Gulf markets are expected to be shaky after European Union agreed to ban Iran oil and new threats from the producer to block the Strait of Hormuz.

Some Iranians also warned they might strike US targets worldwide if Washington used force to break any Iranian blockade of the strategically vital shipping route.

Mr Abdul Kadir Hussain CEO and fund manager at Mashreq Capital said that "While you might get some knee-jerk reaction in the short term, you have to watch out for the sustained impact on energy prices. At this point, people are still thinking that it will not get heated to the point of oil supply disruption. There will be geopolitical premium but hopefully that would dissipate over the next few weeks."

Delays in Greece debt restructuring could also weigh on sentiment after Euro zone finance ministers on Monday rejected help offer made by private bondholders, sending negotiators back to the drawing board.

The euro retreated from a three week high on Tuesday while Asian shares edged higher. National Bank of Oman will be in focus after the lender's Q4 results missed analyst’s forecasts. The bank proposed a cash dividend of 17.5%.

(Sourced from Reuters)