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Saudi Arabia has opened its stock market to all foreign investors, a landmark move under its Vision 2030 plan to liberalize the economy and reduce its dependence on oil revenue.

Previously, direct access to the Saudi Exchange, or Tadawul, was restricted to qualified institutional investors selected by authorities. As of February 1, that has changed. Smaller institutions, funds, family offices, and individual investors are now permitted to participate directly, without needing to use swap arrangements or exchange-traded funds.

The market has responded positively. The Tadawul All-Share Index has climbed approximately 10% since the Capital Market Authority (CMA) announced the reform on January 6, reversing a downtrend from the previous ten weeks. Mohanad Yakout, a senior market analyst at Scope Markets, noted that the jump shows investors view the policy as a "meaningful catalyst for revising up the market's valuation."

Vision 2030: The Strategy Behind the Market Opening

The Tadawul is the largest and most liquid stock market in the Middle East, with a capitalization of 8.8 trillion Saudi riyals ($2.35 trillion) at the end of 2025. Foreign stock ownership had already increased by 92 billion riyals to 590 billion riyals in the first three quarters of 2025.

Several benchmark index companies already have significant foreign investment.

• Al-Babtain Power & Telecom: 33.8% foreign-held

• Edarat Group: 24.6% foreign-held

• Etihad Etisalat: 23.74% foreign-held

While the 49% cap on foreign ownership in any single listed company remains in place, Yakout believes this liberalization intensifies "competition for regional financial primacy with the Emirati markets that have historically benefited from more permissive foreign ownership regimes."

This market opening is part of a broader national transformation. Over the past decade, Saudi Arabia has worked to soften its image by easing regulations, opening cinemas, and introducing tourist visas. It has also successfully bid for major global events like the FIFA World Cup 2034 and World Expo 2030. In January, a new law was implemented allowing non-Muslim foreigners to own property.

The push for economic diversification comes as the government faces pressure from lower oil prices. It more than doubled its 2025 budget deficit forecast to 5.3% of GDP and expects a deficit of 165 billion riyals, or 3.3% of GDP, for this year. This fiscal pressure is widely seen as a key driver for economic reforms.

Investing in Saudi Arabia: Weighing the Risks

Despite the opportunities, analysts caution that investing in the Saudi market carries significant risks, primarily because many of its largest companies are closely tied to the state.

Popular listings with Asian investors—including Saudi Aramco, Saudi Basic Industries, Al Rajhi Bank, and ACWA Power—offer growth at a reasonable price. However, these companies operate in strategic sectors like energy, chemicals, banking, and utilities, which are subject to intense government control.

Figure 1: State-owned giants like oil producer Saudi Aramco, which went public in 2019, are cornerstones of the Tadawul exchange but also pose unique risks for investors due to significant government influence.

"Competition is limited, government involvement is high, and decision-making reflects longer-term strategic priorities rather than short-term shareholder returns," said Alice Gower, a partner at Azure Strategy.

Other risks cited by analysts include the economy's heavy reliance on oil prices and a perceived lack of robust shareholder protections.

The Case for Investing: Scale, Liquidity, and Stability

While risks exist, the sheer scale and liquidity of the Saudi market help mitigate them, particularly for long-term investors. In contrast, Dubai's stock market may offer higher potential returns but also comes with greater cyclical risk tied to real estate, retail flows, and shifting investor sentiment. This leads investors to adopt a more tactical approach in Dubai.

Saudi Arabia also offers a stable investment environment in other ways.

• No Formal Capital Controls: Foreign investors can generally repatriate capital and profits without restriction.

• Currency Stability: The Saudi riyal is pegged to the U.S. dollar, anchoring the exchange rate.

• Free Currency Conversion: Investors can convert currency freely.

These factors boost investor confidence. However, Pratibha Thaker, editorial director at the Economist Intelligence Unit, pointed out that "indirect constraints remain in the form of foreign ownership limits, sectoral restrictions and administrative frictions, which can still shape investment decisions and limit control-seeking strategies."

What's Next for the Saudi Market?

With the Vision 2030 agenda in full swing, some experts expect further liberalization. The most significant potential change on the horizon involves the foreign ownership cap.

"The biggest needle mover will be any changes to foreign ownership caps, which is considered a possible move later this year," said Gower. Such a reform could unlock another wave of foreign capital and further integrate the Tadawul into the global financial system.

China's foreign ministry has expressed regret over the expiration of the New START treaty, the landmark nuclear arms agreement between the United States and Russia. Beijing is now urging Washington to resume strategic dialogue with Moscow to maintain global stability.

The treaty, which for over half a century placed limits on the strategic nuclear arsenals of both nations, officially lapsed on Wednesday. In response, Russia stated it remains open to security discussions but will counter any emerging threats.

Beijing Voices Concern Over Global Nuclear Order

Foreign ministry spokesperson Lin Jian articulated China's position, describing the treaty's expiration as a regrettable development with serious implications.

"China regrets the expiration of the New START Treaty, as the treaty is of great significance to maintaining global strategic stability," Lin stated. He noted widespread international concern that the treaty's end could negatively impact the global nuclear arms control framework.

Following Russia's proposal to continue observing the treaty's core limitations, China has called on the United States to engage constructively.

"China calls on the United States to respond positively, handle the treaty's follow-up arrangements responsibly, and resume strategic stability dialogue with Russia as soon as possible," Lin added, emphasizing that this reflects the expectations of the international community.

