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The deployment of US military forces in the Arabian Gulf has constituted a defining feature of the regional security architecture since the final decade of the twentieth century. As the Middle East’s geopolitical environment has grown increasingly complex, American military bases have become a central component in the regional balance of deterrence and stability within a geographic space of exceptional strategic and economic significance. The geostrategic importance of the Arabian Gulf extends beyond its vast hydrocarbon reserves—among the largest globally—to include its controlling position over the Strait of Hormuz, one of the most vital maritime chokepoints in the international energy trade. Accordingly, the American military presence was never a temporary tactical arrangement; rather, it crystallized gradually into an integral component of a broader strategic approach aimed at managing regional equilibria and safeguarding global economic interests. Challenges Arising from the Military Presence Despite its stabilizing intent, this security arrangement generates a complex set of political and strategic dilemmas. The presence of foreign military bases in a region characterized by persistent security tensions is liable to draw host nations indirectly into the dynamics of regional and international conflict. This dynamic has become particularly visible during the recent confrontation between the United States and Israel on one side and the Islamic Republic of Iran on the other, which has led to massive Iranian ballistic missile and drone attacks on Qatar, the United Arab Emirates, Kuwait, Bahrain, Saudi Arabia, and Oman. Tehran claims that it is targeting its Gulf neighbors because these countries host American military installations, despite their own lack of direct involvement in combat operations. Moreover, these states have consistently and categorically prohibited the use of their territories as launchpads for offensive military actions against Iran, adhering to a deliberate policy designed to avoid direct engagement in the conflict. Nevertheless, they continue to find themselves at the center of regional escalations simply because of their geographic location and security partnerships. Historical Context of the American Military Presence The roots of the American military presence in the Gulf can be traced back to the structural transformations that reshaped the region beginning in the late 1970s. The Iranian Revolution of 1979 brought down one of Washington's most important strategic allies in the Middle East, creating a significant vacuum in its regional security architecture and a need for a new arrangement. However, the decisive expansion of the US military footprint occurred in the aftermath of Iraq’s invasion of Kuwait in 1990. This crisis fundamentally altered the Gulf security order and reinforced the conviction among regional states that the nature and magnitude of regional threats could exceed their own defense capabilities. In the years that followed, the United States steadily expanded its network of military installations, establishing air, naval, and ground facilities across several member states of the Gulf Cooperation Council (GCC), which itself was formed in the wake of the Iranian revolution. Strategic and Economic Dimensions of the Security Partnership Internationally, available estimates indicate that the United States maintains military bases in approximately 80 countries—typically through bilateral defense arrangements based on mutual interests. For the Gulf states, this military presence represents one of the most effective instruments of strategic deterrence against regional threats, particularly given the chronic state of tension with Iran. These bases provide more than a conventional security umbrella, however; they also offer access to advanced defense systems, intelligence capabilities, and military technologies that would be exceedingly difficult to develop independently. Furthermore, the military partnership with the US contributes to the institutional enhancement of the Gulf armed forces through joint exercises, operational coordination, and intelligence sharing. Economically, the stability underpinned by this security architecture not only ensures the uninterrupted flow of energy supplies and the steadiness of global markets—an essential factor for Gulf economies whose revenues remain heavily dependent on hydrocarbon exports—but plays a pivotal role in the diversification of Gulf economies away from hydrocarbons, by allowing them to attract capital and talent for other sectors. The Normative Paradox in Iranian Discourse