Middle East stock markets drop sharply as tariffs and oil prices fall

In early April 2025, Middle East stock markets experienced significant declines due to a combination of newly imposed U.S. tariffs and a sharp decrease in oil prices. The Dubai Financial Market saw a 6% drop on Monday when trading resumed, coinciding with a dire situation where energy-producing nations struggled with lower sales that inhibited their economies. Major firms within these markets, like Emaar Properties and Saudi Aramco, reported steep declines of 9% and over 5%, respectively, wiping out billions in market capitalization. Tariff impacts were particularly severe for Gulf Cooperation Council states such as Saudi Arabia, which faced a 10% tariff, while countries like Iraq dealt with even higher tariffs of 39%. This fall in stock valuations was not isolated, as several other Mideast exchanges followed suit. The situation was further aggravated by a rising oil production increase from OPEC+, which sought to shift their market management strategy to monthly production targets instead of steady increases. Consequently, the anticipated increase in production was expected to multiply existing volatility in oil markets. The impact of these economic pressures posed a risk to the stability of international trade as experts warned of possible retaliatory measures from affected nations. Additionally, the ongoing decline of the Pakistan Stock Exchange was noted, which suspended trading after hitting a 5% drop in its main index due to similar tariff pressures from the U.S. Together, these events highlighted the severe implications for Mideast economies, as they grappled with overcoming both external and internal pressures on trade and oil markets.