Middle East Daily

Key arguments

• Oil pulled back as continued Hormuz transits and the gradual restart of Saudi Arabia's East-West pipeline eased supply concerns; Saudi Aramco is adding ~20mb of October-November cargoes to Asia after roughly 60mb of recent sales, largely via ship-to-ship transfers outside the strait.
• Security risks remain elevated: another vessel was reportedly struck in Hormuz, and Iran reiterated significant conditions for restarting meaningful talks with the US, keeping the geopolitical risk premium and volatility high.
• Gold is pressured by rising energy-driven inflation, stronger US data (composite PMI 58.4, highest since July 2021), multi-year high Treasury yields (five-year above 5%) and a hawkish Fed, with markets pricing at least three more hikes by April.
• GCC credit weakened as UST 10-year yields rose to 5.08% post-PMI; new SIB 31s closed near 99 from a 100 reoffer, and a USD 2.45bn six-month Gaza recovery plan (66 projects) was unveiled against much larger medium-term needs of about USD 35bn, rising to over USD 70bn longer term.

Corresponding source evidence

1. US Treasury Secretary Scott Bessent said as much as 17mb/d can transit the strait, although estimates vary significantly.
2. Gold held near USD 4,290/oz after falling 1.7% in the previous session, pressured by renewed energy-price gains, stronger US economic data and rising Treasury yields.
3. Meanwhile, the S&P Global US composite PMI rose to 58.4 in September, its highest since July 2021, reinforcing concerns that robust demand could keep inflation elevated. · July 2021