Asia and the Gulf: Strengthened financial links in cross-lender lending and investment could freeze if the war does not end soon

No one has a crystal ball for where the war in Iran goes. While there is hope that the conflict can end in certain form, it is hard for investors not to prepare for and price in some of the worst-case scenarios in mind. For Asia, the connection may not be limited to the widely discussed shocks in energy and supply chains. As more countries in the Middle East, especially the Gulf Cooperation Council (GCC) , have been pushing for economic diversification and the green transition, Asia is playing a bigger role as investor and lender. In this report, we analyze the financial links between Asia and...

Euribor 2027年12月限りのロング（または OIS 2年先1年フォワードのレシーバー）を推奨

Gulf countries’ huge reserves explain their resilience to the huge shock

Since the effective closure of Strait of Hormuz, oil tanker traffic through this gateway has fallen sharply, creating not only a global shortage but also export halt for gulf countries. Kuwait, Qatar and Bahrain are most impacted with over 90% exposure to the Strait. Saudi Arabia and UAE are more shielded thanks to pipelines rerouting to Yanbu by the Red Sea and Fujairah by the Oman Bay.After exports are blocked, gulf countries have subsequently shut in their energy infrastructure as storage facilities are running out. Bahrain and Qatar have closed virtually all the production lines and Kuwait...