GULF WEEKLY: Saudi deficit rises, Bahrain downgraded again, Iran war concerns grow
A skimmable summary overlaid with our analysis and links. Headlines:
* Brent crude touched $73 despite expectations that OPEC+ will hike output for April.
* Expectations of US strikes on Iran rose further, to 63% by end-March, adding to the oil risk premium.
* The third round of US-Iran nuclear talks, mediated by Oman, did not produce a breakthrough.
* The USS Gerald Ford reached Israel, along with fighter jets, while embassy families departed.
* US tariffs on the GCC are unchanged, but renewed uncertainty is indirectly negative for the region.
* The GCC launched FTA negotiations with India, building on the CEPAs with the UAE and Oman.
* Gulf funds could be on the hook for large investments in Warner Bros, supporting Paramount’s bid.
* The Saudi deficit of 5.8% of GDP was larger than estimated and the highest since 2020.
* The UAE is being upgraded from the JPM emerging market bond indexes in phases from April.
* Abu Dhabi issued $3bn in bonds across 5- and 10-year tranches with low spreads.
* Qatar awarded the main EPC contract for its 16m t/yr North Field West LNG project.
* The IMF sees large deficits in Kuwait persisting through 2031, when debt reaches 36% of GDP.
* Gulf states rallied around Kuwait in opposition to maritime border maps submitted by Iraq to the UN.
* Fitch downgraded Bahrain to B; even with recent reforms, it sees a -10% of GDP deficit in 2027.
* The IMF Board approved its reviews of Egypt and will release $2.3bn in funding.
* Polling shows that, for the first time, Americans sympathize more with Palestinians than Israelis.
* Databank updates: Saudi fiscal; forecasts for Kuwait (IMF), Bahrain (Fitch) and GCC (ESCWA).
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