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Tensions from the Israel-Hamas conflict and concerns about escalating attacks disrupting crude oil flows have been key contributors to the market’s instability. These geopolitical pressures, coupled with financial worries such as high interest rates, have led to a minor increase in oil prices. This increase comes in the wake of close cooperation in the oil market between OPEC+ leaders Saudi Arabia and Russia.
The impact is not only felt on the Tadawul All Share Index but also on the broader MSCI GCC Countries Combined Index, which has declined by 6% in 2023. Saudi banks, which make up 36% of the Tadawul, are grappling with these high interest rates. The increased rates are affecting credit demand and driving up the costs of debt refinancing.
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