These bases are not without controversy, however, especially within Iranian political discourse. Yet within the ongoing debate over the legitimacy of foreign military bases in the region, a striking normative paradox emerges in Iran’s own position. While Tehran consistently condemns the foreign military presence in the Gulf as an infringement upon regional sovereignty, in practice the Islamic Republic has developed an extensive network of military influence beyond its own borders, particularly in Arab states such as Lebanon, Syria, Iraq, and Yemen. In Lebanon, for example, Iran helped establish Hezbollah as part of its “forward defense” strategy against Israel, enhancing the armed group’s capabilities to the point that it is the most powerful organization in the country and challenges the sovereignty of the Lebanese state. In Syria, Iran provided direct military, logistical, and political support to the massively unpopular regime of Bashar al-Assad, while keeping the country as a land bridge for its proxy network. Tehran also played an instrumental role in persuading Russian President Vladimir Putin to deploy Russian forces on Syrian soil to prop up the regime—an intervention that led to the establishment of permanent Russian military bases under long-term agreements. Despite its opposition to the American presence, Iran has actually engaged in indirect coordination with the US military at various points, including in Iraq during operations against armed groups. Iranian officials even acknowledged that this tacit cooperation with Washington helped stabilize the political situation in both Iraq and Afghanistan. Taken together, these realities raise questions about the internal consistency of Iran’s criticism of foreign military bases while it simultaneously projects military influence in ways that undermine the sovereignty of other states. Future Prospects for the American Military Presence in the Gulf The question of American military bases in the Arabian Gulf sits at the intersection of national security considerations, national sovereignty requirements, and geopolitical balance calculations. As the international political order undergoes structural changes and competition among major powers intensifies, the US military presence in the Gulf is likely to persist. However, it is expected to evolve in form and function. Future deployments are likely to rely increasingly on flexible basing arrangements, advanced military technologies, rapid-response units, and remote operational capabilities. Ultimately, the success of this security equation will remain contingent upon the ability of the US and Gulf states to strike a precise and sustainable balance between the requirements of collective security and the preservation of sovereign decision-making autonomy within an international system characterized by accelerating shifts in the balance of power and influence. Dr. Khalid Al-Jaber serves as the Executive Director of the Middle East Council on Global Affairs in Doha. A leading researcher and academic, he is widely recognized for his expertise in international relations, political communication, and the dynamics of the Middle East and North Africa (MENA) region.

As conflict chokes off oil exports from the Arabian Gulf, governments around the world are activating a critical line of defense against price shocks: emergency crude stockpiles. To ease surging prices, member nations of the International Energy Agency have agreed to release 400mn barrels from such reserves, which would be the group’s largest discharge ever.Among the stockpiles that will be tapped are the US Strategic Petroleum Reserve, or SPR, created in the 1970s as a safety net against energy crises. Earlier, US President Donald Trump had expressed reluctance to release oil from the US reserve, characterizing high energy prices as temporary. How big are emergency oil stockpiles?According to the IEA, the 38 mostly wealthy members of the Organization for Economic Cooperation and Development collectively have at least 1.2bn barrels of oil put aside in emergency public stores. The Paris-based energy group, which coordinates stockpile discharges for OECD countries, has helped implement five such interventions in the past: in the buildup to the 1991 Gulf War, after hurricanes Rita and Katrina in 2005, following the outbreak of civil war in Libya in 2011, and twice in 2022 in response to disruptions connected to the war in Ukraine.Among IEA members, the US has the largest buffer, which is made up of four heavily-guarded sites along the Gulf of Mexico. These deep and massive underground caverns have the capacity to hold more than 700mn barrels of oil. According