To read the full report, please download the PDF above.
Middle East Daily
SOOJIN KIM
Research Analyst
DIFC Branch – Dubai
T: +44(4)387 5031
E: soojin.kim@ae.mufg.jp
MUFG Bank, Ltd. and MUFG Securities plc
A member of MUFG, a global financial group
Middle East Daily
COMMODITIES / ENERGY
Oil holds in narrow range ahead of OPEC+ meeting and supply concerns. Oil prices edged higher but remained stuck within a narrow trading band, with Brent approaching USD69/b and WTI near USD65/b, as traders awaited fresh drivers ahead of this weekend’s OPEC+ meeting. The group is widely expected to keep October output steady, even as concerns of a surplus weigh on sentiment following earlier supply increases. Markets are also focused on Russian crude flows amid US pressure on India to curb imports, though India rejected the US’s initiative during a meeting between Prime Minister Modi and President Putin. Treasury Secretary Bessent signalled possible new sanctions this week, but expectations of tighter measures have eased. With Brent largely stuck between USD65-70/b in recent weeks and down about 8% YTD, investors remain cautious, balancing supply glut fears against geopolitical risks and Ukrainian attacks on Russian oil facilities that are preventing sharper declines.
Gold hits record high on Fed cut expectations and rising policy uncertainty. Gold surged to a record high of USD3,508/oz today, extending a rally fuelled by expectations of imminent Fed rate cuts and mounting concerns over the central bank’s independence. The precious metal has climbed more than 30% this year and along with silver, has more than doubled in value over the past three years as investors seek safe haven assets amid persistent geopolitical, economic, and trade risks. The latest upswing followed Fed Chair Powell’s signal that rates may be lowered this month, with upcoming US job data expected to reinforce the case for easing. Gold, which last hit a record in April on tariff concerns, continues to benefit from safe haven demand, with silver and other critical minerals also drawing increased investor interest.
MIDDLE EAST - CREDIT TRADING
End of day comment – 01 September 2025. As expected a quiet labour day. Only saw a handful of requests in this half London day afternoon. The morning saw mostly dealers squaring positions. The only credit which was active with accounts was again Qatar. Saw a couple of EM dedicated accounts selling as it seems some residual index positions are left and hitting the market. That said it again failed to move prices. In fact, the 10Y area was well bid with QATAR 34s squeezing +0.25pt/-6bp. Other than this though, prices broadly unchanged across credits and with the UST future moves spreads look -1/-2bp on the day. On the primary side FABUH announced a new mandate for a 5Y Low Carbon Energy Bond. Timing and pricing/IPT still to be announced. The market is well prepared to take new issuance, so would expect more announcements from tomorrow onwards.
MIDDLE EAST - MACRO / MARKETS
Turkey’s Q2 GDP growth surpasses expectations with 4.8% expansion. Turkey’s economy expanded by 4.8% y/y in Q2 2025, surpassing expectations and highlighting the resilience of certain sectors despite ongoing macroeconomic headwinds. Growth was largely driven by strong performance in construction and information technology, which helped offset weaker agricultural output, while q/q GDP rose by 1.6%, underscoring positive momentum compared to earlier in the year. The expansion reflects a combination of robust domestic demand, selective government support measures, and the impact of earlier investment flows, even as high interest rates and persistent inflation continue to weigh on consumer purchasing power. This better than forecast result supports a cautiously optimistic outlook for the remainder of 2025, though structural vulnerabilities, including reliance on external financing and currency volatility, remain important constraints on Turkey’s medium-term growth trajectory. Going forward, sustaining growth will depend on balancing tighter monetary policy with measures that support investment and exports, while ensuring financial stability in the face of global and domestic uncertainties.
Syria resumes oil exports after 14-year hiatus. Syria exported its first official crude oil shipment in 14 years, sending 600,000 barrels of heavy crude from Tartus port under a newly arranged export deal. The move, enabled by lifting of US sanctions in July, marks an important step in re-engaging with global energy markets and restoring a revenue stream that was once central to the economy before production collapsed during the conflict. Alongside, Syria signed an USD800 million agreement with Dubai-based DP World to expand Tartus into a multi-purpose terminal, underscoring efforts to rebuild trade infrastructure. Renewed exports could provide vital foreign currency inflows, ease pressure on the Syrian pound, and help narrow fiscal and currency account deficits, though the impact will remain limited in the short term given damaged infrastructure, reduced production capacity, and lingering investor caution. Looking ahead, Syria’s ability to scale up production, diversify trade partnerships, and pursue credible economic reforms will be critical in determining whether this milestone evolves into sustainable recovery and long-term stability.
