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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 pauses after rally as Venezuela blockade offsets oversupply concerns. Oil prices steadied after a four-day rally as the US continued its blockade of Venezuelan crude shipments, helping offset broader concerns about oversupply and weak demand. Brent traded near UD62/b after gaining about 5% over the previous sessions, while WTI hovered around USD58/b, as US seized two tankers and pursued a third to intensify pressure on the Maduro government. Although Venezuelan exports account for less than 1% of global supply, heightened geopolitical risks, including disruption linked to Ukraine and ongoing shutdowns at a key Caspian Pipeline Consortium mooring in the black sea, have helped put a floor under prices. Despite the recent gains, oil remains down about 17% this year and is on track for its largest annual decline since 2020 as rising global supply continues to outpace subdued demand.
Gold and silver surge to record highs on rate cut bets and haven demand. Gold rose to a fresh record high for the 50th time this year, climbing to just below USD4,500/oz, as escalating geopolitical tensions and expectations of further US interest rate cuts fuelled demand for safe-haven assets, with silver also setting an all-time peak. The rally has been underpinned by strong central-bank buying, sustained inflows into gold-backed ETFs, and investor concerns over currency debasement amid rising global debt, pushing gold up about 70% this year toward its best annual performance since 1979. Geopolitical risks, particularly surrounding US actions against Venezuela, have further boosted gold’s appeal, while silver has outperformed with gains of roughly 140% amid speculative inflows, lingering supply tightness, and uncertainty over potential US trade restrictions, reinforcing expectations that the previous metals rally could extend into next year.
MIDDLE EAST - MACRO / MARKETS
IMF reached staff-level deal with Egypt, paving way for fresh funding. The IMF said it has reached a staff-level agreement with Egypt on the combined fifth and sixth reviews of its Extended Fund Facility, a move that could unlock around USD2.5bn in additional disbursements once approved by the IMF’s executive board, alongside a separate agreement under the Resilience and Sustainability Facility that may provide a further USD1.3bn. The IMF combined the two programme reviews to give Egyptian authorities more time to meet key reform benchmarks under the expanded USD8bn, 46-month loan agreed in March 2024, when the country was struggling with soaring inflation and severe foreign currency shortages. Since then, Egypt has made notable stabilisation gains, with annual urban inflation easing to 12.3% in November from a peak of 38% in September 2023, and FX pressures moderating amid IMF support, record tourism revenues, rising remittances, and large investment inflows from Gulf partners. While the IMF acknowledged signs of robust economic growth and improved macroeconomic conditions, it emphasised that structural reforms must accelerate, particularly the divestment of state-owned assets and efforts to reduce the state’s role in the economy, areas where progress has so far lagged despite recent legislative amendments aimed at speeding up assets sales.
SAMA cuts and caps banking fees to boost consumer protection and financial inclusion. The Saudi Central Bank (SAMA) has introduced a new Fees Guide for Financial Institutions’ Services, replacing the existing Banking Tariff and significantly reducing and capping customer fees across banking, financing, and payment services as part of its efforts to enhance transparency, fairness, and consumer protection. The guide, which will take effect within 60 days, applies to all institutions under SAMA’s supervision, including banks and payment companies, and encourages greater use of digital channels to support financial inclusion and sector efficiency. Key changes include halving the cap on administrative fees for non-real estate financing products, lowering Mada card, check, standing order, and electronic transfer fees, and eliminating charges for several account documents when accessed electronically. Alongside the fees overhaul, SAMA also issued updated implementing regulations for the Finance Companies Control Law to strengthen oversight of financing activities, licensing requirements, and related-party provisions. Together, these measures amid to reinforce confidence in Saudi Arabia’s financial system while supporting digital adoption and sustainable sector growth.
Morocco plans electricity tariff overhaul to spur renewable and market reform. Morocco plans to overhaul its electricity tariff system starting in 2027 to encourage investment in renewable energy in the near term and pave the way for greater competition and a formal wholesale power market over the longer run, according to the country’s electricity regulator, ANRE. The regulator has launched a tender for technical assistance to comprehensively review electricity tariffs, a process that will also see ANRE revamped into a broader National Energy Regulatory Authority overseeing multiple energy sectors, though no timeline has been set for a full wholesale electricity market, with state-owned ONEE remaining the dominant buyer in Morocco’s largely regulated power market.
