GCC affirms right to respond as war enters day three

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WHAT WE’RE TRACKING TODAY

Opec+ resumes production hikes

Good morning, all. It is day three of the quickly escalating regional war and the whole world is on high alert as the impact of what’s happening regionally echoes globally.

At home: We’re watching how global markets react during the first day of trading since the escalations began, how oil markets open, and what the closure of the Strait of Hormuz means for global energy supplies.

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Opec+ tried to calm oil markets before they open today, agreeing to resume production increases next month with a modestly larger 206k bbl / d jump after pausing hikes in 1Q. Whether this proves symbolic or substantive will hinge on how the crisis evolves, and whether spare barrels successfully hit the water, which could prove difficult if the Hormuz Strait remains closed (more on that in today’s War Watch, below).

Flirting with triple-digits: Pundits are expecting a USD 5-10 / bbl increase in Brent crude price when markets open, with some saying it could reach USD 100 — a level unseen since Russia launched its offensive on Ukraine in 2022.

A supply flex (with limits): The Kingdom, alongside Iraq, Kuwait, and the UAE, had already begun boosting exports from last month to multi-year highs, in anticipation of the attacks. The group’s spare capacity sits largely with Saudi Arabia and the UAE, totaling some 2.5 mn bbl / d.

WEATHER- Foggy and dusty weather is expected for parts of the Eastern Region, Aseer, and Makkah, while the rest of the Kingdom is set for clear skies.

Riyadh: 23°C high / 13°C low;

Jeddah: 28°C high / 19°C low;
Makkah: 28°C high / 18°C low;
Dammam: 26°C high / 15°C low.

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The big story abroad

The global front pages are all about the regional war and its impact on markets this morning. Between soaring oil prices and a strengthening USD, markets, currencies, and commodities are seeing massive fluctuations as investors look for safety amid all the uncertainty.

Worth reading: The Financial Times is out with a piece looking at what this all means for the global economy, while the Wall Street Journal dives into what a post-Khamenei Iran could look like.

From stocks to oil and logistics, we dive into what this all means for us at home in the news well, below.

TASI dips as war edges on

Tadawul’s benchmark index TASI slid 2.18% to close at 10.48k points yesterday, recovering from a low of 10.19k during the day as investors actively priced in geopolitical risks. All sectors closed in the red, except for energy and F&B.

Elsewhere in the region: Egypt’s EGX 30 fell 2.5% to 47.98k yesterday, after dropping as much as 5.6% at the open. Markets in the UAE will extend their weekend by two days, while Kuwait suspended trading amid heightened volatility. Sico Capital Group’s research head Chiro Ghosh told us he expects some weakness when those markets reopen.

“The market added a higher risk premium after the recent escalation, reflecting concerns around energy stability, trade routes, and capital flows. The sharp decline and break of a key support level suggest a broader reset in risk appetite rather than simple profit-taking,” Sarah Alyasiri, financial markets analyst at CF Trade, tells EnterpriseAM.

The sell-off isn’t hitting all sectors equally. Alyasiri added that the pressure is concentrated on cyclicals — banks and basic materials — which are highly sensitive to foreign flows and global growth expectations. Ghosh notes that while the GCC tourism industry had a positive outlook for 2026, particularly with the anticipated GCC-wide visa, an escalation of the conflict may negatively impact the sector, along with real estate, aviation, and telecoms.

Energy is anchoring the index. Higher shipping and ins. costs are baking a risk premium into oil prices, which is supporting energy stocks — particularly Aramco, which closed up 3.4% — given their massive index weighting. Ghosh expects a further surge in oil prices when global markets open today as investors closely monitor the status of the Strait of Hormuz.

While the headline is red, the underlying movement is a rotation into safe havens. Alyasiri notes that fund managers are shifting toward defensive sectors like ins. and healthcare, while Ghosh sees the smart play is in moving toward lower beta names — including utilities, consumer, and high-dividend stocks — until there is a clear de-escalation.

What’s next: The trajectory depends on whether we see actual supply or shipping disruptions. “If risks remain contained, this pullback could become a selective [entry point],” Alyasiri says. However, if tensions persist, expect a wider sector divergence: energy and defensives will continue to outperform, while cyclicals remain under heavy pressure.

