oil-supply worries ease, Fed hike bets recede

Major equity indices across the Middle East climbed higher as improving regional energy shipments and retreating expectations of an immediate United States monetary policy tightening bolstered investor confidence.

According to market reports detailed by Zawya, regional bourses advanced following data showing that collective petroleum flows from the Persian Gulf — excluding Iran — recovered significantly. Energy and commodities tracking highlighted by Egyptoil Gas and Наша Ніва indicated that combined crude, condensate, and refined product exports from Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, and the United Arab Emirates averaged high volumes during the month, rebounding from earlier disruptions tied to infrastructure attacks and regional shipping strikes.

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The rebound was spearheaded by Saudi Arabia. Data cited via The Economic Times noted that Saudi crude and condensate shipments rose substantially month-on-month, compensating for ongoing shortfalls elsewhere in the region. However, analysts pointed out a divergence between raw crude and refined products. While crude and condensate flows achieved a substantial recovery percentage compared to pre-war baselines, refined fuel exports, including liquefied petroleum gas, lagged behind, contributing to tight diesel and jet fuel markets globally.

At the same time, geopolitical friction in the Gulf persisted. According to updates from Oilprice, a strict United States maritime blockade in the Gulf of Oman has left at least 50 Iranian oil tankers stranded within Persian Gulf waters near Iran’s coastline. Vessel-tracking estimates compiled via Bloomberg indicated that Iranian crude loadings fell to zero during the month for the first time since the war began.

Security risks around critical maritime choke points also kept energy markets on edge. As reported by News and УНН, Brent crude futures rose to trade near the hundred-dollar threshold, while US West Texas Intermediate advanced as well. Priyanka Sachdeva, head of market insights at Phillip Nova, noted via News.az that alternative routing allowed producers to keep barrels moving, yet warned calling this a full normalisation of supply doesn't justify quite yet in light of renewed tanker attacks near the Strait of Hormuz.

Adding to global supply adjustments, G7 nations agreed to release strategic reserves of crude and diesel, while also pledging restraint regarding export restrictions following diplomatic engagement, as noted by УНН and Minute Mirror. Meanwhile, OPEC+ officials meeting online decided to keep production targets unchanged, as export bottlenecks continue to constrain actual output across participating member states.

Regional financial markets reacted favorably to both the recovery in physical oil flows and shifting macroeconomic expectations. Because most Gulf currencies maintain formal exchange rate pegs to the greenback, domestic monetary conditions closely shadow decisions made by the United States Federal Reserve. As analyzed by Finimize, softer-than-expected US employment data and downward payroll revisions caused traders to scale back immediate expectations for an October interest rate increase.

Benchmark indices responded with measured advances. Saudi Arabia's primary equity index led regional gains, supported by upward moves in major financial institutions like Al Rajhi Bank and heavyweight energy corporation Saudi Aramco. Subsidiary markets in Qatar and Dubai also posted modest gains, while Abu Dhabi experienced a slight downward drift, bucking the broader regional trend as detailed in primary market reports.

What to Watch Next

• Upcoming macroeconomic releases regarding inflation and employment from Washington, which will dictate Federal Reserve policy trajectories ahead of the December policy meeting.
• Ongoing maritime updates concerning the status of stranded Iranian tonnage and enforcement of the US naval blockade in regional waters.
• Developments in Yemen involving Saudi-backed forces and Bab el-Mandeb coastal security, alongside future OPEC+ production adjustments.