Gulf shares slump after OPEC fails to agree virus action plan

Dubai: Shares in the energy-dependent Gulf plunged to multi-year lows Sunday after OPEC's failure to agree on a coronavirus action plan prompted fears of an all-out oil price war. OPEC and its allies failed to clinch a deal on production cuts that would have offered support to energy markets, sending prices tumbling to four-year lows on Friday.

The OPEC+ meeting was expected to agree to deeper cuts of 1.5 million barrels per day to counter the effects of the novel coronavirus, but Moscow refused to tighten supply.

Fears of a price war were stoked as Saudi Arabia -- the world's top exporter -- quickly responded by making significant cuts to its oil price. All the seven bourses in the Gulf were in the red amid a panic sell-off over fears that energy prices, the mainstay of public revenues in the region, could collapse.

The Saudi stock market, the largest in the region, dived by 8.3 per cent at close on Sunday, the first day of the trading week. It was the lowest closing since November 2017. Shares in oil giant Saudi Aramco dropped below their IPO price of 32 riyals ($8.5) for the first time, losing some 9.1 per cent to 30.00 riyals. The world's biggest company launched on the bourse in December in a record-breaking initial public offering, but since then its market value has slipped from the IPO value of $1.71 trillion to $1.6 trillion.