In what could be a preview of what to expect on Monday, Mideast shares tumbled on Sunday in one of the worst days of 2019.
Israeli stocks plunged nearly 3% in what looks like the largest single-session loss of the year on the heels of Wall Street’s Friday rout.
The Israeli military launched airstrikes against what it said were Quds Force targets in Syria. A spokesman said the strikes were aimed at disrupting operations which had planned drone attacks on targets in northern Israel over the past several days.
“Iran has no immunity anywhere. Our forces operate in every sector against the Iranian aggression”, Benjamin Netanyahu said. “If someone rises up to kill you, kill him first”.
Incidentally, that’s the approach Donald Trump is taking to China on trade, and Beijing is increasingly prone to adopting the same strategy towards the US, although Xi much prefers to retaliate rather than instigate.
The prospect of new tariffs on US oil imports to China sent WTI sharply lower on Friday, but more relevant for the Mideast is the possibility that demand destruction tied to a trade-related global downturn undercuts prices across the board. It’s possible Beijing could eventually decide to ignore Washington’s demands to curtail Iranian crude imports. At least one bank has suggested that Chinese refiners could start tapping Iranian supplies, leading to an “uber-bearish” scenario for oil prices.
Saudi shares fell more than 2% on Sunday to lead Gulf state losses.
As Bloomberg reminds you, “China is the biggest trading partner for Saudi Arabia, the UAE, Kuwait and Oman”.