to Energy Department data, they currently hold about 415mn barrels, so are just 60% full, having been depleted in a record drawdown by then-President Joe Biden following Russia’s attack on Ukraine. The Trump administration plans to release 172mn barrels as part of the IEA’s coordinated effort.China — the world’s biggest oil importer — has in recent years built up what appears to be an even larger reserve capacity. The country has about 1.4bn barrels of crude in strategic storage, according to estimates from Columbia University’s Center on Global Energy Policy. Will tapping the reserves make up for the oil that’s being choked off by the war?Oil traders have expressed doubts about that. Even if the US SPR’s maximum drawdown rate is coupled with flows from other IEA members, it might cover just a portion of the 11mn-to-16mn barrels of supply from the Arabian Gulf that Citigroup Inc estimates is being lost each day.The maximum drawdown capability of the SPR is 4.4mn barrels a day, according to the Energy Department’s website, and it takes 13 days for SPR oil to reach the open market after a presidential decision. However, an analysis prepared by the Energy Department in 2016 said the actual amount could be limited to 1.4mn barrels to 2.1mn barrels per day. During the 2022 release following the Russia’s invasion of Ukraine, the amount of oil released from the SPR never topped more than 1.1mn barrels a day, according to an analysis of Energy Information Administration data by ClearView Energy Partners.It will take about 120 days to fully deliver the amount the US plans to release, according to the Energy Department. Why was the Trump administration reluctant to tap US oil reserves?One line of argument was that oil markets had enough supply to withstand the crisis. US Energy Secretary Chris Wright said on March 8 that there’s “no shortage” thanks to booming US production.Part of the Trump administration’s hesitation may have been political. The president and other Republicans have spent years bashing the Biden administration for drawing down the US reserve, and unleashing oil from it could open them up to criticism from Democrats.There were logistical reasons as well. The Trump administration has been trying to replenish the reserve — the president has vowed to refill it “right to the top” — but the cache isn’t set up to receive oil and release it at the same time. In addition, the administration has said the drawdown initiated by Biden damaged the facilities, and repairs are ongoing. In what circumstances can US presidents release stockpiled oil?It’s pretty much the president’s prerogative. The 1975 law that established the SPR says a president can order a full drawdown in the event of a “severe energy supply interruption” that threatens national security or the economy. A limited drawdown (as much as 30mn barrels) can be ordered in the event of “a domestic or international energy supply shortage of significant scope or duration.” How have US presidents tapped the reserve?Beyond ad hoc responses to localized oil disruptions, the US had tapped its oil reserve only a handful of times before 2022. Biden did so late in 2021, authorizing the release of 50mn barrels as part of a coordinated multi-nation bid to lower surging fuel costs. In 2011, President Barack Obama released 30mn barrels as part of the joint effort with other nations to counter supply disruptions from Libya. In 2005, President George W Bush released 11mn barrels in the wake of Hurricane Katrina. And in 1991, under President George HW Bush, 17mn barrels were released during the first Gulf War. In 2017, the Energy Department authorized the release of 5mn barrels to Gulf Coast refineries when Hurricane Harvey wreaked havoc on the region. Such arrangements are designed to address short-term emergency needs, and the crude is repaid, in kind, at a future date. Test releases take place from time to time, as well as limited releases in the form of swaps. What’s the outlook for refilling the US stockpile?Trump has vowed to refill the reserve, but doing so far has been a struggle. Last March, when oil prices were around $68 a barrel, Secretary Wright estimated a refill would cost $20bn. So far, Congress has only given the Energy Department $171mn with which to purchase crude, a portion of which the agency is using to buy some 1mn barrels.Wright has said the US is examining “creative ways” to refill the oil stockpile by which private companies would provide the oil. This was an apparent reference to the use of a so-called royalty-in-kind arrangement in which the US accepts oil and gas from producers in lieu of cash royalties on federal energy resources. 

