Good morning, friends. It’s another slow morning, led by the fate of our renewables ambitions in the wake of the regional war. We also have an update on when you can see made-in-Saudi Lenovos hit the streets, along with a whole lot of 1Q earnings.

Watch this space

OIL — Goldman Sachs raised its year-end oil price forecast, citing a lasting global supply crunch due to the closure of the Strait of Hormuz. The bank now expects Brent crude to average USD 90 / bbl in 4Q, up from USD 80 / bbl.

Gulf supply losses to drain global inventories: The disruption in Gulf flows is feeding into global balances, with Goldman estimating a 14.5 mn bbl / d hit to Gulf crude production, pushing global inventories down at a record pace of 11-12 mn bbl / d in April. It warned that these “extreme inventory draws are not sustainable” and that a sharper demand slowdown may be required if the supply shock drags on. As a result, the bank forecasts a global deficit of 9.6 mn bbl / d this quarter, compared to last year’s surplus.

MEANWHILE- Gulf recovery pushed into summer: Goldman now expects Gulf oil exports to normalize by end-June, rather than mid-May, and a slower-than-expected production recovery. But the economic spillover will be even more profound due to oil’s knock-on effects — prices, shortages, inflation risks — which could be more damaging than the base-case forecast suggests.

OIL — The US has overtaken Opec as the “swing” energy supplier amid the US-Iran war, using a combination of record-breaking exports, strategic reserve releases, and selective sanction waivers to stabilize the global economy, Reuters’ Energy Columnist Ron Bousso writes. With the Strait of Hormuz closed, Opec has been locked out of its usual role in balancing global supply and demand — around 9 mn bbl / d of Gulf production has been curtailed and spare capacity effectively stranded.

Filling an Opec-shaped hole: The US, now the world’s top producer and a dominant exporter, has stepped in to offset the shortfall. Its crude and refined exports have reached a record 12.9 mn bbl / d, easing shortages — particularly in Asia, where flows have nearly doubled to 2.5 mn bbl / d. The surge has also generated an estimated USD 32 bn windfall for US producers. The US also coordinated a release of 172 mn barrels from its Strategic Petroleum Reserve through 2027.

But it’s not a true Opec stand-in: Unlike Gulf producers, Washington cannot direct output or control spare capacity, as US production is driven by market forces, preventing it from acting as a true manager of global supply.

ECONOMY — Another downgrade to our growth forecast: Economists now see the economy growing at a 2.6% clip this year, down from the 4.3% forecasted just three months ago, according to the latest Reuters poll — conducted between 8 and 24 April. Still, we are faring better than our neighbors, thanks to our stronger position in the crude markets amid ongoing disruptions. Qatar, Kuwait, and Bahrain are expected to shrink, while the UAE stagnates and Oman sees weaker growth.

It’s going to take a while for the GCC to recover, but it will happen: “The GDP-level that will emerge after the war is clearly lower for the next several years, despite a relatively swift recovery… It will take the entire second half of 2026 to rebuild damaged assets and re-establish supply chains,” Ralf Wiegert, head of MENA economics at S&P Global Market Intelligence, said. Economists see Saudi growth coming in at 4.5% next year.

ICYMI- We recently saw two major growth downgrades — the World Bank slashed our growth forecast by 1.2 percentage points to 3.1%, while the IMF revised our forecast down to 3.1% for the year, down 1.4 percentage points from its projection earlier in the year.

DISRUPTION WATCH — Fertilizer bottlenecks are turning into a supply shock: More than half of the Middle East’s urea output may have been lost since the Iran conflict began, as the effective closure of the Strait of Hormuz stalls shipments and leaves product stranded in the Gulf, Bloomberg reports, citing CRU Group estimates of 55-60% halted output.

Why it matters well beyond the Gulf: Roughly 45% of the global urea trade comes from producers with manufacturing sites on the Gulf, supplying key markets including India, Europe, and Brazil. Bloomberg data also showed that 44 fertilizer vessels remain stuck in the Gulf, with almost half carrying urea.

A major GCC fertilizer producer says it’s been navigating the disruption: Fertiglobe CEO Ahmed El Hoshy told The National the company had made “pretty abnormal movements of vessels” and was rerouting cargo from Algeria and Nigeria to Australia, while using higher fertilizer prices to offset added logistics costs. “We’re trying our best to move product out,” he said.

The longer the disruption lasts, the harder the reset may be. CRU warned that producers could face further shutdowns if storage fills up, adding that fertilizer plant restarts “are not a switch,” suggesting that supply strains may outlast any eventual reopening of Hormuz.

FINTECH — The Capital Market Authority wants to widen the scope of what counts as fintech — and tighten the rules for getting a permit. Draft amendments to the Financial Technology Experimental Permit instructions would, if approved, expand the authority’s regulatory scope to include products and services tied to securities activities and capital markets, according to a statement on Tadawul. The CMA launched a 30-day consultation period ending 27 May for capital market participants to weigh in on the proposed amendments.

The proposed updates in a nutshell: In addition to bringing more activities and services under the CMA’s regulatory umbrella, the amendments would enforce a minimum three-month “cooling-off” period for rejected applicants before they’re allowed to apply again for a fintech permit. They would also need to fully address any issues previously identified by the CMA. The amendments also introduce measures designed to increase supervisory efficiency and tighten governance standards across fintechs receiving permits.

M&A Watch— Paramount’s takeover of Warner Bros. awaits FCC approval: Paramount has submitted a request to the Federal Communications Commission to approve the funding structure for its takeover of Warner Bros. Discovery. The filing is necessary to bypass statutory limits on foreign ownership of US broadcasting assets, as foreign entities will own slightly less than 50% of the merged entity. This comes a day after Warner Bros. Discovery shareholders greenlit the merger.

REMEMBER- The merger was reportedly backed by some USD 24 bn in commitments from the Public Investment Fund and other GCC sovereign wealth funds, which are anchoring the capital-intensive takeover.

Sports

The World Snooker Tour canceled the Saudi Arabia Snooker Masters and the World Pool Championship, it said in a statement. The decision followed constructive discussions between the Saudi Billiard and Snooker Federation and Matchroom.

The latest in a broader sports pullback? The cancellation comes amid speculation of a reassessment of Saudi sports spending, including potential changes to funding for major international projects, reports that the PIF is pulling the plug on LIV Golf, and Saudi Arabia stepping back from events such as the Next Gen ATP and WTA Finals.

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The big story abroad

It is a pretty quiet morning on the global front pages, with the latest on the US-Iran negotiations getting top billing.

Where do the peace talks stand? It is unlikely that we’ll see any progress in the talks between the US and Iran anytime soon. US President Donald Trump is reportedly dissatisfied with Iran’s latest proposal, which calls for an end to the US naval blockade, deferring discussions regarding Iran’s nuclear program until after the war is over.

We’ll be waiting to hear from Trump after the White House Press Secretary toldreporters that he will address the matter very soon.

AND- It’s day one of what could be Jerome Powell’s final Fed meeting as Chair. The central bank is widely expected to keep rates unchanged as it looks to limit the impact of the regional war and higher energy prices. It’s a big week for monetary policy, with the central banks of the UK, EU, and Japan set to make rate decisions over the coming days.

Meanwhile, in the world of finance: The value of the fund finance market has balloonedbeyond USD 1 tn, according to a Moody’s Ratings report. The industry is surging as private credit funds multiply and a dealmaking slump forces private equity firms to seek frequent injections of banknotes.