Houthi attacks, Egypt refineries, Qatar’s budget blowout

The step up in attacks in the Strait of Hormuz and by the Houthis against Saudi Arabia suggests that Iran and its proxies are trying to regain the initiative in the war. This raises the risk of a slower recovery in Gulf oil output and even further rises in global energy prices rise in the coming weeks. In Egypt, the government push to expand refining capacity will help to enhance the country’s energy security and reduce the energy import bill. Finally, Qatar’s budget deficit blew out in Q2 but the government can easily afford to finance large budget deficits given its strong net asset position; others in the Gulf have less fiscal headroom.