China's Stance on Its Own Nuclear Arsenal

The foreign ministry also took the opportunity to reiterate China's established nuclear policy. Lin emphasized that China adheres strictly to a self-defense strategy and maintains its nuclear forces at the minimum level required for national security.

"China has consistently adhered to a self-defense nuclear strategy, abided by the policy of no first use of nuclear weapons and has made unconditional commitments not to use or threaten to use nuclear weapons against non-nuclear-weapon states or nuclear-weapon-free zones," he explained.

Lin also addressed China's role in future arms control negotiations, stating that its arsenal is not comparable in size to those of Washington and Moscow. Citing this disparity, he confirmed that China will not participate in their bilateral disarmament talks at this stage.

Meanwhile, the White House indicated this week that President Donald Trump would determine the future of U.S. nuclear arms control policy and would "clarify on his own timeline."

Oil prices fell more than $1 a barrel on Thursday as the United States and Iran confirmed plans to hold talks, easing market fears of a military conflict that could disrupt critical Middle East supplies.

Brent crude futures dropped $1.31, or 1.89%, to trade at $68.15 per barrel by 0714 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude prices declined $1.24, or 1.90%, to $63.90.

Diplomatic Thaw Reverses Geopolitical Risk Premium

The price drop marks a sharp reversal from Wednesday, when oil surged about 3% following a media report that the planned talks might collapse. Later, officials from both nations confirmed the meeting would proceed on Friday in Oman, though the agenda remains unsettled.

"The oil price has erased part of the geopolitical risk premium on the news of US-Iran talks," said Mukesh Sahdev, CEO of energy consultancy XAnalysts.

Deep Divisions Cloud Negotiation Outlook

Despite the agreement to meet, significant disagreements persist. Iran has indicated it is open to discussing its nuclear program with Western powers. However, the U.S. aims to include a broader range of issues, including Iran's ballistic missiles, its support for regional proxy groups, and its domestic human rights record.

The wide gap between their positions suggests that market relief could be temporary. "It is likely that these talks will surface new differences and the risk premium will rise again soon," Sahdev noted.

Strait of Hormuz: A Critical Chokepoint for Global Oil

Underlying the market's sensitivity is the continued risk of a wider confrontation. Concerns remain that U.S. President Donald Trump could act on threats to strike Iran, the fourth-largest producer within OPEC.

Such a conflict could jeopardize transit through the Strait of Hormuz, a vital chokepoint between Oman and Iran. Approximately one-fifth of the world's total oil consumption passes through this waterway. Major OPEC producers, including Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, rely on the strait to export most of their crude oil.

Broader Market Pressures and US Inventory Data

Other market factors also contributed to the downward pressure on oil. Analysts noted that strength in the U.S. dollar and volatility in precious metals weighed on commodity markets and overall risk sentiment on Thursday.

Separately, data from the Energy Information Administration on Wednesday showed that oil inventories in the United States, the world's largest oil producer and consumer, declined last week after a winter storm swept across large parts of the country.

Rate Hold Reflects Cautious Monetary Stance

Inflation Above Target Limits Policy Flexibility

Balancing Growth Support And Price Stability

Political And Economic Context

Source: AP

Russia has signaled it sees no significant danger to its oil exports from a new trade agreement between the United States and India. The deal, finalized earlier this week, involves Washington lowering tariffs on Indian goods while New Delhi commits to buying more American oil and gas.

Despite the pact being widely interpreted as a move to squeeze Russian energy flows, Moscow maintains that its position in the Indian market is secure.

Kremlin: India's Diversified Sourcing is Nothing New

Kremlin spokesman Dmitry Peskov told reporters that Moscow is not surprised by the development, framing it as standard practice for New Delhi.

"We, along with all other international energy experts, are well aware that Russia is not the only supplier of oil and petroleum products to India," Peskov said. "India has always purchased these products from other countries. Therefore, we see nothing new here."

The Technical Barrier: US Shale vs. Russian Urals

Beyond diplomatic confidence, Russia points to a key technical challenge for India. An expert from Russia's National Energy Security Fund highlighted the fundamental difference between the types of crude involved.

American exports consist of light shale oil, which is similar to gas condensate. In contrast, Russia primarily supplies Urals crude, a heavier and more sulfur-rich grade. This incompatibility means a simple one-for-one substitution is not feasible.

"India will need to blend U.S. crude with other grades, which incurs additional costs, meaning a simple substitution won't be possible," the expert explained.

Shifting Dynamics in a Key Export Market

Despite Moscow's assurances, the deal arrives as Russia's dominant position in the Indian market faces new pressures. For nearly four years, Russia has been India's single largest oil supplier, with its crude accounting for approximately one-third of the country's total imports—a dramatic increase from just 2% before 2022.

However, this trend has already started to shift. Indian refiners recently scaled back their purchases of Russian crude following the imposition of U.S. sanctions on major Russian oil companies Rosneft and Lukoil.

India's Search for Oil Alternatives

In response to the sanctions, Indian refiners have halted imports from the targeted entities and are now sourcing oil from non-sanctioned Russian suppliers as well as alternative cargoes. Key sources now include the Middle East, the Americas, and, to a lesser extent, West Africa, with purchasing decisions driven by price.

Analysts suggest the new trade pact with the U.S. could further broaden India's options. The deal may open access to oil from Venezuela and possibly even Iran as New Delhi looks to diversify its energy suppliers and reduce its reliance on Russian crude.

A Strategic Shift Toward Coordinated Mineral Policy

FORGE And The Architecture Of A Trade Block

Targeting Concentration Risks And Market Practices

Price Floors And Tariffs As Policy Tools

Source: CNBC