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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 stabilises after three-day slide amid sanctions and supply signals. Oil prices steadied after a three-session decline, with Brent trading just above USD64/b and WTI near USD60/b, as markets weighed western sanctions on major Russian crude producers and mixed US inventory data showing a nationwide draw but rising stocks at Cushing. Prices remain under pressure heading toward a third monthly drop, driven by expectations of a global surplus as OPEC+ prepares to raise output at its upcoming meeting. Traders are also closely monitoring US-China trade progress and a Fed decision, with policymakers widely expected to deliver a 25bps rate cut. Sanctions targeting Rosneft and Lukoil have added uncertainty, with officials aiming to make Russian exports costlier without triggering price spikes, while refiners in Asia reassess purchases of discounted cargoes. In refined products, tightening to their highest level in over 20 months, highlighting shifting pressures across fuel markets.
Gold holds steady ahead of expected Fed rate cut. Gold steadied near USD3,950/oz after a three-day slide of more than 4%, as bargain hunters returned ahead of a widely anticipated 25bps Fed rate cut. Gold has pulled back sharply from last week’s record above USD4,380/oz, with easing haven demand following signs of US-China trade progress and technical indicators pointing to an overheated rally. Despite the correction, gold remains up about 50% YTD, supported by strong central-bank buying and investor hedging against fiscal risks. Still, sentiment has softened somewhat, with gold-backed ETFs seeing USD1bn of outflows from SPDR Gold Shares on Monday and overall holdings posting the biggest drop in six months. The market’s outlook remains broadly bullish.
MIDDLE EAST - MACRO / MARKETS
Saudi investment strategy shifts toward private-sector-led growth. Saudi Arabia signalled a new phase in its economic transformation as senior government officials urged the Public Investment Fund (PIF) to scale back its direct spending on domestic megaprojects and instead create more space for private sector investment to drive growth. According to remarks reported yesterday, the fund is preparing an updated strategy that will prioritise crowding in private capital, reducing reliance on sovereign financing, and strengthening market-based development models. This shift aligns with longer-term goals under Vision 2030 to build a more competitive and diversified economy, while helping ensure that large-scale initiatives are financially sustainable. The refocus is also intended to enhance investor participation, expand partnership opportunities, and support deeper capital-market activity as the Kingdom advances the next stage of its economic transformation.
Qatar plans new sukuk sale to support debt management and market development. Qatar plans to issue Islamic bonds within the next two to three weeks, joining the regional peers such as Saudi Arabia and Bahrain in tapping strong demand for Sharia-compliant debt. Finance Minister Ali Al-Kuwari said the move is not driven by funding needs, but rather by efforts to broaden the sovereign yield curve and enhance debt management. Qatar retains a strong Aa2 credit rating and has issued only USD5.5bn in Eurobonds since 2020 as high LNG revenues improved its fiscal position. The country has halved its debt-to-GDP ratio from about 70% in 2020 to just under 35%, while aiming for 4% average non-hydrocarbon growth over the next five years by investing in tourism, logistics, and technology. However, Qatar will remain heavily reliant on LNG, with non-energy GDP expected to fall from 60% today to around 50% by 2030 as major new gas-expansion projects ramp up and boost its share of global LNG supply to around 25% by 2030.
UK unlocks GBP6.4bn in UK-Gulf trade and investment to boost growth. The UK secured a GBP6.4bn package of two-way trade, export finance and investment agreements during a high-level economic mission to Saudi Arabia, including up to GBP5bn in UK Export Finance support for British suppliers on Saudi projects and new private sector commitments, and Saudi investors in areas like cybersecurity and digital banking. The visit marked the largest UK delegation ever to the Future Investment Initiatives and follows a GBP4.1bn deal package announced at the recent UK-Saudi Great Future Summit, bringing total bilateral deals to more than GBP10bn in under 18 months. UK officials emphasised that deepening economic ties with Gulf partners will increase trade by 16%, add GBP1.6bn annually to UK GDP and contribute GBP600 million to wage growth, while supporting thousands of UK jobs and strengthening the UK’s reputation as a stable investment destination with opportunities across infrastructure, decarbonisation, technology, and finance.
Aramco eyes minority stake in PIF’s AI firm Humain. Saudi Arabia’s PIF and Aramco signed a preliminary agreement for Aramco to take a significant minority stake in PIF-owned Humain, combining AI assets and talent to scale the company’s growth while positioning the Kingdom as a global leader in advanced data and AI technology.
