GULF WEEKLY: Aramco sells pipelines, US-UAE arms deal approved, Kuwaiti former PM detained
A skimmable summary overlaid with our analysis and links. Headlines:
* The IMF sees the fiscal breakevens improving relative to 2019 in all bar Kuwait and Bahrain.
* It forecasts a surprisingly wide range of oil and non-oil recoveries across the region.
* Israeli sabotage overshadowed US-Iran nuclear talks but is not expected to wreck them.
* Aramco sold a 49% stake in its oil pipelines for $12.4bn, likely to be refinanced with bonds.
* Houthi missile and drone strikes on Saudi Arabia targeted oil facilities in Jubail and Jazan.
* Adnoc is considering IPOs of its drilling and fertilizer businesses. Tristar withdrew its IPO in Dubai.
* The US is moving ahead with a $23bn arms sale to the UAE, despite Congressional opposition.
* Qatari stocks were boosted by plans to permit 100% foreign ownership of listed companies.
* Kuwait’s parliamentary crisis continued and, separately, a former prime minister was detained on corruption charges.
* Oman expects to overcome its Covax-related vaccine shortages in the next few months.
* Bahrain’s FX reserves rose for a second month to reach 2-months of import coverage.
* Fitch and Capital Intelligence both affirmed Bahrain (at B+ and BB-, respectively).
Cross-cutting themes
* The IMF published its Regional Economic Outlook:
The report is always worth reading, although most of the analysis is necessarily generic or more focused on poorer countries in the Middle East and Central Asian region. It includes a section on debt and financing legacy risks from the pandemic. In the launch press briefing, regional director Jihad Azour said that the UAE’s central bank’s support package was appropriate and made some comments on Qatar. He was questioned more on Arab countries which look to IMF financing, including Jordan, Morocco and Egypt.
* Oil
Monthly oil market reports were released by the IEA and OPEC and both revised up demand, after cuts last month. OPEC lifted 2021 average demand by 100k b/d on expectations of strong global economic growth of 5.4%, while the IEA hiked by 230k b/d, though still -3% below the 2019 level. Both organizations trimmed their expectations for non-OPEC output (WSJ).
* Iran
JCPOA talks resumed in Vienna on Thursday after a week’s pause (Rt). The US has yet to specify which sanctions it will lift as part of a compliance agreement: it has over 1,500 sanctions on Iran, many of which it argues are not nuclear-related, and clarifying the scope of sanctions-lifting may be more important than sequencing the return to compliance (BB, Mon).
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