GULF WEEKLY: Houthis capture Bab al-Mandeb, Saudi oil production falls, Qatar’s deficit spikes and Fitch applies a negative outlook
A skimmable summary overlaid with our analysis and links. Headlines:
* US-Iran clashes intensified, including the US sinking or disabling 8 Iranian tankers and Iran striking several tankers and other vessels.
* The Houthis made a dramatic advance, capturing the west coast of Yemen to the Bab al-Mandeb Strait and Red Sea islands.
* The Houthis also launched attacks on Saudi Arabia, injuring civilians, damaging a refinery and possibly the East-West Pipeline.
* Oil touched a four-month high of $109 on Thursday, but eased slightly after reports of a potential GCC-Iran meeting in Oman next week.
* Saudi oil production fell by -23% m/m in August as a result of Houthi disruptions in the Red Sea. Conversely, Iraq’s output rose 24%.
* Saudi GDP declined by -4.7% y/y in Q2, dragged down by oil (-28%), refining (-13%) and trade & hospitality (-2%).
* Humain is contemplating an IPO by 2029 and is seeking to raise $33bn to finance data centers.
* PIF may merge its Savvy Games unit into Electronic Arts. Meanwhile, LIV Golf has filed for bankruptcy.
* S&P affirmed the UAE and revised up its growth forecast to 2.4% (led by Abu Dhabi at 4.3% thanks to the OPEC exit).
* The UAE is reportedly revising its ambitious data center plans to mitigate the risk of attack, including a more distributed model.
* Algeria cut diplomatic ties with the UAE without fully explaining the move, potentially linked to its long-running dispute with Morocco.
* Qatar’s fiscal deficit surged to -11% of GDP in Q2, even as capex was cut in half, because direct hydrocarbon revenue fell to nearly zero.
* Fitch placed Qatar on a negative outlook, resolving its RWN from March, and forecasts a -7% of GDP deficit this year.
* QatarEnergy is looking to contract US LNG for up to five years to meet some of the needs of its customers.
* Kuwait’s official reserves slipped by a further -6% in August.
* Oman’s inflation picked up to 3.4% in August, led by food (7%) and transport (8.5%).
* The UK, France, Canada and nine others recommitted to the two-state solution and banned imports from Israeli settlements.
* Databank updates: Saudi GDP, Qatar fiscal, Qatar tourism, Oman inflation, Saudi manufacturing. UAE and Qatar forecasts.
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