We’re keeping a close eye on oil prices

Pundits are still suggesting there’s a risk that oil rockets past USD 100 / bbl as Iran looks to choke the flow of crude out of the Gulf. Iran’s Tasnim News Agency claimed that the Strait of Hormuz is “effectively” closed and some ships reported receiving a radio broadcast on Saturday — reportedly from the Iranian navy — instructing them to leave the waterway as passage is banned.

Brent crude is at USD 75 this morning even after three ships were struck in the region yesterday— the first reported maritime attacks of the conflict so far. Attacks have so far been limited to the Arabian Gulf, with the Houthis yet to restart attacks on passing vessels in the Bab El Mandeb strait leading to the Suez Canal.

Oil tankers seem to have stopped moving through Hormuz, with roughly 240 vessels stopping near the chokepoint — most around Iran’s Bandar Abbas port, according to S&P Global. Around 130 of those ships were carrying cargo, but none were loaded with crude.

You can pump it out of the ground, but can you get it to market? While some think a pledge by Opec+ to boost output by as much as 206k bbl / d starting next month could offer relief, there’s a big catch: the majority of the group’s output comes from nations that are almost entirely reliant on the Hormuz Strait to deliver to the global market. “In such a scenario, the constraint is not upstream supply capacity but export routes and maritime transit,” Rystad Energy’s Jorge Leon tells EnterpriseAM.

“The cost of [covering] ships, containers, and crews, in addition to the refusal of some international ins. companies to [cover] war risks, will put pressure on global trade in the coming period,” former Suez Canal Authority chairman and Suez Chamber of Shipping head Abdel Qader Gaballah told EnterpriseAM.

Ins. premiums are lurching upward: A ship with USD 100 mn worth of goods, which used to pay roughly USD 250k per voyage, will now need to cough up USD 375k, the Financial Times reports.

Riyadh emerges as a travel hub amid airway closure

The relative calm in Riyadh helped it emerge as an exit point for those stranded in the Gulf, as King Khalid airport remains largely operational despite airspace closures. High-net-worth individuals, senior executives, and their families are reportedly driving from Dubai to Riyadh and boarding private planes for as much as USD 350k a trip to get out of the region or simply make business trips.

Civilian traffic closures continue for the airspaces of Iran, Iraq, Israel, Kuwait, Qatar, Syria, and Bahrain. As of yesterday, over 3.4k flights have been canceled across seven Middle Eastern airports.

Our budget airlines Flynas and Flyadeal have officially suspended several international routes until 3 March, joining an earlier suspension by Saudia. Major regional carriers, including Emirates, Qatar Airways, and Etihad, have suspended all services, with many groundings expected to last until at least this afternoon. The disruption extends to dozens of other airlines such as Turkish Airlines, Oman Air, and Egyptair, which have canceled routes to affected Gulf and Levant destinations.

The current state of play

As Operation Epic Fury enters its third day, neither the US and Israel nor Iran seem to be willing to de-escalate, with the killing of Supreme Leader Ayatollah Ali Khamenei having done nothing to slow the pace of the conflict. While airstrikes continued to target Iran’s military and political leadership, along with other targets throughout the country, a battered Iran has proved it still has the capabilities to respond and do damage to targets in Israel and Gulf nations on the other side of the Arabian Gulf.

Where do things stand this morning? Here’s what we know as of dispatch time this morning:

Top Iranian military and political officials, including the defense minister and commander of the Armed Revolutionary Corps, were killed in Saturday’s strikes alongside Supreme Leader Khamenei;
A three-man council including Iranian President Masoud Pezeshkian will run the country during a transitional period until a new supreme leader is chosen;
Strikes on Iran will continue “throughout the week or as long as necessary,” US President Donald Trump said, adding he “agreed to talk” to the new Iranian leadership;
Oman has been dragged into the conflict after its Duqm port was hit by drones;
Israel targeted Beirut earlier today after Hezbollah fired several missiles at Israel on Sunday.
A number of commercial vessels around the Strait of Hormuz were attacked yesterday, prompting ships and tankers to stay away for the time being;
The UK has agreed to let the US use British military bases for “defensive” strikes on Iranian missile sites;
European powers Germany, France, and the UK have affirmed their readiness to target Iran’s missile and drone launch capabilities;
Three US troops were killed and five wounded, reportedly in Kuwait, while a missile struck a bunker in Israel, killing at least nine and wounding dozens.

