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Can the GCC help de-escalate in Gaza?

An Israeli ground invasion of Gaza remains the likely next step. It is likely to be more devastating than any previous invasion as Hamas will be fighting for its existence and Israel will be less restrained given the extent of the recent atrocities and the extremist bent of its current government. Is there any chance that Gulf countries could help de-escalate the situation? Gulf diplomats are working hard to mediate and minimise the fallout. Qatar, UAE, Saudi Arabia and Bahrain…
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What is the regional impact of the Gaza-Israel war?

Normalisation with Saudi Arabia and a nuclear deal are now likely off the table for some time and risks of terror attacks could remain elevated
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Qatar the mediator

With the completion of the US-Iranian prisoner exchange, Qatar has cemented its role as an international mediator between the US and its political opponents in the region
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Oil, Normalisation & Gambling

Another week in the Middle East with oil prices nudging $100, smouldering hopes of Saudi normalisation and a new gambling law in the UAE
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Biggest drop in Saudi net foreign assets since April 2020

Net foreign assets fell $16bn in July continuing a downward trend for 2023
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PIF cash shakes up global business and sport

PIF has acquired more debt, assets, infrastructure, footballers and foreign businesses in 2023
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Oman repays debt despite lower oil revenue

Oman repaid $4bn of debt in the first half of 2023 despite a narrowing budget surplus

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Tight market will support oil prices

Oil markets have tightened with supply cuts and stronger than expected demand
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Zelensky and Saudi find mutual political gains

Zelesnky back in Saudi to discuss peace plan giving Saudi the opportunity to act as an influential middle power
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Qatar’s emir gassing with Biden

Qatar’s emir meets Joe Biden today with gas supplies and Russia topping the agenda
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Qatar can sell tickets but still needs beds and planes

Can Qatar cope with World Cup demand?
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Qatar set to grow 5% or more in 2022

Qatar set to grow by 5% or more in 2022
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Qatar Booms

A broad range of indicators point to a booming economy in Qatar
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Oman – lowest deficit since 2014 but refinancing still a challenge

Oman – lowest deficit since 2014 but refinancing still a challenge
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Qatar: Game On

Award of $13bn LNG expansion contract shows Qatar is back in the game of investing in its post-blockade future
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Libya looking up?

Unity of the exchange rate is a signal of wider unity and good things to come
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Is Qatar ready for a surge in 2022 fan numbers?

Demand for housing could outstrip supply, but pre-fabricated accommodation offers a solution to enhance fan experience
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State support hinders Egypt’s private sector

State support is preventing Egypt’s private sector from creating jobs, reducing poverty and building financial resilience
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Does the lifting of Qatar’s blockade really matter!?

It helps everyone a little bit, but biggest beneficiary is likely Oman, surprisingly!
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Qatar’s Emir invited to summit in Saudi

Qatar’s Emir has been invited to the Gulf Summit taking place on Tuesday in Saudi Arabia. His attendance is unlikely to be confirmed until the day of the event It is likely that the Emir will need to attend for any progress to be made in the near future towards the resolution of the Gulf rift If he does attend, we are hopeful for an easing of some restrictions – most likely a removal of the airspace blockade On the…
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Historic privatisation of Egyptian military companies

Sale of military-owned companies aims to raise cash and encourage private investment.

The move highlights the prominence of Egypt’s new sovereign wealth fund, the evolving role of the military in the economy and the need for cash from overseas.
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Hopes rise for Saudi-Qatar deal

There are growing expectations of a limited Qatar-Saudi reconciliation, at least on airspace.
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Fakhrizadeh killing could speed lifting of sanctions

The Fakhrizadeh incident should actually increase the urgency for the Biden Administration to restore the JCPOA nuclear agreement
Although this requires Iran to maintain strategic patience in responding to the attack, despite pressure from hardliners in parliament
However, further attacks could spark a cycle of escalation that would make future negotiations more difficult for both the US and Iran
The oil market doesn’t appear to have priced in a particular impact as of yet
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Egypt debt build-up threatens recovery

Background & analysis of Egypt’s debt dynamics & how they are likely to play out – register & subscribe for free to read the full report
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Kushner visit unlikely to herald Qatar breakthrough

A regional visit by Jared Kushner has raised hopes of a breakthrough on the rift, although he is more focused on the Israel normalisation push. The best outcome, still unlikely, is an easing of the airspace blockade by Saudi Arabia. For Saudi Arabia a resolution could help ease tensions with Biden and reunite the GCC in the face of the perceived threat from Iran. The core issue underlying the rift, Qatar’s relations with political Islam, remains very live and it…
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COVID vaccines won’t immunize Gulf economies

Vaccine roll out is likely to be swift in the Gulf thanks to its buying power, government-run health sectors and vaccine deals that are already in place The news is positive for oil production although it will take time to impact demand for oil and inventories with prices only likely to gain material support in H2 next year Fiscal deficits in the Gulf will remain high, double-digits in Oman, Kuwait and sizable in Bahrain and Saudi Arabia The recovery for…
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Oman gets Qatari cash & Saudi deficit eases

