Gulf Markets Slip as Hormuz Deal Talks Face Iranian Demands

Regional equities across the Gulf traded in narrow ranges on Monday, reflecting elevated investor anxiety over fragile negotiations to reopen the vital Strait of Hormuz. Market sentiment was caught between reports of progress toward an agreement and new security tensions in the Arabian Peninsula, according to market data reported by Business Recorder.

A United States official indicated that discussions brokered between Iran and Oman were moving toward a resolution to reopen the key waterway, which handled roughly a fifth of global liquefied natural gas and crude supplies prior to an Iranian blockade triggered by U.S.-Israeli strikes. However, negotiations have grown complicated as Tehran insists on diplomatic concessions from Washington, including financial reparations for damages sustained during recent military engagements on Iranian soil.

Adding to security concerns across regional financial markets, Iran-aligned Houthi militants claimed responsibility for a Sunday drone and missile strike targeting Saudi Aramco's refinery complex in Jazan. The incident occurred just two days after Saudi Arabia concluded a tripartite defence agreement with Turkey and Pakistan to bolster regional stability.

Equity indices reflected the prevailing geopolitical caution. Saudi Arabia's benchmark index slipped 0.1%, weighed down by a 0.4% drop in Al Rajhi Bank. Maharah Human Resources Co witnessed a sharp 8.4% sell-off following a significant contraction in its second-quarter earnings, whereas Saudi Aramco managed a modest gain of 0.3%.

In the United Arab Emirates, Dubai's main financial index retreated 0.2%, dragged lower by a 1.2% decline in real estate heavyweight Emaar Properties. International energy benchmarks remained largely static, with Brent crude futures ticking down by a single cent to $83.54 per barrel at 0643 GMT.