Saudi Arabia’s benchmark stock index, TASI, dropped as much as 5% to 10,214 at the open on Sunday—its lowest level since March 2023—before rebounding to around 10,700 as investors weighed the impact of U.S. and Israeli strikes on Iran. In response to the attacks, Iran moved to restrict traffic through the strategic Strait of Hormuz, a vital corridor for roughly one-fifth of global oil supply and substantial volumes of natural gas, and launched strikes across neighbouring countries, including Saudi Arabia. Although escalating tensions in the Middle East are likely to disrupt regional economic activity and dampen investor sentiment, oil prices are expected to rise. Higher crude prices could, in turn, support Saudi Arabia’s economy, reflecting its role as one of the world’s largest oil exporters.