Ceasefire holding, negotiations ongoing

The ceasefire between the US/Israel and Iran has largely held over the past week and there are growing hopes that it will be extended as talks continue to end the war. It’s unclear if, and how, the US blockade of the Strait of Hormuz will shift Iran’s negotiating stance, but the regime is clearly now in a worse position than it was when oil exports were flowing. Meanwhile, the past week has brought more evidence of the hit to the Gulf economies from the war, with oil production falling sharply and non-hydrocarbon sectors struggling. In Dubai, for now at least, we don’t think this will lead to debt servicing problems among the Emirate’s government-related entities.