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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 holds firm as Black Sea flows resume and Iran risks linger. Oil prices steadied as markets balanced the resumption of operations at a key Black Sea export terminal against renewed geopolitical risks linked to Iran. Brent traded below USD66/b and WTI near USD61/b after last week’s sharp rally, as the Caspian Pipeline Consortium restored an offshore mooring, easing concerns over Kazakhstan’s crude exports. At the same time, President Trump’s renewed threats toward Iran and the deployment of US naval assets in the Middle East added a risk premium, prompting hedge funds to raise bullish positions to their highest level since August. While prices have advanced early this year despite expectations of a global supply glut, traders are also monitoring weather-related disruptions in the US, where freezing conditions have curtailed some refining operations and lifted natural gas demand.
Gold breaks USD5,000 as geopolitical turmoil and currency fears supercharge haven demand. Gold surged beyond USD5,000/oz for the first time, extending a powerful rally driven by escalating geopolitical tensions, a weakening dollar, and growing investor distrust in sovereign bonds and currencies. Gold climbed more than 2% to above USD5,085/oz, while silver also jumped to fresh record highs above USD100/oz, supported by strong global retail demand. Recent US policy action, including renewed attacks on the Fed, threats of sweeping trade tariffs, geopolitical brinkmanship, and signs of stress in major bond markets such as Japan, have reinforced gold’s role as a barometer of market fear. Expectations that the next US Fed chair could adopt a more dovish stance, alongside swelling public debt in advanced economies, have further strengthened the appeal of non-yielding precious metals as a store of value.
MIDDLE EAST - CREDIT TRADING
End of day comment – 23 January 2026. Mixed day to close out the week. It started strong, UST rallied overnight and the market was buyer of long end bonds off the gate. But the more the day went on, the more selling we saw. Especially higher beta names like SHARSK/SHJGOV or OMAN came off the highs. What outperformed was ADGB, especially long end bonds held in closing 54s +0.375pt/-3bp. Qatar had sellers into higher bids and closed +0.125pt/unch in 50s. Oman was at one stage +0.625pt/-4bp in long end before closing unch/unch with some afternoon selling across the curve. On the new issue front new MASRAF 31s was well received with trades in the 100.25/375 range from 100 reoffer, however activity there was rather on the low side. What also still has a good bid is new DHAENE 53s with early morning buying around the 102.00 level and holding its level in the afternoon risk off mood closing +0.25pt/-2bp.
MIDDLE EAST - MACRO / MARKETS
KSA postpones 2029 Asian winter games amid Neom consultation challenges. Saudi Arabia and the Olympic Council of Asia have agreed to postpone the 2029 Asian Winter Games, originally planned to be held at the Trojan desert a ski resort within the Neom mega project, in a setback to the kingdom’s ambitions to position itself as a global sports and events hub. The decision follows extensive consultations, as the project has faced construction delays and technical challenges, including building at high attitudes, complex terrain and creating sufficient artificial snow. The postponement comes as Saudi Arabia reassesses spending priorities amid lower oil prices and broader challenges across Neom, though authorities said the Kingdom will continue to host other winder spots events and major global gatherings, including the World Expo in 2030 and the FIFA World Cup in 2034. Furthermore, Saudi Arabia is set to significantly downscale and redesign its flagship Neom projects as a year-long review nears completion, reflecting a shift toward a more pragmatic and financially discipline approach after delays and cost overruns. The flagship development, including The Line, is being scaled back into a more modest concept, with greater emphasis on industrial uses such as data centres aligned with the Kingdom’s push to become a global AI hub as KSA tightens spending and priorities financial sustainability.
Libya strikes major energy deal to more than double Waha oil output. Libya has signed a landmark agreement with TotalEnergies and ConocoPHillips to more than double production capacity at the Waha Oil venture, lifting output to about 850,000b/a from roughly 350,000, with investments expected to reach up to USD20bn over 25 years. The deal, signed in Tripoli during the Libya Energy and Economic Summit, includes the development of four new oil fields and a broad exploration program across 19 concession areas, signalling renewed international interest in Libya’s vast, low-cost petroleum resources after years of disruption following the 2011 civil war. Authorities estimate the project could generate more than USD376bn in revenues over its lifetime, while additional agreements signed at the summit, including With Egypt, highlight Libya’s efforts to revive its energy sector and boost supply to a global oil market increasingly facing surplus conditions, despite ongoing political risks.