Traders were on Wednesday awaiting further details of President Donald Trump’s plan to guarantee the free flow of energy shipments through the Arabian Gulf, as the shipping industry warned the proposal may struggle to restore confidence after attacks effectively shut the Strait of Hormuz.The disruption threatens to sever seaborne energy trade between some of the world’s largest producers and key consuming nations, heightening risks for global markets. Brent crude was little changed after jumping more than 10% this week, while European gas prices slipped following the biggest rally in four years.Trump said on Tuesday the US would offer insurance backstops and naval escorts for commercial vessels transiting the region, seeking to reassure markets rattled by a spiraling conflict involving Iran. Multiple attacks on vessels in recent days have choked off traffic through the narrow waterway.The world’s largest shipping industry association said it was seeking clarification on how the US-led convoy system would operate, warning that protecting every tanker in the region would be “unrealistic.” Officials at two major commodity trading houses said they doubted the measures would materially reduce the danger of attack, even with military escorts in place.“Nothing is sure and we need immediate clarity,” said Khalid Hashim, managing director of Precious Shipping Pcl, a Thai firm that owns bulk carriers. “Lives are at risk, cargoes are at risk, ships are at risk. We need immediate cover that protects us from all this,” he said.The company currently has some ships in the Gulf, and has been struggling to secure war-risk cover before they sail from the region, he said.Two shipowners said on Wednesday they would be open to joining escorted convoys, while two people involved in the insurance market said that escorts would help them to feel more comfortable than they currently are about covering the risks, asking not to be identified discussing private deliberations.With ships unable or unwilling to transit the strait, producers cannot export, supertanker costs are skyrocketing, and storage at many Gulf refineries is filling up fast. Insurers have largely withdrawn cover for transiting the Strait of Hormuz, though policies are available for ships stuck in the Gulf, as long as vessels don’t transit.“The core thing shipowners are thinking about is the real risk of loss,” said Karnan Thirupathy, partner at Kennedys Law LLP, who specializes in the commodities, shipping and insurance sectors. “No one goes into the trade if the risk of loss is simply too high.”The knock-on effects of the halt have been swift. Iraq, the biggest Middle Eastern oil producer after Saudi Arabia, has already begun deep cuts to output and faces even deeper reductions, in the clearest sign yet of stress on suppliers in the region.Trump’s solution involves tapping the US International Development Finance Corp — an institution that typically supports private-sector investment in developing countries — which will in turn support charterers, shipowners and key maritime insurers.“While President Trump’s comments about insurance and tanker escorts caused a pullback in oil prices, we question how much planning has been done on the insurance backstop thus far and think there could be a number of challenges in executing this plan quickly,” RBC Capital Markets LLC analysts said in a note.There is international precedent. In November 2023, a facility was set up by partners including Lloyd’s insurers and the Ukrainian government to provide affordable war risk insurance for ships underpinning Ukraine’s maritime exports, particularly grain cargoes. And the DFC has provided some assistance with war risk reinsurance, something it could repeat.Still, an updated US-organized version to cover oil, gas and fuels across the Arabian Gulf would be on a far larger scale, and more complex, given the number of producers and consumers involved.Oil prices did pare some of their gains after Trump’s announcement on Tuesday before resuming their advance. With limited details on hand, shipowners say they were cautious about both the insurance provision and the cost.Some owners with ships in the region said they were yet to hear from the US. They asked not to be named as they are not authorized to speak to the media. 

His Excellency the Minister of State for Interior Affairs, Sheikh Abdulaziz bin Faisal bin Mohammed al-Thani, has honoured senior officials overseeing the joint tactical exercise of the security agencies of the Gulf Co-operation Council (GCC) states, “Arabian Gulf Security 4”, along with several commanders from participating US forces. Those recognised included Major General (Staff) Abdullah bin Mohammed al-Suwaidi, head of the exercise’s supreme committee, as well as chairmen of the corresponding committees from GCC member states.**media[413015]**The honours were presented on the sidelines of the closing ceremony of the exercise, in recognition of the professional and organisational efforts that contributed to its success. The drill featured advanced field co-ordination, integrated procedures and the exchange of expertise between GCC security agencies and the United States, aimed at strengthening collective security and regional stability.  

