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 slips as focus shifts to trade talks and OPEC+ meeting. Oil prices declined after a 3% jump on 2 July, with Brent hovering near USD69/b and WTI above USD67/b, as attention turns to US trade negotiations and Sunday’s OPEC+ meeting. President Trump’s announcement of a trade deal with Vietnam, the third such agreement ahead of a 9 July tariff deadline, offered some short-term support, but traders remained cautious ahead of a long US holiday weekend. Expectations are building for another OPEC+ supply hike, which could weigh on sentiment, especially amid concerns of a potential supply glut later this year. In the US, US crude inventories rose for the first time since May, rising by 3.8mb, although Cushing stockpiles continued to drop to their lowest seasonal level since 2014. Despite recent volatility, market signals like the Brent prompt spread suggest underlying strength driven by summer demand.
Chinese gold miners tap Hong Kong amid gold boom. A wave of gold miners is tapping Hong King’s capital markets to raise funds amid a historic gold rally, with over USD700 million raised so far this year and more expected from listing by units of Zijin Mining and Shandong Gold. With gold prices surging over 25% in 2025, hitting a record above USD3,500/oz, miners are capitalising on strong investor demand, attractive margins, and booming M&A opportunities. Companies are using Hong Kong to access funds quickly and pursue overseas acquisitions, particularly in Africa, Central and Southeast Asia, as domestic ore quality declines. China’s support for outward investment and sustained central bank gold buying further boosts momentum. As Western miners look to offload assets, Chinese firms are well-positioned to take advantage, with expectations that gold could reach USD4,000/oz by 2026.
MIDDLE EAST - CREDIT TRADING
End of day comment – 02 July 2025. Mixed day. IG sovereign continued to grind tighter. Again the cash bid in ADGB and QATAR was very sticky, especially in the long end. The steepening of the UST curve tightened spreads another 1/3bp led by QATAR 49s closing unch/-3bp and ADGB 70s unch/-3bp. Higher beta had a bit a wobble though, especially in belly bonds, OMAN 28s closing -0.125pt/+4bp, MOROC 33s -0.25pt/+2bp on some midday risk off flows. Quasi sovereign underperformed sovereign bonds as well, ADNOCM, MASDAR and QPETRO were mostly sold with the sector closing on average +1/2bp. Fins had mixed flows, seen sellers in QNBK and newly issued MAALRA 30s and QIBKQD 30s, but the market took it down and closed mostly unchanged. In corps DPWDU still had buyers led by 35s outperforming other names, 35s closing +0.125pt/-4bp. In the primary market QATIQD priced 500mm of T2 PNC6 bonds at 6.15% in yield with a reported orderbook over 2bn, there still seems appetite for yield. Flows were definitely more mixed today, with macro markets showing some weakness mid-day selling intensified, but overall the bid prevailed especially in long end IG bonds, for now the steepening in UST and other DM government bonds means tighter spreads in duration. NFP next tomorrow.
MIDDLE EAST - MACRO / MARKETS
Gulf crude exports surge in June despite geopolitical risks. Crude and condensate exports from key Gulf producers – Saudi Arabia, the UAE, Qatar, and Iran, surged in June, reaching multi-month highs despite widespread GPS interference and maritime threats in the Strait of Hormuz. UAE shipments jumped to 3.74mb/d, the highest since November, with gains across most Gulf terminals and rising flows to Japan and India. Qatar’s exports rose to a 12-month high of 883k b/d, fuelled by increased deliveries to China. Saudi Arabia led the region, boosting exports to 6.36mb/d, the most since March 2024, as it ramps up output under OPEC+’s planned supply hikes. Iran’s preliminary exports hit 1.79mb/d, despite tracking challenges due to signal spoofing and tanker obfuscation. The rise in Gulf exports comes amid a shift in OPEC+ strategy, with members like Saudi Arabia and the UAE aggressively reclaiming market share ahead of another expected quota increase in August.
Qatar’s economy grows 3.7% y/y in Q1 2025, driven by strong non-hydrocarbon expansion. Qatar’s real GDP grew by 3.7% y/y in Q1 2025 from 6.1% y/y in Q4 2024, reaching QAR181.5bn, supported by a 5.3% expansion in the non-hydrocarbon sector, which now contributes 63.6% of real GDP. Growth was broad-based, led by wholesale and retail trade, real estate, and manufacturing, reflecting Qatar’s continued progress toward economic diversification under the Third National Development Strategy and Qatar National Vision 2030. Despite global volatility, hydrocarbon activities also posted 1% growth, underscoring the economy’s resilience. The new GDP methodology, aligned with international standards, reinforces Qatar’s commitment to accurate measurement and transparent reporting.
