Saudi Arabia and MENA Conference: Questions for Management

Research evidence excerpt

Saudi Arabia and MENA Conference: Questions for Management

FoundationM

Foreword on Macro & Markets

Matthew Nguyen, Yomna Moheieldin

The Middle Eastern conflict is creating an economic divergence within the region, with

Saudi Arabia emerging as relatively better positioned, helped by its ability to divert a

meaningful share of energy exports to the Red Sea. The UAE is also able to use an

alternate route via Fujairah, but to a lesser extent than Saudi. Meanwhile, the rest of the

oil-exporting GCC faces a steep decline in energy export volumes and revenues, while

Egypt, a net oil importer, is being impacted by higher energy import costs. Within EEMEA

Equity Strategy, we are overweight Saudi and equal-weight the rest of MENA.

Exhibit 1: Saudi Arabia is able to divert a meaningful share of Exhibit 2: ...while Qatar and Bahrain appear among the most

its energy exports to the Red Sea, helping it weather the conflict exposed due to significantly lower exports and limited fiscal

relatively better than the rest of GCC… headroom; meanwhile Kuwait has ample fiscal surplus to

GCC: Current vs Pre-Conflict Energy Exports (mmbpd) cushion the negative impact

10 9.3 GCC: Fiscal Balance vs Energy Exports

9 Oman

8 100

6 5.5 5.3 4.7 90

5 80

S. Arabia 4 2.8 2.6 70 pre-conflict UAE 3 2.0 1.8 of

2 % 60

1 0.5 0.3 0.4 0.1 as 50

40 exports

Bahrain

Qatar Kuwait Pre-Conflict Current Pre-Conflict Current Pre-Conflict Current Pre-Conflict Current Pre-Conflict Current Pre-Conflict Current oil 3020 Current 10 S. Arabia UAE Qatar Kuwait Oman Bahrain

Crude Refined Product LNG

-15 -10 -5 0 5 10 15 20 25 30

2026e Fiscal Balance as % of GDP

Note: Current export volumes reflect Mar-Apr'26 average, while pre-conflict levels refer to Dec'25-Feb'26

average; Source: Vortexa and Morgan Stanley Research