Global / BOP, FX

Saudi drone attacks: Implication for assets

Taimur Baig / September 16, 2019
Drone attacks on Saudi oil facilities mark a major setback to the global geopolitical landscape. Developments related to Afghanistan, North Korea, and Iran are adding gloom to the outlook.
Key Summary Points
  • Repairs and stock drawdown would prevent an immediate supply crunch
  • Strikes on Iran by Israel, Saudi Arabia, and/or the US would cause major spikes in global oil prices
  • EMFX would be the immediate casualty, especially those affected by large oil import bills
  • Flight to safety is to be expected, supporting gold and government bonds
  • The most vulnerable asset class could be EM credit, if dollar funding conditions tighten

Saudi drone attacks: Implication for assets

Photo credit: AFP Photo

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