The Secretary-General of the Gulf Co-operation Council (GCC), Jasem Mohamed AlBudaiwi, affirmed that the Arabian Gulf Security 4 joint tactical exercise for security agencies in the GCC countries reinforces Gulf security integration and embodies the GCC states’ unity and their shared destiny. During his participation in the closing day of the exercise, AlBudaiwi stated: “This fourth edition of the drill, conducted by the GCC ministries of interior with the participation of specialised units from the friendly United States of America, is of paramount importance in supporting the collective Gulf security framework.” The secretary-general added that the Arabian Gulf Security 4 exercise embodies the mutual commitment to developing security work mechanisms, exchanging expertise and best practices, as well as unifying efforts in confronting cross-border risks and threats. He pointed out that such exercises constitute a fundamental pillar for strengthening institutional integration and activating security co-operation avenues among member states. The GCC secretary-general commended the efforts of the Qatari Ministry of Interior in hosting and organising this exercise, and the resources it provided that contributed to its success, as well as the efforts of the participating forces from the Ministries of Interior. He expressed his hope that the exercise would achieve its strategic objectives, fulfilling the aspirations of the leaders of the GCC states, and ensuring sustained security and stability to the peoples of the GCC countries. 

Qatar officially launched the fourth edition of Arabian Gulf Security — a large-scale joint tactical exercise bringing together security forces from across the Gulf Cooperation Council — in a ceremony Sunday under the patronage of His Excellency the Minister of Interior and Commander of the Internal Security Force (Lekhwiya), Sheikh Khalifa bin Hamad bin Khalifa al-Thani. The exercise, which runs until 4 February, features comprehensive participation from all six GCC member states — Qatar, Bahrain, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates — alongside specialised security units from the United States. His Excellency Undersecretary of the Ministry of Interior Abdullah bin Khalaf bin Hattab al-Kaabi attended the opening ceremony, along with Assistant Secretary-General for Security Affairs at the GCC General Secretariat Brigadier-General Hamad Ajlan al-Amim, Their Excellencies the heads of the exercise's higher committees from across GCC nations, and senior officers and representatives of the participating security agencies. Arabian Gulf Security 4 comprises over 70 advanced training scenarios, amassing more than 260 hours of intensive field drills aimed at sharpening tactical preparedness and boosting operational efficiency. Officials have underscored the exercise's core objectives: to elevate security readiness among participating forces, strengthen integration and field co-ordination across multiple agencies, and assess and refine operational plans, response protocols, and joint interoperability. The drills are designed to reflect the advanced professionalism and evolving capabilities of Gulf security agencies in facing contemporary security challenges. The scenarios are built around real-world situations, spanning from counterterrorism and emergency response to complex field operations, enabling participating forces to critically evaluate and enhance collective strategies. Arabian Gulf Security 4 forms part of a wider series of periodic joint tactical exercises, initiated by GCC Interior Ministers, with the goal of reinforcing collective regional security and fostering a unified operational command structure. The first edition was held in Bahrain in 2016, followed by the second in the United Arab Emirates in 2019, and the third in Saudi Arabia's Eastern Province in 2022. The ongoing fourth edition now highlights Qatar's pivotal role as a strategic host and active contributor to regional stability. This continued collaboration supports the GCC's broader mission of developing an integrated and agile security framework, as laid out in the Joint Security Agreement and in line with the GCC's collective security principles. 

