Europe, Middle East and Africa Emerging Markets Weekly

Research evidence excerpt

Europe, Middle East and Africa Emerging Markets Weekly

kiye’s natural gas is bought on Brent crude oil-indexed gbolahan.taiwo@jpmorgan.com

J.P. Morgan Securities plc

contracts priced off a trailing average of crude. When oil prices fall, the direct oil

Francesco Arcangeli

part of the bill adjusts quickly, but the natural gas part reprices with a lag. Therefore,

(44-20) 3493-0971

near-term relief remains limited since the high oil prices of early 2026 will, in our francesco.arcangeli@jpmorgan.com

view, have a more pronounced impact on the energy import bill in 4Q26, even after J.P. Morgan Securities plc

spot prices have fallen. Our impulse response estimates put this into perspective: Fatih Akcelik

a $10 move in Brent leads to a $6bn deterioration in the energy trade balance, (44 20) 3493 7285

consistent with our previous findings. The key insight, however, is the timing. fatih.akcelik@jpmorgan.com

While part of the effect is felt immediately, a portion comes through with a lag of J.P. Morgan Securities plc

around 6-9 months. This is why we expect the recent oil decline to deliver limited Irshaad Mayet

relief in 2026, with the fuller benefit materialising in 2027. (27-11) 507-0418

irshaad.mayet@jpmorgan.com

JPMorgan Chase Bank, N.A., Johannesburg

Israel: Manufacturing returns in style Branch

Manufacturing output bounced 29.8%m/m, sa, in April, following a 17.5% drop Khamza Sharifzoda

in March amid the Iran war. The level of manufacturing output in April was 7% (44 20) 3493-3571

khamza.sharifzoda@jpmorgan.com

above February. Part of this improvement, which was fairly broad-based across J.P. Morgan Securities plc

industries, was likely just compensation for reduced output in previous (war)

month. However, the bigger picture is that Israeli tech industries have done very