GCC damages are getting out of hand

What’s been targeted in the Kingdom? Iranian media reports said attacks since yesterday targeted Prince Sultan Air Base in Riyadh, air bases in King Tabuk and Khamis Mushait, and an unnamed military facility west of Jeddah. It’s not clear whether the attacks caused any damage on the ground or any casualties. The pace seems to have been much slower compared to neighbors.

Outside the Kingdom, Tehran is waging widespread attacks in a bid to expand the conflict and exert pressure on the US through regional allies. Missiles and drones sparked fires at commercial and residential sites such as Palm Jumeirah in the UAE and high-rises in Bahrain’s Manama, and threatened global supply chains with strikes on critical infrastructure like the UAE’s Jebel Ali and Oman’s Duqm commercial ports, despite widespread interceptions by regional air defense systems.

Gulf countries are reaching their limit: Riyadh summoned the Iranian ambassador to condemn the attacks, a move echoed by others including Kuwait and Bahrain, while the UAE went so far as to close its Tehran embassy and withdraw the entire diplomatic mission.

Could we be looking at a direct GCC-Iran confrontation? We think that’s highly unlikely. Some are speculating that the widespread targeting of civilian and military infrastructure could push the GCC to launch collective retaliatory strikes — but we think that is a path no one wants to walk as it will lead to further escalation while doing little to undermine Iran’s mid-range offensive capabilities.

For now, the wager seems to be on who can hold their breath the longest. Tehran is under the obvious pressure of relentless strikes by much-superior air and naval forces, an unclear transitional period ahead, and internal opposition that it had to suppress violently a few weeks ago.

GCC keeps door open on retaliation: Gulf countries have affirmed their “right to respond” to Iran’s strikes, following a meeting of the GCC’s Ministerial Council. The bloc emphasized that it is prepared to take necessary measures to safeguard its sovereignty.

Meanwhile, domestic pressure in the US could play a role in making the conflict shorter. A Reuters/Ipsos poll yesterday found that just one in four Americans supports US strikes on Iran. With the US in a midterm year, Trump critics — and increasingly many of the MAGA faithful — see the Trump administration’s military adventurism as a danger to the Republican Party’s electoral chances alongside growing discontent with the White House’s handling of the economy. Yesterday evening’s news of the first US casualties is also likely to add pressure.

More 2025 earnings roll in

Sabic Agri-Nutrients

Sabic Agri-Nutrients posted a 29.9% y-o-y jump in net income to SAR 4.3 bn in 2025 as revenue climbed 18.2% to SAR 13.1 bn, it said in an earnings release (pdf). The growth was largely price-led, with selling prices up 16% and volumes 2% higher.

Dividends: The company’s board greenlit the distribution of SAR 1.7 bn in dividends for 2H 2025 at SAR 3.5 per share, it said in a separate disclosure. The distribution date is set for Monday, 30 March.

Elm

Elm’s net income rose 14.5% y-o-y to SAR 2.1 bn in 2025 — though rising operating and finance costs caused the figure to trail Bloomberg analysts’ expectations of SAR 2.3 bn, a disclosure to Tadawul showed. Meanwhile, revenue climbed 27.8% y-o-y to SAR 9.5 bn, thanks to growth in the company’s digital business (+23%), business process outsourcing (+43%), and professional services (+19%).

Dividends: The company’s board will distribute SAR 350.4 mn in dividends at SAR 4.5 apiece, it said in a separate disclosure. The distribution date is set for Monday, 16 March.

