DUBAI: 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 $63.
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 Mideast 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.