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Mideast stock markets tumble as US tariffs and low oil prices squeeze energy-producing nations

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Emiratis are seen in the Dubai Financial Market in Dubai, United Arab Emirates, Monday, April 7, 2025. (AP)

 DUBAI, United Arab Emirates, April 7, (AP): 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 $64. 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 Middle Eastern 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.

The Dubai Financial Market exchange fell 6% after it opened for the week, though it clawed back some losses to close at 3% down. Market leader Emaar Properties, down at one point by 9%, closed down 2.5%.

The Abu Dhabi Securities Exchange fell as much as 4% before closing down 2.5%. Markets that opened Sunday saw losses as well.

Saudi Arabia’s Tadawul stock exchange fell over 6% in trading then, though it closed Monday up 1%. The giant of the exchange, Saudi Arabia’s state-owned oil company Aramco, fell over 5% on its own on Sunday, wiping away billions in market capitalization for the world’s sixth-most-valuable company. It closed up 1.5% Monday.

The drop in Aramco, whose shares also power Crown Prince Mohammed bin Salman’s expansive plans to reshape the kingdom’s economy, ties directly back to the overall price of oil.

Last week, OPEC+ members Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the UAE agreed to speed up the introduction of more oil into the market.

This month marks the first oil production increase by the group since 2022. “OPEC+ has shifted its market management strategy from a steady incremental increase in output to monthly announced targets, bringing forward higher output levels for May this year,” an analysis published Monday by the state-majority-owned Emirates NBD Bank of Dubai said.

“That will leave oil markets grasping with additional volatility as they assess the negative impact on global trade of the tariffs announced by the Trump administration.”

James Swanston, a Middle East and North Africa analyst at Capital Economics, warned Gulf countries likely face “a tough 2025.” “Against this backdrop, governments will almost certainly be forced to scale back fiscal support and, in the likes of Saudi Arabia, Bahrain and Oman, turn to outright austerity measures through spending cuts and potentially raising non-oil revenues via taxation,” Swanston wrote.

The Qatar Stock Exchange fell over 4% Sunday and slightly down as trading resumed Monday. Boursa Kuwait fell over 5% on Sunday, with slight losses again Monday. The Pakistan Stock Exchange fell rapidly Monday, with Islamabad facing 29% tariffs from the U.S.

The exchange suspended trading for an hour after a 5% drop in its main KSE-30 index, before closing down 3.3% overall. “We may face this situation until the uncertainty ends at the global market,” said Mohammed Sohail, the chief executive at Topline Securities.

Pakistan’s Finance Minister Muhammad Aurangzeb said over the weekend that Islamabad will send a delegation to the United States soon to negotiate. The U.S. imports around $5 billion worth of textiles and other products from Pakistan, which heavily relies on loans from the International Monetary Fund and others.   

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Jazeera Airways marks historic milestone with first flights to Syria

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KUWAIT CITY, July 2: Jazeera Airways, Kuwait’s leading low-cost carrier, today marked a historic milestone with the resumption of its direct flights between Kuwait and Damascus, restoring air connectivity between the two nations for the first time in over 13 years. The first two flights departed from Jazeera Terminal 5 this morning, with a full passenger load, some of whom were back to their home country after several years. For many of the over 200,000 Syrians living in Kuwait – the second-largest Arab community in the country – this moment represents more than just a flight; it is a long-overdue reconnection with their roots, loved ones, and memories. Jazeera Airways had previously operated services to Damascus, Aleppo, and Deir EzZoor.

The return to Damascus marks the beginning of renewed engagement with Syria, as the airline responds to strong and growing demand from the community. The route launches with one daily flight, with plans to increase to twice-daily frequencies by the end of the summer travel season. The airline is also exploring future expansions to other Syrian cities in line with market recovery.

Barathan Pasupathi, Chief Executive Officer of Jazeera Airways, stated:“This is more than just the reopening of a route – it is the restoration of a vital bridge for people. We are proud to re-establish this important connection for the Syrian community in Kuwait and beyond. Many of the passengers on our inaugural flight were returning to Syria for the first time in years, and the emotions witnessed at the departure gate were a powerful reminder of how meaningful this service is. We extend our sincere thanks to the authorities in both Kuwait and Syria for their invaluable support in making this relaunch possible.” With the launch of flights to Damascus, Jazeera Airways continues to play a vital role in enhancing regional connectivity and supporting the aspirations of communities across its growing network. To book flights, travellers can visit www.jazeeraairways.com or Jazeera’s mobile application.

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Kuwait Hosts GCC Energy Workshop

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Participants pose for a group photo during the Gulf Cooperation Council workshop.

KUWAIT CITY, July 2: A high-level Gulf Cooperation Council (GCC) workshop on protecting the infrastructure of the oil and gas sector and crisis management kicked off Tuesday, at the Ahmad Al-Jaber Oil and Gas Exhibition in Ahmadi, Kuwait. The three-day event is jointly organized by the United Nations Office of Counterterrorism, Kuwait Oil Company (KOC), and the GCC Emergency Management Center. During the workshop, GCC Secretary General Jassem Al-Budaiwi said in a recorded speech that GCC energy supplies represent a fundamental pillar of global supply, concurrently noting that the Gulf states are working to implement ambitious development plans, which in turn would lead to an increase in local energy demand. The GCC chief said that the developing world is witnessing rapid progress and a growing demand for energy, noting that the Asia-Pacific region is expected to account for 50 percent of the global GDP by 2040, making it one of the fastest-growing regions in the world. GCC faces three main challenges; adapting to the global energy transition, meeting increasing domestic demand, and ensuring the security and stability of the global energy market, he pointed out.