Oman has reportedly received a $1bn deposit from Qatar. Oil fell to a five-month low below $38 on Covid worries and revived Libyan production. The Saudi Q3 deficit eased to -$10.9bn on stronger oil and VAT revenue. Major reforms appear to be coming to the Saudi labour market. S&P downgraded RAK & Sharjah, but Moody’s affirmed Abu Dhabi. Qatar’s preliminary Q2 deficit was just -1% of GDP. Moody’s annual review of Qatar praised its Covid response. Kuwait’s undersecretary of finance…
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Oman may issue debt & Libya partly restarts production

Libya reopened some oil fields and export terminals, but less than a third of its capacity. The US asserted UN sanctions had snapped back on Iran, while the UN Sec Gen said no. Iran was a major topic of debate at the virtual UN General Assembly, which included a rare appearance by the Saudi King. Saudi is reopening to pilgrims and has seen a boom in domestic tourism during lockdown. Saudi dissidents formed the National Assembly Party, calling for democratic…
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Bahrain normalises ties with Israel & US upgrades Qatar relations

Bahrain and UAE signed normalisation agreements with Israel in Washington. We do not expect any other Gulf states to follow imminently, for differing reasons. Coronavirus cases are again rising in Oman, following trends in Bahrain and UAE. Hafter said he will lift the blockade on 1m b/d of Libyan oil exports. This comes amidst protests which have caused resignations in both rival governments, and ahead of peace talks next month. The Houthis continue to advance towards Marib, a potential turning…
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Oil drops, Covid cases rise & Bahrain issues

Oil fell to a three-month low of $39 on demand weakness and rising stocks. Coronavirus cases are rising sharply again in Bahrain and UAE. Bahrain issued $2bn at lower yields than a year ago but couldn’t sell a 30yr tranche. Oman is making preparations for a local sukuk and an international bond. Saudi commuted death sentences for Khashoggi killers and Trump said he saved MBS’s “ass”. The Arab League rejected a Palestinian resolution to condemn UAE-Israel normalisation. Qatar published the…
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Dubai issues, Oman approves VAT & more

Dubai issued $2bn in bonds and sukuk and Bahrain started talks with banks about an issuance to take advantage of the sharp fall in yields. The first Israel-UAE flight travelled over Saudi Arabia as normalisation continued. PMIs fell back into contraction in UAE and Saudi as rebounds faded, Qatar’s also dipped. Aramco is reportedly slowing its domestic and international investments. A Kuwaiti newspaper said the government will pass the debt law by decree if parliament doesn’t. Oman’s parliament approved the…
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GULF WEEKLY: UAE-Israel normalisation, Aramco dividend, Oman loan, Bahrain downgrade

● The UAE normalised relations with Israel, linking this to a suspension of annexation plans.● Oil had a flat week as the IEA and OPEC both reduced their demand expectations.● Aramco’s Q2 earnings showed just $6.1bn in free cash flow but it is sticking to its dividend.● Kuwait will hold elections on 28 November and its pressing ahead with plans to cut expats.● Oman secured a $2bn bridge loan until it issues a bond.● Fitch downgraded Bahrain to B+ (Stable)…
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GCC Weekly: PMIs rise with reopenings & Dubai firms junked

PMIs in the GCC have started to recover, Dubai real estate firms have been junked and the UAE has restructured its Federal government
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BAHRAIN: Q1 GDP outturn is worse than it initially looks

BAHRAIN: Q1 GDP outturn is worse than it initially looks
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GCC weekly: Bahrain reserves, Oman downgrade & Hajj curtailed

Bahrain reserves hit record low while Oman is downgraded by Moddy’s and Saudi curtails Hajj
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OMAN: Surprise surplus in Jan-Apr, but don’t get too excited yet

Official statistics show a 1.5% budget surplus but reality is more like an underlying deficit of 6%
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OPEC+ extend cuts, Saudi transferred $40bn to PIF

Oil rallied on OPEC+ cuts, PMIs showed tentative start to recovery & infections fell.
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GCC: Recent Updates & OPEC+ Cuts

Recent updates from the GCC
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Saudi Outage: Every reason to expect more attacks

Full report here Brent oil opened up about $8 in early trading in Asia, one of the sharpest every daily spikes. It now looks like only about a third of the lost 5.7m b/d will come back online by end-Monday. The rest will take weeks. We estimate that there is about another 1.65m b/d in spare capacity at other Saudi field, plus another 0.5m b/d in the mothballed Saudi/Kuwaiti Divided Zone. Ramp up lagtimes will vary considerably. There is every…
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SAUDI: The big oil attack we’ve all been waiting for

Even if output is only offline for 2 days (satellite images look worse than that), this shock will not be positive for Saudi… higher oil prices will not offset the hit to production and higher risk pricing will hit regional assets
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Oman’s governance vacuum threatens fiscal reforms

With the exception of VAT, most of the easy fiscal adjustment has already happened. Further significant and painful reforms are unlikely to be implemented due to the current absence of strong leadership. Alternatives to reform are limited, asset sales are unsustainable and regional support has been patchy, raising questions about Oman’s fiscal position. However, the economy still has good long-term potential as a result of growing gas output and significant opportunities for growing non-oil sectors such as tourism and transhipment….