Arabian Drilling

Arabian Drilling swung to a net loss of SAR 75.3 mn in 2025 from a net income of SAR 321.4 mn a year earlier, it said in an earnings release (pdf). Excluding a one-off SAR 114 mn noncash impairment in 4Q, adjusted net income for the year stood at SAR 39 mn. The drilling contractor’s revenue declined 5.1% y-o-y to SAR 3.4 bn as utilization fell to 75% from 83% in 2024, a drop partly offset by the full-year contribution of unconventional rigs and a new barge.

Saudi Ceramic

Saudi Ceramic swung back into the black in 2025 with a net income of SAR 180.7 mn, reversing an SAR 71.9 mn loss from the previous year, it said in a Tadawul disclosure. The turnaround was backed by an SAR 176 mn rise in gross income and an SAR 120 mn ins. payout. Revenue grew 10.5% y-o-y to SAR 1.5 bn in 2025, led by stronger sales of tiles, water heaters, and red bricks.

Amak

Al Masane Al Kobra Mining Co. (Amak) saw its net income jump 57.7% y-o-y last year to SAR 280.6 mn, it said in a disclosure to Tadawul. Management attributed this increase to higher revenues and lower selling and marketing expenses. Its top line surged 31.4% y-o-y to SAR 1.0 bn during the 12-month period, driven by higher gold, copper, and zinc prices.

Acwa taps new CEO + Maaden appoints CFO

Acwa Power appointed Samir J. Serhan (LinkedIn) as its new CEO, effective yesterday, the company said in a disclosure to Tadawul. Serhan succeeds Marco Arcelli (LinkedIn), whose contract was set to expire in April 2027, as part of a structured succession plan. Arcelli will remain with Acwa as advisor to the chairman.

About Serhan: Serhan previously served as Acwa’s president for Saudi Arabia and the Middle East, overseeing seven markets. He also held senior global roles at Air Products, Praxair, and the Linde group. He brings over 30 years of experience in industrial and infrastructure operations, with expertise in operational transformation, institutional capability building, and capital-intensive project management.

PLUS- Maaden taps new CFO: Saudi Arabian Mining Company (Maaden) appointed Gilberto Antoniazzi (LinkedIn) as CFO and executive VP, the company said in a disclosure to Tadawul. The post was previously held by Saulat Sultan, who was serving on an acting basis. Antoniazzi has more than 30 years of experience in global finance across a wide range of sectors including agrochemical, automotive, and manufacturing.

Haven first

As tensions flare across the Middle East, investors are rotating into safe-haven assets like Treasuries, gold, and the CHF, ditching the reflex to buy the dip in equities, Bloomberg reports.

The playbook is explicit: “Haven first, ask questions later,” said Natixis’ John Briggs, pointing to a larger-than-expected escalation. Meanwhile, Barclays strategists cautioned against rushing to buy equities on weakness, arguing the risk-reward “doesn’t seem compelling” yet.

Emerging markets could fall out of favor, after briefly being a major wager for the world’s largest asset managers, who wished to rotate away from the USD and developed-market assets as policy uncertainty clouds the US outlook.

Some expect Treasuries to rally and yields to fall on safe-haven demand. However, a sustained oil spike could complicate the Fed’s path by stoking inflation and prompting a more cautious stance on rate cuts.

Oil is the swing factor: Traders are watching energy markets — especially the Strait of Hormuz — as strategists warn that if shipping is disrupted, “all [wagers] are off” for risk assets. Even the threat of prolonged turmoil is enough to push money managers toward safety.

Asia may feel the shock first: Saxo Bank’s Charu Chanana expects a risk-off open, with pressure on airlines, cyclicals, and trade-exposed sectors, while energy, mining, and defense could prove more resilient, according to an emailed note seen by EnterpriseAM. Higher crude prices, she notes, reflect the cost of moving barrels just as much as fuel prices themselves, with war-risk premia and ins. repricing keeping prices sticky.

Gold is another clean hedge in the crossfire: It can act as both geopolitical ins. and an inflation buffer — and, as Saxo notes, it can rise alongside a firm USD in classic risk-off fashion. Chanana also pointed to defense and other security-linked industries as essential classes, along with gold, to hedge against ever-increasing geopolitical risks.

