THIS MORNING: Opec+ output sinks 20% in March as Saudi, Iraq flows drop

Good morning, friends. The good news is: the ceasefire is continuing to hold, though ongoing drone attacks on Bahrain are sparking concerns that some proxies in the war are not giving up.

On the Hormuz front, the US military said it will begin blocking all maritime traffic entering and leaving Iranian ports as of yesterday, as US forces also began setting conditions for mine clearance in Hormuz over the weekend. US warships are reportedly already moving through the waterway as part of their operation and the military says it’s working to secure safe passage for commercial shipping. We have more on this in today’s big story, below.

WEATHER- Rain, rinse, repeat: Most of the Kingdom is in for moderate to heavy thunderstorms, rain, and strong winds today, with the most intense activity expected over Asir, Jazan, and Makkah.

• Riyadh: 29°C high / 19°C low;
• Jeddah: 34°C high / 22°C low;
• Makkah: 35°C high / 23°C low;
• Dammam: 30°C high / 19°C low.

Watch this space

OIL — Opec+ output slipped nearly 20% in March: Opec+ crude output averaged 35.06 mn bbl / d in March, down 7.7 mn bbl / d m-o-m — nearly 20% — with Iraq and Saudi Arabia seeing the largest declines, as flows remain constrained, according to its latest monthly oil report (pdf). Iraq output fell 61% m-o-m to 1.63 mn bbl / d, while Saudi production dropped 23% to 7.8 mn bbl / d.

Cutting the quarter, keeping the year intact: The group cut its forecast for global oil demand in the second quarter by 500k bbl / d to average 105.07 mn bbl / d. Still, the 2026 demand growth forecast was left unchanged at 1.38 mn bbl /d.

That leaves the market reading conflicting signals: While demand expectations are easing on paper, actual supply remains tight due to logistics and geopolitics rather than deliberate cuts. At the same time, planned Opec+ output boosts of 206k bbl / d for May — with Saudi Arabia alone contributing 62k bbl / d — risk being largely nominal as key nations remain unable to raise production amid the US-Iran conflict, adding another mismatch between paper balances and market realities.

LOGISTICS — Saudi crude flows to China are being cut in half next month, with the Kingdom set to ship some 20 mn barrels to its biggest buyer in May, down from roughly 40 mn barrels allocated for April, Bloomberg reports, citing traders.

IN CONTEXT- Aramco hiked Asia-bound Arab Light crude by USD 17 / bbl for May deliveries, bringing the total premium to an unprecedented USD 19.50 over the Oman-Dubai benchmark, while also limiting Asian refiners to Arab Light loadings only via Red Sea ports.

China started leaning on inventories instead of paying up, giving state refiners the green light to tap commercial crude stockpiles, with analysts estimating drawdowns of up to 1 mn bbl / d through April-June.

ECONOMY — The GCC’s real GDP grew 5.2% y-o-y in 3Q 2025 to USD 474 bn , according to the latest data from the GCC Statistical Centre (pdf). Meanwhile, nominal GDP — which is not adjusted for inflation — grew 2.2%.

Growth was broad-based across the bloc: All GCC economies recorded positive real GDP growth during the quarter, with the UAE leading the pack with 6.8% growth. It was followed by Saudi Arabia and Kuwait at 4.8% each, Bahrain at 4.0%, Qatar at 2.9%, and Oman at 2.0%.

Diversification is advancing — but oil remains key: While hydrocarbons remain the cornerstone of the regional economy — accounting for 22.0% of nominal GDP — non-oil sectors are assuming an increasingly prominent role in the output structure. Manufacturing contributed 12.4%, followed by wholesale and retail trade at 9.7%, and construction at 8.4%. Other key contributors included public administration and defense (7.5%), financial and ins. activities (7.0%), and real estate (5.8%).

REMEMBER- The GCC is very likely to see growth slashed this year due to the repercussions of the war, with Oxford Economics forecasting 2.6% growth, down 1.8 percentage points from its earlier forecast, citing “lower oil production, exports, tourism, and domestic demand.”

DEBT — Pakistan turns to Saudi Arabia, China to repay UAE loan: Pakistan is in talks with Saudi Arabia and China to secure more than USD 3.5 bn in loans and investments to cover a USD 3 bn repayment due to the UAE, Bloomberg reports, citing people familiar with the matter.

Pakistan’s bind: The move comes after Islamabad failed to roll over the loan for the first time in seven years, leaving it with a month-end repayment deadline and adding pressure on foreign exchange reserves of about USD 16 bn — enough for roughly three months of imports. The UAE reportedly pushed for a short rollover of under a year, which Pakistan rejected.

Why KSA and China? The Kingdom has been stepping up engagement with Pakistan lately, including the recent delivery of Pakistani fighter jets under our mutual defense pact and an agreement to set up an economic cooperation framework in October. Meanwhile, China remains Pakistan’s largest creditor, with over USD 25 bn in debt and ongoing Belt and Road-linked financing.

Data point

SAR 12.6 bn — that’s where expatriate remittances in the Kingdom stood in February, down 2% y-o-y to a 15-month low, the Saudi Gazette reported, citing data from the Saudi Central Bank. On a monthly basis, expat remittances dropped 6% (SAR 768 mn) from January. Remittances by Saudis abroad also declined 22% y-o-y to SAR 4.86 bn during the month.

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The big story abroad

Goldman Sachs has made headlines today after its financial results for 1Q beat expectations. The US investment bank’s bottomline rose 19% y-o-y to USD 5.6 bn — driven by strong dealmaking and record-setting equities revenues. That said, the firm's fixed income revenue dropped 10% to USD 4 bn, missing StreetAccount’s estimates set by a substantial USD 910 mn. The company attributed the slump to significantly lower returns in interest rate products, mortgages, and credit.

Also on Wall Street: Asset management giant BlackRock has upgraded its forecast for US equities, citing the limited broader impact of the conflict in Iran as key drivers for a positive market outlook. The firm raised its outlook from a notch to overweight from neutral, arguing that there is "tangible evidence of actions” that will lead to a resumption of traffic through the Strait of Hormuz. BlackRock singled out earnings in the tech sector as especially likely to shield stateside equities from fallout of the regional war.