DUBAI, United Arab Emirates (AP) — Middle East stock markets tumbled Monday as they struggled with the dual hit of the United States’ new tariff policy and a sharp decline in oil prices, squeezing energy-producing nations that rely on those sales to power their economies and government spending.
Benchmark Brent crude is down by nearly 15% over the last five days of trading, with a barrel of oil costing just over $64. That’s down nearly 30% from a year ago when a barrel cost over $90. That cost per barrel is far lower than the estimated break-even price for Saudi Arabia and most other countries producing energy in the Middle East. That’s coupled with the new tariffs, which saw the Gulf Cooperation Council states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates hit with 10% tariffs. Other Middle Eastern nations face higher tariffs, like Iraq at 39% and Syria at 41%.
“With these measures and the expected retaliatory measures that could be adopted by other countries, the stability and predictability of international trade could be undermined,” the accounting firm PwC said in an advisory to its Mideast clients.
Losses Sweep Region
The Dubai Financial Market exchange fell 6% after it opened for the week, though it clawed back some losses to close at 3% down. Market leader Emaar Properties, down at one point by 9%, closed down 2.5%. The Abu Dhabi Securities Exchange fell as much as 4% before closing down 2.5%. Markets that opened Sunday saw losses as well. Saudi Arabia’s Tadawul stock exchange fell over 6% in trading then, though it closed Monday up 1%. The giant of the exchange, Saudi Arabia’s state-owned oil company Aramco, fell over 5% on Sunday, wiping away billions in market capitalization for the world’s sixth-most-valuable company. It closed up 1.5% Monday.
The drop in Aramco, whose shares also power Crown Prince Mohammed bin Salman’s expansive plans to reshape the kingdom’s economy, ties directly back to the overall price of oil. Last week, OPEC+ members Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia, and the UAE agreed to speed up the introduction of more oil into the market. This month marks the first oil production increase by the group since 2022.
“OPEC+ has shifted its market management strategy from a steady incremental increase in output to monthly announced targets, bringing forward higher output levels for May this year,” an analysis published Monday by the state-majority-owned Emirates NBD Bank of Dubai said. “That will leave oil markets grasping with additional volatility as they assess the negative impact on global trade of the tariffs announced by the Trump administration.”
James Swanston, a Middle East and North Africa analyst at Capital Economics, warned Gulf countries likely face “a tough 2025.” “Against this backdrop, governments will almost certainly be forced to scale back fiscal support and, in the likes of Saudi Arabia, Bahrain, and Oman, turn to outright austerity measures through spending cuts and potentially raising non-oil revenues via taxation,” Swanston wrote.
The Qatar Stock Exchange fell over 4% Sunday and slightly down as trading resumed Monday. Boursa Kuwait fell over 5% on Sunday, with slight losses again Monday.
Pakistan Also Struggles
The Pakistan Stock Exchange fell rapidly Monday, with Islamabad facing 29% tariffs from the U.S. The exchange suspended trading for an hour after a 5% drop in its main KSE-30 index, before closing down 3.3% overall. “We may face this situation until the uncertainty ends at the global market,” said Mohammed Sohail, the chief executive at Topline Securities. Pakistan’s Finance Minister Muhammad Aurangzeb said over the weekend that Islamabad will send a delegation to the United States soon to negotiate. The U.S. imports around $5 billion worth of textiles and other products from Pakistan, which heavily relies on loans from the International Monetary Fund and others.
President Donald Trump is threatening new 50% tariffs on China unless Beijing lifts its retaliatory duties on U.S. exports by tomorrow. The White House says any suggestion that Trump is considering a 90-day pause in tariffs is "fake news." U.S. markets opened sharply lower Monday for a third trading session, as Trump’s tariffs paralyze global trade and investment.
Asian markets plunged overnight, with stock indexes in Singapore, Australia, Japan, South Korea, and India all suffering losses. European Commission President Ursula von der Leyen said the EU is willing to negotiate with the U.S. on tariffs but also said the bloc will prepare to retaliate. Billionaire Trump backer Bill Ackman says America is on the brink of an "economic nuclear winter" due to tariffs.
Central Ohio Companies Feeling the Pinch
As U.S. stocks, including those based in central Ohio, struggled Monday after President Donald Trump and those in his administration doubled down on his aggressive tariff plan, local companies saw significant stock price hits. The blue-chip Dow, the broad S&P 500, and the tech-heavy Nasdaq were mixed in early trading after a steep fall at the opening bell. Stocks fell sharply last week on worries Trump has ignited a trade war that will lead to higher prices and recession. Trump announced on April 2 a 10% tariff on all countries that went into effect over the weekend.
Even higher tariffs on dozens of nations are set to start this Wednesday. China hit back last week, matching a 34% U.S. tariff with its own on all U.S. imports, while other countries around the world denounced Trump’s moves and threatened their own retaliatory tariffs. European leaders met in Luxembourg on Monday to discuss the European Union’s response to Trump’s latest tariffs.
Last week, the Dow posted back-to-back losses of more than 1,500 points for the first time ever, including a 2,231-point freefall on Friday. The S&P 500 on Friday posted its biggest one-day loss since March 2020, and Monday morning tumbled into a bear market. For central Ohio companies, many saw major stock price hits from the time Trump announced his tariffs after markets closed on Wednesday to the end of business on Friday.
Most local stock prices saw prices bounce by mid-Monday after a drop in value at the start of the day. For example, Abercrombie stock prices have fallen roughly 12% since Wednesday afternoon - but the price at close on Friday was roughly the same as of late morning Monday.
As the stock market continues to react to these tariffs, analysts predict further volatility and uncertainty ahead, raising concerns about the long-term impact on both regional and global economies.
