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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 prices supported by Iran-related risk premium. Oil prices held onto recent gains as heightened tensions involving OPEC member Iran sustained a geopolitical risk premium. Brent traded just below USD69/b and WTI near USD64/b after rising more than 2% over the previous two sessions. The US advised American-flagged vessels to avoid Iranian waters when transiting the Strait of Hormuz, a key chokepoint for global energy shipments, underscoring lingering security concerns despite ongoing US-Iran nuclear talks. Crude has climbed over 10% this year as repeated Middle East flare-ups outweighed fears of a global supply surplus, while sings of near-term market tightness persist, with Brent’s prompt spread remaining in backwardation. Additional support came from US actions against sanctioned oil flows, including the boarding of a Venezuelan-linked tanker, reinforcing uncertainty around supply risks even as traders await fresh market fata and further diplomatic developments.
Gold retreats as investors take profits amid choppy trading. Gold slipped after a two-day advances as investors took profits in a volatile market still stabilising after a historic late-January selloff, with spot prices briefly falling as much as 1.4% before holding just above USD5,000/oz, while silver also declined. Although gold is down about 10% from its January 29 record, it remains firmly higher for the year, supported by persistent drivers such as geopolitical risks, strong central banks demand, and investor caution toward sovereign bonds and currencies official buying remains robust, with the People’s Bank of China extending gold purchases for a 15th consecutive month in January. Attention now turns to upcoming US economic data for signals on monetary policy, particularly after President Trump nominated Kevin Warsh to lead the Fed, with jobs and inflation reports due later this week likely to shape expectations.
MIDDLE EAST - CREDIT TRADING
End of day comment – 09 February 2026. Another mixed day in GCC. Flows were skewed 2:1 sellers:buyers. However if you look at the overall activity its not that selling has increased materially, but rather buyers not being active. And whilst there is certainly the Iran situation hanging over the market, the most likely reason is the primary market activity in both GCC but also EM/DM diverting secondary market buying flows into primary. Spreads are showing 2bp wider on average today. Especially belly bonds are very sticky in light of the UST steepening. Take ADNOCM 34s today getting sold and closing -0.125pt/+3bp. On the other side of the spectrum SHARSK/ SHJGOV is outperforming, especially SHARSK where there were buyers across bonds, closing 31s +0.25pt/-4bp and 36s +0.25pt/-3bp. Away from sovereign and quasis seen bit of weakness in ALDAR hybrids despite good results, 56s closing -0.125pt/+3bp. In terms of primary EBIUH announced a return in the EUR market mandating a 5y green bond, away from this though no new announcements.
MIDDLE EAST - MACRO / MARKETS
Qatar LNG expansion delayed, prolonging tight global gas markets. QatarEnergy has pushed back the start of production at its North Field East LNG expansion to the fourth quarter from an earlier third-quarter target. The delay comes amid widespread setbacks to LNG projects globally, reinforcing tight market conditions as Europe continues to replace Russian gas with LNG. North Field East is the first phase of Qatar’s plan to nearly double LNG export capacity to 142 million tons by 2030, and while the exact reason for the delay is unclear, such slippages are common in large-scale energy projects due to late-stage engineering issues, supply-chain bottlenecks, and cost pressures. With a significant portion of its future LNG supply still uncommitted to long-term buyers, Qatar faces less urgency to accelerate new exports despite strong global demand. Going forward, the delay is likely to have limited economic impact on Qatar but remains supportive of firmer global LNG prices and tighter market conditions until new capacity ramps up.
Saudi Arabia unveils USD2bn investment push to back Syria’s new leadership. Saudi Arabia announced a major investment package in Syria spanning energy, aviation, real estate, telecommunications, and water infrastructure, positioning itself as a key supporter of Syria’s new leadership following the lifting of US sanctions in December. KSA will commit USD2bn through a new Syria-focused investment fund to develop airports in Aleppo, while budget carrier Flynas will partner with the Syrian Civil Aviation Authority to launch a new airline by late 2026. Saudi telecoms giant STC plans to invest over USD 800 million to expand Syria’s fibre-optic network, and agreements were also signed with ACWA Power on water and desalination projects. The investment reinforce Saudi Arabia’s political and economic backing of Syria’s interim government, though scepticism remains over whether memoranda of understanding will translate into binding projects. This builds on KSA’s earlier commitment of USD6.4bn in investments announced in 2025, reinforcing Saudi Arabia’s position as the largest and most concrete foreign investor in Syria’s post-war reconstruction so far.
