Saudi State Oil Giant’s Shares Drop: Report

The state oil giant Saudi Aramco led the financial losses, dropping by 10% on Riyadh's Tadawul stock exchange and forcing a halt to Aramco's trading.

Tadawul remained open, but Boursa Kuwait shut down within 30 minutes of opening Monday as stocks again dropped by 10%, the third such emergency halt to trading in recent days.

The drop came as global oil prices suffered their worst losses since the start of the 1991 (Persian) Gulf War. Other Mideast markets fell as well as the new coronavirus has affected global energy prices and OPEC failed to make a production cut deal with Russia last week.

Earlier Monday, coronavirus concerns led Saudi Arabia to cut off air and sea travel with Bahrain, Egypt, Iraq, Italy, Kuwait, Lebanon, South Korea, Syria and the United Arab Emirates. The kingdom had earlier closed off its land borders as well.

“Out of concern to protect the health of citizens and residents and ensure their safety, the kingdom’s government decided to temporarily suspend the travel,” it said in a statement attributed to an unnamed Interior Ministry official.

Worldwide, there are over 110,000 confirmed cases of the new coronavirus with more than 3,600 deaths attributed to it.

The new virus has caused major economic disruptions, including in global aviation, which has helped slow demand for oil. An OPEC meeting with Russia last week failed to see countries agree to a production cut. In response, Saudi Arabia has warned it will increase its production and slash its own prices to claw back market share.

That sent oil prices into a free fall, losing some 25% of their value. Mideast stock markets followed suit.

The Tadawul fell over 9%, with investors particularly selling their stock in Saudi Aramco, formally known as the Saudi Arabian Oil Co. The stock closed at 27 riyals a share ($7.19), giving the company a valuation of $1.4 trillion. The company had reached $2 trillion in early days of trading in December.