Under the patronage of His Excellency Sheikh Khalifa bin Hamad bin Khalifa al-Thani, Minister of Interior and Commander of the Internal Security Force (Lekhwiya), Qatar is launching one of the region’s most significant joint security events — the Arabian Gulf Security 4. This large-scale tactical exercise brings together security agencies from across the Gulf Cooperation Council (GCC) and strategic partners from the United States, underscoring a shared commitment to collective defense, preparedness, and regional stability. Hosted by Qatar for the first time, the 11-day exercise officially begins this morning and marks a new chapter in regional security co-operation. Participating forces include security apparatuses from the United Arab Emirates, Bahrain, Saudi Arabia, Oman, and Kuwait, alongside specialised US units. The event highlights the integration of Gulf expertise, the strengthening of operational partnerships, and the advancement of joint readiness across multiple security domains. Designed to address the evolving landscape of security challenges, Arabian Gulf Security 4 aims to enhance coordination mechanisms, unify response strategies, and reinforce the GCC’s capacity for effective crisis management. Over 70 complex scenarios will unfold across 260 hours of intensive field exercises, testing operational measures, decision-making frameworks, and communication across command levels. The exercise covers a wide spectrum of simulations—including counter-terrorism, civil unrest, cyber threats, border security, and natural disaster response — allowing participating forces to test and refine both tactical capabilities and command-and-control structures. Aligned with international standards and best practices, the drill places strong emphasis on interoperability, information sharing, and rapid deployment readiness. Extensive preparations throughout 2025 saw a series of coordination meetings held in Doha, during which Qatar played a leading role in operational planning and logistical alignment. This leadership further underscores Qatar’s growing stature as a regional hub for security innovation and coordination. “Qatar has once again proven its ability to serve as a hub for high-level coordination and security innovation in the Gulf,” a regional analyst, reflecting widespread recognition of the country’s organisational capacity and strategic vision, said. Arabian Gulf Security 4 will conclude on February 4, with participating states conducting joint evaluations and sharing outcomes to refine collective security frameworks and sustain long-term cooperation among GCC partners. 

Qatari men's team defeated Saudi Arabia 2-1 in the second round of the Arabian Gulf Padel Championship, which Qatar is currently hosting on the Padel Inn courts until September 19.The tournament, which kicked off Tuesday and is organised by the Qatar Tennis, Squash, Padel and Badminton Federation, will see the participation of various Gulf teams: Qatar, Saudi Arabia, the UAE, Kuwait, Bahrain and Oman. The tournament will be held in a league format, with each team playing three matches against the opposing team.The Qatari men's national team succeeded in achieving victory in two of the three matches it played against its Saudi counterpart, as the duo consisting of Rashid Nawaf and Hassan Wali won the first match in two sets to none, with a score of 6-2 and 6-2.In the second match, the duo consisting of Mohammed Saadoun and Meshari Nawaf won in two sets to none, with a score of 6-0 and 6-0. Meanwhile, the duo consisting of Ali al-Saadi and Khaled Saadoun lost the third match in two sets to one, with a score of 5-7, 6-2 and 0-6.This is the second consecutive victory for the Qatari team, having defeated Oman 3-0 in the first round.The Qatari national team is scheduled to meet its Kuwaiti counterpart Wednesday, in the third round of the tournament.For his part, Rashid Nawaf, a player on the Qatari padel team, expressed his happiness with the team's victory over Saudi Arabia.Nawaf said in a statement following the match: "We performed well against the Saudi team, and our performance reflected the team's readiness to achieve the best possible results during the tournament."He added, "Our goal is to continue our strong performance in the upcoming matches, and our ambition is to represent Qatar in the best possible way in this Gulf Cup."Nawaf called on Qatari fans to attend the Padel Inn courts to support the team, saying, "Fan support makes a difference, and we hope to see fans in large numbers at upcoming matches to push us toward continued victories and our quest to compete for the title."

