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 after four-day rally as Iran tensions dominate market focus. Oil steadied near recent highs after its biggest four-day, with Brent crude around USD65/b and WTI just below USD61/b, as markets weighed escalating unrest in Iran and an upcoming White House meeting to discuss possible US response. President Trump has publicly encouraged continued protests against Iran’s leadership and said he would “act accordingly”, while Energy Secretary Chris Wright suggested potential US commercial partnerships should the regime fall, remarks that have underscored geopolitical risk premiums in prices. The rally comes after a period of losses driven by expectations of a supply glut, with unrest in both Iran and Venezuela reinserting risk into markets. On the supply side, reports of rising US crude inventories and logistical disruptions to exports from Kazakhstan add complexity to the outlook, highlighting how geopolitical developments and fundamental data are jointly shaping oil price momentum.
Silver breaks above USD90/oz from weaker US inflation and geopolitical risks. Silver soared above USD90/oz for the first time ever and gold climbed toward record levels as softer than expected US inflation data reinforced expectations of Fed rate cuts, boosting demand for safe haven asset amid continued geopolitical uncertainty. Silver advanced as much as 3.6%, while gold traded near historic highs, with soft US price pressures helping underpin markets’ anticipation of easier monetary policy later in the year. Persistent tensions, including political pressure on the Fed and geopolitical flashpoints, have lent further support to precious metals, with some possibility that silver and gold could reach new milestones in the coming months. Markets are also watching a US section 232 investigation that could lead to tariffs on silver, potentially tightening available inventories.
MIDDLE EAST - CREDIT TRADING
End of day comment – 13 January 2026. A constructive day overall but flows remain mixed. What continued to bounce today were long end bonds after yesterday's afternoon turn led by a strong bid in ADGB long end. 54s closed +0.375pt/-4bp. What also continued to bounce was OMAN were long end bonds closed +0.25pt/-3bp today. The belly still has two way interest most likely on the back of the ENEDEV new issue announcement which will be a 10y sukuk. Away from this new issues remained again the centre of trading activity. New DHAENE continues to be well bid closing 100.875/101.25 (+0.25pt/-4bp). Also seen continued two way interest in new FABUH 31s which trades though in a very tight range today mostly between 100/100.05. New EBIUH 31s is starting to move higher with very little offer side liquidity closing 100.375/100.625 (+0.125pt/-3bp). Away from ENEDEV GCC didn't see any new issue announcement, but clearly the expectation is for more issuance to come, so secondary will remain primary market driven for now.
MIDDLE EAST - MACRO / MARKETS
Turkey’s current account swings back into deficit in November. Turkey recorded a current account deficit of USD4bn in November, reversing surplus seen over previous four months and coming in wider than market expectations of around USD3.1bn. the deterioration was driven by a USD6.4bn goods trade deficit, only partly offset by a USD 3.9bn surplus in services, underscoring the continued importance of tourism and services exports. Excluding gold and energy, however, the core current account remained in surplus at USD2.1bn, indicating resilience in underlying external balances. Over January-November, the cumulative current account deficit reached USD18.5bn, with a large goods deficit largely counterbalanced by a strong services surplus, a dynamic closely watched by economists as a gauge of external financing pressures and macroeconomic stability.
MNA region growth prospects amid global uncertainty. The World Bank’s Global Economic Prospects highlights a resilient but uneven global recovery, with the Middle East, North Africa, Afghanistan and Pakistan (MNA) region, within which the GCC is a key growth engine, benefiting from easing global inflation, improving financial conditions, and still solid domestic demand, while facing headwinds from elevated trade barriers, policy uncertainty, and softer global growth. Regional growth is projected to strengthen in 2025 to 2027, supported by higher activity in energy exports, notably GCC economies as oil production normalises and large-scale investment programs continue, alongside a pickup in non-oil sectors and stronger investment. However, the outlook remains exposed to downside risks from weaker global trade, lower oil prices as supply rises and demand cools, geopolitical tensions, and climate related shocks. To sustain momentum and job creation, the report stresses the importance of diversifying beyond hydrocarbons, strengthening fiscal frameworks, improving the business environment, and mobilising private capital for infrastructure, energy transition, and digital transformation, all of which are central to GCC led regional growth strategy.
