Interpreting Middle East Economic News and Analyzing Market Trends

Category: Oman

Macroeconomic Outlook for Kuwait and the GCC

I was invited to speak at the IFN Forum Kuwait, which was held in Kuwait on October 19, 2015.  I gave a presentation on my outlook for Kuwait and the rest of the GCC countries in light of the 60%+ fall in the price of oil over the past year.

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The vanishing petrodollar and its implications on financial markets

 
Petrodollar

Image Source: The Daily Reckoning

It didn’t take long for the effects of falling oils prices to catch up with the global economy.  We’ve reported in the past how falling oil prices will expose the ‘shale revolution’ myth, and we are now starting to see shale companies file for bankruptcy (expect this trend to accelerate through the summer).  Now, however, we are starting to see the effects of vanishing petrodollars from the global financial system. The acceleration of this trend alone can spark another financial crisis.

   

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Worldwide youth unemployment stuck at record levels, outlook for the Middle East is especially poor

Youth Unemployment Global

Click on map for a large image

We reported last year on the terrible outlook for youth unemployment around the world (read the story here).  The map above is an update on this global problem.  The situation is particularly bank for the Middle East and Southern Europe.  The are no indications that this problem will go away any time soon.

 

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Tensions heat up in the Gulf as UAE, Saudi Arabia and Bahrain recall their ambassadors from Qatar

GCC Meeting in Riyadh March 2014

The smiles are for the camera only!

Tensions are once again heating up in the Gulf.  This time Bahrain, Saudi Arabia and the UAE are ganging up on the Qatar.  Rising tension is not new, what is new is the fact that other GCC members are tired of Qatar stepping out of line and not following the prescribed protocol.

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China is hooked on Mideast oil, which helps build a good case for a Petroyaun

China Oil Transit Routes 2013Source: Zerohedge (click on map to view larger size)

Last year China became the world’s largest oil importer, surpassing the U.S. for the first time.  The U.S. reliance on imported oil has been declining ever since shale oil production began to rise in 2008.  We remain skeptical on the long-term viability of U.S. shale production, but that’s a different story.  You can see our posts on the subject here and here.  Going back to China, what does this mean for Middle East exporters?

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