The security and safety of energy assets in the Gulf region are fundamental to the global market, as ongoing developments and conflicts in the region indicated that any future events in the Middle East could directly impact three out of the world’s seven strategic maritime chokepoints: the Strait of Hormuz, the Bab al-Mandab Strait, and the Suez Canal, Al-Budaiwi stressed. The current conflicts not only threaten global supply chains, Al-Budaiwi emphasized, but also affect national and cross-border development projects such as connectivity initiatives between the European Union and the Middle East, which rely on safe passage through the Levant and the Mediterranean Sea. In a similar recorded statement, United Nations Undersecretary General for Counter-Terrorism Vladimir Voronkov emphasized that the meeting takes place amid a period of escalating global security threats. He highlighted that UN General Assembly Resolution 77/298 unequivocally condemns terrorist attacks targeting energy infrastructure and underscores the need for strengthened cooperation among governments, international organizations, and the private sector.

Voronkov further noted that the Security Council has introduced a technical guide for the protection of critical energy infrastructure from terrorist threats, developed with the support of the Russia and Turkmenistan. He underscored that the guide is the product of in-depth research, broad international consultations, and the collective expertise of the United Nations Global Counter-Terrorism Coordination Compact, in collaboration with the Working Group on Emerging Threats and Infrastructure Protection.

In her remarks at the workshop, UN Resident Coordinator in Kuwait Ghada Al-Tahir emphasized that this meeting offers a key opportunity to promote best practices, share expertise, and highlight the Gulf countries’ progress in building comprehensive security frameworks regionally and nationally. Al-Tahir highlighted that, for decades, the Gulf states have served as a cornerstone of global energy security and sustainable development, being home to vast reserves of oil and natural gas and playing a vital role in ensuring stable energy supplies worldwide. She reaffirmed the UN’s role, especially the Kuwait office, in supporting shared security goals, expressing confidence that the meeting would yield practical, impactful results.

Dr. Rashid Al-Marri, Head of the GCC Emergency Management Center, emphasized that the meeting offers a vital platform to boost cooperation to protect oil and gas infrastructure; key pillars of Gulf economies and global energy stability. He highlighted the need for greater readiness amid growing threats, including terrorism, cyberattacks, and geopolitical tensions. He noted the center’s role in coordinating crisis response among member states, developing a regional emergency plan covering 13 types of risks, and working closely with the UN Office of Counterterrorism on training and capacity-building. On his part, KOC’s Assistant CEO, Musaed Al-Rasheed, stressed the importance of strengthening regional and international partnerships to secure maritime routes and energy supplies, especially as the industry faces complex geopolitical, industrial, and natural threats.(KUNA)

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Mexican banks face cascading consequences following US sanctions

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Mexican banks face cascading consequences following US sanctions

The US Treasury Department building is seen on March 13, 2025, in Washington. (AP)

MEXICO CITY, July 2, (AP): Three Mexican financial institutions sanctioned by the Trump administration last week have felt a cascade of economic consequences following the allegations that they helped launder millions of dollars for drug cartels. The US Treasury Department announced that it was blocking transactions between US banks and Mexican branches of CIBanco and Intercam Banco, as well as the brokering firm Vector Casa de Bolsa.

All three have fiercely rejected the claims. Mexico’s President Claudia Sheinbaum accused US officials of providing no evidence to back their allegations, though the sanctions announcement made specific accusations on how money was transferred through the companies. It detailed how “mules” moved money through accounts in the US, as well as transactions carried out with Chinese companies that US officials said provided materials to produce fentanyl.

Mexico’s banking authority has announced that it is temporarily taking over management of CIBanco and Intercam Banco to protect creditors. Sheinbaum said Tuesday that the Mexican government is doing everything within its power to ensure that creditors aren’t affected, and said they were well “within their right” to pull their money from the banks.

The US Treasury Department said that the sanctions would go into effect 21 days after the announcement. Fitch Ratings has downgraded the three institutions and other affiliates, citing “anti-money laundering concerns” and saying the drop “reflects the imminent negative impact” that the sanctions could have.

“The new ratings reflect the significantly more vulnerable credit profile of these entities in response to the aforementioned warnings, given the potential impact on their ability to meet their financial obligations,” the credit rating agency wrote in a statement. On Monday, CIBanco announced that Visa Inc. had announced to them with little warning that it had “unilaterally decided to disconnect its platform for all international transactions” through CIBanco.

The bank accused Visa of not complying with the 21-day grace period laid out by the sanctions. “We would like to reiterate that your funds are safe and can be reimbursed through our branch network,” the bank wrote. “We reiterate to our customers that this was a decision beyond CIBanco’s control.”  

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