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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 rises as US tightens grip on Venezuelan crude sales. Oil prices edged higher as markets assessed fresh steps by the US to exert control over Venezuela’s oil industry, even as broader supply concerns capped gains. Brent traded above USD60/b and WTI hovered near USD56/b after two days of sharp losses, with traders digesting plans by US to manage future Venezuelan crude sales and seize additional sanctioned tankers. Energy Secretary Chris Wright said the US will oversee sales of future supply, while PDVSA confirmed talks with US under a framework similar to Chevron’s existing license. President Trump has signalled support for US firms to rebuild Venezuela’s neglected energy sector and said Venezuela would relinquish up to 50mb for sale, with proceeds held in US Treasury accounts. Oil prices remain under pressure after last year’s steepest annual decline since 2020, with ample global supply from OPEC+ and others, even as the US continues its naval blockade and enforcement actions.
Copper retreats from record as profit-taking hits industrial metals. Copper prices slid from a record high as traders locked in profits following a rapid rally, dragging other industrial metals lower amid signs the surge may have run ahead of fundamentals. Futures for copper, nickel, and zinc fell more than 2% on the London Metal Exchange, trimming gains driven by heavy investment flows into China’s domestic metals markets. While long-term prospects for copper remain bullish, the pace of the rally, up more than 40% last year, the strongest since 2009, has raised the risk of sharp pullbacks as profit-taking sets in. Despite potential production cuts and regulatory risks in Indonesia, years of rising output have left global nickel inventories elevated, with LME stockpiling posting their largest increase in six years, reinforcing concerns that oversupply could cap prices despite the broader metals bull market.
MIDDLE EAST - CREDIT TRADING
End of day comment – 07 January 2026. The market is closing wider, but with the lack of cash price weakness it feels stronger than spread moves suggest. The one area of weakness though was OMAN long end bonds which closed -0.375pt/+8bp. The pricing of new KSA 56s might have sent a reminder how tight OMAN has traded, all said the belly remains supported and only is 1/2bp wider on the day. IG names saw again selling of ETFs in the long end, but quote requests now feel a bit repetitive with the same bonds hanging over the market, so bidders are in no rush to bid up with UST moves. Long end ADGB closed around +0.125pt/+5bp with 54s and 70s offered. QATAR again less active but also about +0.125pt/+5bp with some 46s and 48s changing hands. On the new issue front EBIUH had a good reception of the 5y tranche with steady buying pushing it +0.375pt higher (-3bp) before seeing some sellers and closed 100.30/100.40. Tomorrow will have FABUH with a 750mm 5y priced at T+60bp and ALDAR 30.25NC7.25 hybrid 1bn priced at 5.95% trading in the secondary.
MIDDLE EAST - MACRO / MARKETS
Turkey returns to global markets with successful Eurobond issuance. Turkey launched its first major international bond sale of 2026 on January 7, raising around USD3.5bn through a dual-tranche Eurobond issuance, marking a strong start to the year in global capital markets. The transaction comprised USD2bn of 2033-maturity notes priced at roughly 6.35% and USD1.5bn of 2038-maturity bonds priced near 6.9%, both of which were pried tighter than initial guidance. The successful placement highlights renewed investor appetite for emerging market sovereign debt, benefiting from improved risk sentiment early in the year, and underscores Turkey’s ability to re-assess international funding markets at competitive terms after a period of heighted volatility. Also, the deal comes amid heavy early-year issuance across emerging markets, with Israel raising USD6bn, Saudi Arabia USD11.5bn, and Hungary EUR3bn. Turkey, which last issued USD2.25bn in October 2025, plans to borrow USD13bn internationally in 2026 while replaying around USD20bn in external debt. The successful issuance helps strengthen external financing buffers, supports budget funding amid large refinancing needs, and signals improved investor confidence, potentially easing pressure on funding costs and market sentient in the near term.
Bahrain’s GDP growth accelerates in Q3 2025 on broad-based expansion. Bahrain recorded a 4.0% y/y increase in real GDP in Q3 2025, marking a clear acceleration from earlier quarters and signalling strengthening economic momentum. Growth was broad-based, with the non-oil sector expanding by around 3.1%, supported by solid performance in financial and insurance activities, real estate, and transportation, underscoring ongoing diversification efforts. The oil sector also contributed positively, rising sharply on a y/y base, helping lift overall growth. The Q3 outcome points to a more balanced economic recovery, with both oil and non-oil activities supporting output, and provides a firmer macroeconomic backdrop heading into late 2025 and early 2026. Going forward, GDP growth is expected to moderate to around 2.8% in 2025, before strengthening toward roughly 3.2% in 2026.
