Saudi Aramco shares hit new low amid Middle East turmoil

Edmund Heaphy
Finance and news reporter
Shares in state-owned oil company Saudi Aramco plumbed new lows on Monday Photo: AP Photo/Amr Nabil/file photo

Shares in Saudi Aramco have fallen to their lowest level since the state-owned oil giant’s historic $25.6bn flotation last month, as traders assessed the implications of the US killing of Iran’s most prominent military general.

A decline of more than 1% on Monday means that shares in the company are now down by more than 10% from the highs they reached in the days after they began trading.

At 34.50 riyals, the shares remain above the 32 riyal (£6.5) flotation price. But the declines mean that the company is now valued well below the $2tn (£1.5tn) figure long desired by crown prince Mohammed bin Salman.

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The US killing of Qassem Soleimani, a high-ranking Iranian general, has prompted a wave of backlash, and investors now fear that his death could draw the region into broader conflict.

Iran has vowed “severe revenge” and has said it will “settle a score with the US,” while Soleimani’s replacement has pledged to remove the US from the Middle East.

Saudi Arabia is both a key ally of the US and a major rival of Iran — two facts that have sparked fears that the country’s oil infrastructure could be targeted by Iran.

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In September, Iran is thought to have struck Saudi Aramco infrastructure in a drone strike, something that severely dented output from the country.

Oil prices jumped by more than 15% in the aftermath of that attack, but the gains were swiftly erased.

President Donald Trump has threatened severe sanctions, and warned that he is prepared to strike more than 50 sites “in a disproportionate manner” if Iran retaliates.

Thousands of Iranians took to the streets to mourn Soleimani’s death on Sunday.

While the price of oil continues to climb amid concerns about the stability of supply from the region, Saudi Aramco shares are reasonably insulated from the conflict — many of them are held by government institutions and regional investors, who are less likely to sell.