Gulf stock markets have diverged sharply since the Iran war began, and the region is now home to both the best-performing global bourse over the past month — and the worst.
Dubai’s main stock index, which notched double-digit gains last year amid a continuing post-pandemic influx of capital, residents and tourists, is the world’s worst performer so far in March. Meanwhile, Oman’s benchmark surged to the top of global rankings, buoyed by firmer oil prices and what has so far been its relative insulation from the worst of the strikes.
While some Omani energy sites have been attacked, the country has been struck less often than the United Arab Emirates, Qatar and Kuwait. It’s also benefiting from increased traffic at its ports on the Gulf of Oman coast as Iran brings shipping traffic through the Strait of Hormuz to a near standstill.
The UAE has borne the brunt of Iran’s retaliation on Gulf countries following the US-Israeli offensive that began on Feb. 28, with strikes hitting airports and residential areas, though much of the country remains operational. The Dubai Financial Market is down about 16% in March, led by declines in property developers and airline stocks such as Air Arabia PJSC amid widespread travel disruptions.
In contrast, Muscat’s benchmark is up about 10% this month and roughly 38% year-to-date, extending a rally that began in mid-2025 on hopes that the tiny bourse will get upgraded to emerging market status. So far, the war has barely registered, and gains are broad-based among shipping, energy and banking stocks.
The S&P 500 sank to an August low at the end of last week and is down about 7% in March, while Brent crude is on track for a record monthly gain and is trading around $115 a barrel.
“Oman remains relatively insulated from the conflict, particularly compared to other regional hotspots including the UAE, Qatar and Bahrain,” said Tahir Abbas, head of research at Ubhar Capital in Muscat. “While there have been limited disruptions, investors appear to view Oman’s energy infrastructure relatively secure, with no material impact on core oil export capacity or domestic economic activity so far.”
Saudi Arabia’s Tadawul All Share Index has also rebounded after ranking among last year’s weakest emerging markets, and now stands as the world’s sixth-best performing bourse this month. Gains have been driven by higher crude prices lifting heavyweights such as Saudi Aramco, alongside a lower perceived security risk than in the UAE. Domestic investors have also stepped in since the conflict began, reversing earlier outflows into US equities. The index is up about 4% this month.
Even primary markets are showing pockets of resilience. Although IPO volumes have collapsed across the Gulf this quarter — a slowdown that began before the war — the region’s only two listings so far this year have posted solid gains despite their modest size.
Kuwait’s Trolley General Trading Co. is up about 23% since its $166 million debut last week, while Saudi Arabia’s Saleh Abdulaziz Al Rashed & Sons Co. has climbed roughly 48% following its $67 million listing earlier this month. Several firms within Saudi Arabia are pressing ahead with share sale plans despite the war.
But these two strong debuts are not sufficient to signal a full reopening of the IPO window, but instead show selective demand for “well-priced, growth oriented opportunities,” Abbas said.
“Going forward, IPOs are likely to be increasingly fundamentals-driven, with greater emphasis on earnings visibility, balance sheet strength, and valuations,” Abbas said.
