By Ateeq Shariff
Most major stock markets in the Gulf fell on Tuesday on fading hopes for a deal to end the U.S.-Israeli war on Iran, amid sharp differences between Tehran and Washington over a peace proposal.
U.S. President Donald Trump said on Monday that a ceasefire with Iran was "on life support," citing disagreements over several demands, including a halt to hostilities on all fronts, the lifting of a U.S. naval blockade, the resumption of Iranian oil exports and compensation for war damage.
Tehran also stressed its sovereignty over the Strait of Hormuz, a key shipping route through which about a fifth of global oil and liquefied natural gas supplies pass.
Saudi Arabia's benchmark index TADAWUL:TASI declined 1.1%, dragged by a 1.6% fall in Al Rajhi Bank TADAWUL:1120 and an 8.9% plunge in ACWA Power TADAWUL:2082.
However, oil major Saudi Aramco TADAWUL:2222 gained 0.6%.
Brent crude futures ICEEUR:BRN1! gained $3.44, or 3.3%, to $107.65 a barrel by 1315 GMT.
GCC stock markets remained under pressure after the U.S. president rejected Iran's latest proposal, fueling concerns over renewed regional tensions. Any escalation could weigh on investor sentiment and dampen hopes for a swift resolution, said Milad Azar, market analyst at XTB MENA.
"Prolonged constraints in the Strait of Hormuz could continue to disrupt logistics and push oil prices higher."
Dubai's main share index DFM:DFMGI dropped 0.6%, with top lender Emirates NBD DFM:EMIRATESNBD losing 2.7% and blue-chip developer Emaar Properties DFM:EMAAR down 2.1%.
In Abu Dhabi, the index ADX:FADGI retreated 0.9%, hit by a 3% slide in ADNOC Gas ADX:ADNOCGAS following a drop in first-quarter profit.
The United Arab Emirates carried out military strikes on Iran, including an April attack on a refinery on Lavan Island, the Wall Street Journal reported on Monday, citing people familiar with the matter.
The UAE has not publicly acknowledged the strikes, and Reuters could not immediately verify the report.
The Qatari index QSE:GNRI closed 1% lower, as most of its constituents were in negative territory.
Outside the Gulf, Egypt's blue-chip index EGX:EGX30 finished 0.8% lower.
Saudi Arabia
TADAWUL:TASI fell 1.1% to 11,039
Abu Dhabi
ADX:FADGI lost 0.9% to 9,699
Dubai
DFM:DFMGI dropped 0.6% to 5,783
Qatar
QSE:GNRI declined 1% to 10,524
Egypt
EGX:EGX30 down 0.78% to 54,059
Bahrain
BAHRAIN:BHBX added 0.2% to 1,933
Oman
(.MSX30) eased 0.3% to 8,285
Kuwait
KSE:BOURSA down 0.6% to 9,273