Saudi Aramco shares have tumbled 10% from their peak levels less than a month after IPO, wiping more than $200bn off the company's market value as the US killing of Iran's most senior military commander reverberated through Middle Eastern markets.
Last week the US ordered a drone strike which killed Iran's most powerful general Qassem Soleimani and caused crude oil futures to briefly top $70 over fears of supply issues. However, Saudi Aramco did not benefit because of investors' concerns about its proximity to the Middle East.
Investors are worried that Iran, which counts Saudi Arabia among its regional foes, could target the company's production facilities or its computer networks in retaliation for the killing of Soleimani.
2020 will continue to be a year of high geopolitical tensions"
"Investors who were hoping for lower geopolitical tension in the Middle East and North Africa in 2020 got their hopes dashed on the second day of the year," said Mohammed Ali Yasin, chief strategy officer at Abu Dhabi-based Al Dhabi Capital Ltd. "2020 will continue to be a year of high geopolitical tensions."
The Sept. 14 strikes had targeted the Abqaiq and Khurais plants at the heart of Saudi Arabia's oil industry, temporarily shutting down 5.7 million barrels per day (bpd) of output - more than 5% of global oil supply.
Saudi Aramco shares have been trending lower since the days after the company pulled off the biggest IPO in history in December. The latest price valued the company at $1.82trn, down from a peak of $2.06trn on Dec 12.
Gulf stocks were in the red on Wednesday amid escalating tensions between the United States and Iran.