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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 slips as supply glut concerns outweigh Russia sanctions. Oil prices edged lower, with Brent dipping below USD64/b and WTI near USD59/b, as traders weighed the impact of a growing global surplus against US sanctions that are disrupting Russian crude flows. Russia’s flagship grade has fallen to its weakest level in over two years ahead of sanctions targeting Rosneft and Lukoil. Expectations of a record oil glut in 2026, driven by revived by OPEC+ supply and rising non-OPEC output such as Canada’s expanding oil sands production, continue to pressure the outlook. Geopolitical risks offer some support, including Sudan-related export disruptions and Iran’s tanker seizure near the Strait of Hormuz, while markets also monitor escalating US pressure on Venezuela. Meanwhile, Saudi Crown Prince Mohammed bin Salman is set to meet President Trump in Washington, where the US has signalled plans to sell F-35 jets to the kingdom as both countries look to deepen ties.
Gold falls for fourth day as rate cut hopes fade. Gold extended its decline for a fourth consecutive day, sliding toward USD4,015/oz as expectations for a December US rate cut weakened and a firmer dollar added pressure. Markets scaled back bets to below a 50% change of a reduction after several Fed officials signalled caution, even as Governor Christopher Waller voiced support, while investors await delayed economic data following the six-week government shutdown. Despite the pullback, gold remains up more than 50% this year, driven by fiscal concerns and heavy central bank buying, including as estimated 64 tons purchased in September, with China accounting for 15 tons. Traders are also watching the legal dispute between Fed Governor Lisa Cook and the Trump administration ahead of a Supreme Court hearing in January.
MIDDLE EAST - CREDIT TRADING
End of day comment – 17 November 2025. The market feels a bit frozen overall. Secondary market flows are still on the light side, buyers and sellers are balanced. However technicals are strong and everyone seems to want to buy and sell the same thing. On top of it new issues still getting announced, today in Sharjah (SHARSK) for a 10.5y sukuk which keeps most of RM and locals on the fence. What has a good bid are still long end bonds in general, we haven't seen a 30y deal in ages indeed and with little selling in this maturity bucket spreads are holding well, DUGB 50s was bid today for example closing +0.375pt/-2bp. What is for sale though are new issues and in general 5/10y bonds where the market has seen all the supply of the last months and in this maturity bucket the street has little interest to bid. Marking a variety of fins and quasis from 2028 to 2035 maturities about 0.125pt lower and 1/2bp wider. Today there were also some sellers of very short end bonds in 2026/2027s maturities. Whilst the bid there is strong it is also indicative of selling outstanding short end to get into new issues/ raise cash. Overall the market again feels weaker than the spread moves suggest. Next will be the data deluge and Nvidia earnings.
MIDDLE EAST - MACRO / MARKETS
IMF mission signals early economic recovery and reform momentum in Syria. The IMF completed a November 10-13 mission to Damascus, noting that Syria’s economy is beginning to recover as sanctions ease, investors’ confidence improves, and more than one million refugees return. Discussions cantered on the 2026 budget, where the government aims to create fiscal space for essential services while relying on realistic revenue and financing assumptions. The IMF will provide extensive technical assistance to strengthen public financial management, finalise new tax legislation, and develop a strategy for legacy debt, stressing the need for a simple and competitive tax regime and strong governance as state-owned enterprises are restructured. The mission also initiated work on building a modern monetary policy framework, including new financial sector laws, rehabilitation of the banking and payment systems, and rebuilding capacity at the central bank. Given the severe lack of reliable economic data, the IMF will expand support to improve national accounts, prices, balance of payments, and fiscal statistics, as essential step toward resuming Article IV consultations, suspended since 2009.
Turkey’s widening budget deficits in 2025. Turkey’s fiscal position continued to deteriorate in 2025, with the central government budget deficit reaching TRY223.2bn (USD5.33bn) in October, up nearly 20% from a year earlier, and the cumulative January-October deficit widening to USD34.3bn. Despite primary surplus, indicating that revenues exceeded non-interest expenditures, however, soaring interest payments of USD43.4bn, up more than 70% y/y, kept the headline deficit elevated. Expenditures grew faster than inflation, driven by personnel costs, current transfers, and investment spending. Under the medium-term program, Turkey expects the full-year deficit to reach USD50.1bn (3.6% of GDP), underscoring lingering fiscal pressures amid high inflation, a weak currency, and substantial debt-servicing costs.