MARKETS THIS MORNING-

Asia-Pacific markets are starting off the week in the red as investors ditch their stocks for safe-haven assets as the escalating regional war shows little signs of calming down. The Hang Seng is looking at the steepest losses in early trading this morning. Over on Wall Street, it’s more or less the same, with futures down. Gold futures, meanwhile, are up.

TASI	10,476	-2.2% (YTD: -0.1%)
MSCI Tadawul 30	1,419	-2.2% (YTD: +2.3%)
NomuC	22,598	-0.9% (YTD: -3.0%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	47,984	-2.5% (YTD: +14.7%)
ADX	10,454	-1.3% (YTD: +4.6%)
DFM	6,504	-1.8% (YTD: +7.6%)
S&P 500	6,879	-0.4% (YTD: +0.5%)
FTSE 100	10,911	+0.6% (YTD: +9.9%)
Euro Stoxx 50	6,138	-0.4% (YTD: +6.0%)
Brent crude	USD 72.87	+2.9%
Natural gas (Nymex)	USD 2.86	+1.1%
Gold	USD 5,248	+1.0%
BTC	USD 65,760	-2.1% (YTD: -25.2%)
Sukuk/bond market index	924.46	+0.2% (YTD: +0.6%)
S&P MENA Bond & Sukuk	153.89	+0.1% (YTD: +1.3%)
VIX (Volatility Index)	19.86	+6.6% (YTD: +32.8%)

THE CLOSING BELL: TADAWUL-

The TASI fell 2.2% yesterday on turnover of SAR 5.4 bn. The index is down 0.1% YTD.

In the green: Almarai (+4.1%), Saudi Aramco (+3.8%), and AlRajhi Takaful (+3.4%).

In the red: SRMG (-9.6%), Elm (-9.1%), and EIC (-8.0%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.9% yesterday on turnover of SAR 16 mn. The index is down 3% YTD.

In the green: Multi Business (+16.2%), Horizon Educational (+11.0%), and Alashghal Almoysra (+10.0%).

In the red: Almodawat (-11.9%), Knowlegdenet (-11.7%), and Alqemam (-10.8%).

CORPORATE ACTIONS-

Mouwasat Medical Services’ board recommended an SAR 225 mn dividend payout at SAR 1.125 apiece, it said in a disclosure to Tadawul. The distribution date is yet to be announced.

CALENDAR

MARCH

12 March (Thursday): Deadline for real estate registration for 253.2k properties in 499 neighborhoods across Riyadh, Qassim, Makkah, and Hail.

18-23 March (Tuesday-Monday): Eid Al Fitr holiday (TBC).

21 March (Saturday): Fanatics Flag Football Classic, Kingdom Arena, Riyadh.

25-27 March (Wednesday-Friday): Future Investment Initiative Institute, Faena Hotel, Miami Beach.

31 March (Tuesday): Zatca’s 23rd E-invoicing integration wave deadline.

APRIL

6 April (Monday): Procurement and Supply Chain Futures Forum, Al Faisaliah Hotel, Riyadh.

6-7 April (Monday-Tuesday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

12-15 April (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

13-16 April (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

20-22 April (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

20-22 April (Monday-Wednesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center.

20-22 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh

22-23 April (Wednesday-Thursday): The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah.

27-29 April (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

28 April (Tuesday): GC Summit Saudi Arabia, Riyadh.

MAY

3-9 May (Sunday-Sunday): The Global Sustainability Expo, The Arena Riyadh Venue.

5-6 May (Tuesday-Wednesday): SkyMove Air Cargo MENA, Riyadh.

19-21 May (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

24-28 May (Sunday-Thursday): Eid al-Adha holiday.

JUNE

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

SEPTEMBER

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

OCTOBER

12-15 October (Monday-Thursday): World Energy Congress, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

NOVEMBER

24-28 November (Tuesday-Saturday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
November: The UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia;
November: The Esports Nations Cup, Riyadh;
The Intervision international music competition will take place in Saudi Arabia;
6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

Signposted to happen sometime in 2027:

The World Water Forum takes place in Riyadh;
The Ocean Race finishes in Amaala on the Red Sea;
Riyadh-Kudmi transmission line to be completed.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

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