Gulf shares slide on oil rout, Iran’s return

Gulf markets nosedived on Sunday following the sharp decline in oil prices and the expected rise in Iranian crude exports after the lifting of sanctions.

And it claims that it will produce 500,000 additional barrels of oil per day once the sanctions are lifted, rising to an extra one million barrels before the end of the year.

The dramatic moves came after the U.S., the United Nations and Europe removed sanctions on Iran, allowing the country to move ahead with its bid to redeem its share of the oil market with stepped-up production. While the current sell-off would create buying opportunities in quality stocks in Oman and also the region, we advise investors to maintain caution and look for staggered buying looking at the long-term perspective, GBCM’s Sundar said. “But the dramatic movement of oil prices that we have seen in the past weeks, especially in the last few days, creates rather serious risks for the budget”.

The benefit for consumers from historically low oil prices is being blunted by changes in fuel taxation and a reduction in subsidies, according to Paul Horsnell, head of commodities research at Standard Chartered Plc in London.

The Abu Dhabi Securities Exchange also slumped 4.24 per cent but remained above the 3,700-point mark at 3,787.40 points.

Yields on the benchmark 10-year U.S. Treasury note were poised to fall below 2 percent and gold rose as retreating oil prices and equity markets underpinned demand for assets perceived as safer.

“Calling the bottom in a market is always a unsafe practice, akin to catching a falling knife”, said Michael Hewson, chief market analyst at CMC Markets.

The US oil-price benchmark ended at $1.78, or 5.7 percent, lower at $29.42 a barrel, the lowest result since November, 2003. The yield on Saudi Electricity Co.’s bonds due April 2043 surged 32 basis points, the most on record, to 6.93 percent. Other regional markets have also dropped sharply this year: Doha stocks are down 18% so far and Dubai’s main index has lost about 15% in value. The EGX 30 Index fell 1.7 percent to the lowest level since October 2013.

Crude oil price plunged below $30 a barrel Friday morning amid speculation that OPEC will continue pumping oil at a breakneck pace despite the global supply glut.

Buyers of Iranian crude are free to import as much of the country’s oil as they want after the International Atomic Energy Agency determined that the country had curbed its ability to develop an atomic weapon.

Asali appeared to strike a defiant tone, contradicting earlier comments from other senior Iranian oil officials that Iran would not flood the market at a time of global oversupply and an oil price crash. That may help Israel become a regional energy hub and generate billions of dollars for the state, according to the nation’s largest investment house. The yield fell to 2.0347 percent.