Qatar will host the Arabian Gulf Padel Championship Qatar 2025 from September 15 to 19, organised by the Qatar Padel Federation at the Padel courts in Aspire.Tariq Zainal, Secretary General of the Qatar Tennis, Squash, Padel and Badminton Federation, confirmed at a press conference on Wednesday that the tournament will feature competitions in three categories: men's, women's and juniors. The draw is scheduled to be held on September 14.During the conference, the Qatar Padel Federation announced the signing of a platinum sponsorship agreement with Qatar Railways Company (Qatar Rail) for the championship. The agreement was signed by Zainal and Qatar Rail’s Director of Communications and Public Relations Abdullah al-Mawlawi.Zainal expressed the Qatari Federation's pride in Qatar Rail's joining as a platinum partner of the Arabian Gulf Padel Championship, given its significant support for sports, athletes, and community work in Qatar.Zainal emphasised that this partnership reflects the integrated efforts of national institutions and the sports sector, which will give the federation greater momentum to continue developing padel and strengthening its presence in the Gulf, regionally, and internationally.Zainal also welcomed all participating delegations and players, stressing his full readiness to host this Gulf event and organize it according to the highest standards, thus consolidating Qatar's position as a leading sports destination in the region and the world.For his part, al-Mawlawi said: “We are delighted to co-sponsor this important event. Our participation as a platinum sponsor of the Arabian Gulf Padel Championship, hosted by the Qatar Padel Federation, is in line with our corporate social responsibility strategy and our constant commitment to supporting sporting events that contribute to spreading the culture of exercising and promoting a healthy lifestyle among community members.”He added that Qatar Rail believes in the pivotal role sports play in developing communities by improving the quality of life and ensuring the health and safety of its members. Through this sponsorship, "we reaffirm our commitment, particularly to padel, as well as supporting the development of Gulf sporting talents and efforts aimed at consolidating Qatar's position as a leading regional destination for hosting major sporting events."Al-Mawlawi continued, "We, in turn, look forward to contributing to providing the best possible conditions for organizing a successful tournament and enjoying the unique Gulf talent and competitions that the tournament will witness. We wish all the best to the participating teams and players."

Saudi Arabia’s battered stock market is looking increasingly attractive to foreign investors because of rock-bottom valuations and bets that the oil price won’t drop much further.Investors from beyond the Arabian Gulf accounted for 41% of total Saudi equities buying in the week ended August 28, one of the highest ratios on record, according to Saudi stock exchange data compiled by Bloomberg Intelligence.The flows signal that a rush of reforms making it easier for foreigners to buy Saudi stocks is working. For the time being, however, risks still have the upper hand with the Tadawul All Share Index down 11% year to date and domestic investors on the retreat, along with crude prices.Nishit Lakhotia, head of research at SICO Bank, said stock investors are currently pricing in a “worse-case scenario” for the Saudi market, which he expects to bottom out shortly, unless oil drops below $60 a barrel — which would amount to a roughly 10% drop from current levels.“We believe the momentum is still there in the economy, which does not warrant such depressed valuations,” he said. “While it’s hard to predict when exactly the market can turn, there will likely be a point — sooner than later — when smart investors will start buying.”The slump has made Saudi stocks look relatively attractive, with the benchmark index near the lowest price-to-earnings multiple in more than five years. Junaid Ansari, director of investment strategy and research at Kamco Investment Co, expects a sharp turnaround in sentiment from the fourth quarter, when investors start making allocations for 2026.“The Saudi market is an oversold market,” said Ansari. While foreigners have largely been net buyers, “the sellers are mainly institutions in Saudi Arabia which we believe are selling to focus on other investment opportunities in the Kingdom,” he said.Nevertheless, the weak oil market is weighing down Saudi assets. Brent crude is trading around $66 per barrel, well below the nation’s fiscal breakeven price of $94, according to Bloomberg Economics. If domestic investments by the kingdom’s sovereign wealth fund are included, the figure rises to $111.While foreigners accounted for about 35% of all Saudi stock purchases in August, continuing a strong trend, daily turnover on the market has dropped to the lowest level since 2023. This means that international investors are grabbing a bigger slice of a smaller pie.Still, the gloom over the kingdom’s stocks may be over-hyped, especially as a negative perception of earnings is in large part based on giants, such as Saudi Arabian Oil Company and Saudi Basic Industries Corp.Excluding Aramco and Sabic, Saudi stocks are showing roughly 7% profit growth, Kamco’s Ansari said. Even as the Tadawul index has declined, owners of Saudi National Bank and Saudi Telecom Co shares have seen 11% and 13% returns, respectively, so far this year.“Although earnings growth for 2025 and 2026 is among the lowest across emerging markets, valuations have become more attractive,” said Nenad Dinic, an emerging-markets equity strategist at Bank Julius Baer & Co Ltd.