The U.S. Navy, however, maintained its blockade of Iran's ports and coastline, a move Tehran has described as an act of war. Shipping through the Strait of Hormuz, which normally handles around 20% of global oil and liquefied natural gas supplies, remained largely at a standstill.
At least three container ships were hit by gunfire in the Strait of Hormuz on Wednesday, maritime security sources and the United Kingdom Maritime Trade Operations (UKMTO) said.
Dubai's main share index fell 1.1%, with most stocks ending in negative territory. Blue-chip developer Emaar Properties declined 2.2%, while Emirates NBD, Dubai's largest lender, dropped 1.8%.
In Abu Dhabi, the index lost 0.8%, weighed down by broad-based declines led by real estate stocks. First Abu Dhabi Bank, the UAE's largest lender, fell 2.6%, conglomerate Alpha Dhabi retreated 1.4%, and Aldar Properties slid 1.8%. On Tuesday, Aldar said it had acquired, together with Mubadala, "The Link" at Masdar City for 654 million dirhams($178.06 million).
Saudi Arabia's benchmark index extended losses for a fifth straight session, falling 0.9%, with almost all constituents in the red. Al Rajhi Bank lost 2%, while ACWA Power dropped 2.2%.
Oil giant Saudi Aramco , however, bucked the trend to rise 0.4%. Oil prices climbed after reports of attacks in Hormuz, with Brent crude futures up 1.2% at $99.56 a barrel. The Qatari index edged down 0.1%, as Qatar National Bank, the region's largest lender, fell 1.5% and Qatar Navigation lost 1.2%.
Qatar Gas Transport rose 1.1% after reporting higher first-quarter net profit. "Stock markets were under some pressure as investors consider the uncertain geopolitical outlook after diplomatic progress stalled in the region," said Milad Azar, market analyst at XTB MENA.
"While current conditions could continue to weigh on sentiment, the earnings season could help alleviate the pressure.
Strong earnings could help stabilize the market, in addition to the solid local fundamentals," he added.
Outside the Gulf, Egypt’s blue-chip index was little changed as Commercial International Bank fell 2%, while Eastern Company gained 2.8%.
