The Israeli Iranian War, No Winner or Loser

Abdullah Al Alami

June 24, 2025

 

Saudi Crown Prince Mohammed bin Salman recently discussed with Gulf states leaders the repercussions of the Israeli attack on Iran. This is the true meaning of GCC solidarity, especially under current circumstances in the region. Riyadh's efforts to achieve peace did not stop there; MBS also discussed regional developments, including Israeli military operations against Iran, with US President Donald Trump, French President Emmanuel Macron, and Italian Prime Minister Giorgia Meloni.

The positions of Riyadh and Abu Dhabi are clear; Saudi Arabia expressed its strong condemnation of the blatant Israeli attacks against Tehran, which undermine its sovereignty and security, describing these attacks as "a clear violation of international laws." Saudi Arabia also firmly emphasized that the international community and the Security Council bear a major responsibility to halt the Israeli aggression. Saudi Arabia's renewed call to mobilize the world’s efforts to reach a comprehensive solution to this dangerous development is not merely a media stunt, but rather aims to protect the region and its people from these successive conflicts.

Furthermore, International Monetary Fund Managing Director Kristalina Georgieva warned that the US strikes on Iran could have broader repercussions beyond the energy sector. Also, Asia has begun accelerating its imports of Middle East oil after spot premiums jumped amid rising tensions in the region, and there’s a possibility that Tehran may disrupt the Strait of Hormuz.

Final words: Despite the peace agreements Tel Aviv has concluded with Egypt, Jordan, Bahrain, the United Arab Emirates, Morocco, and Sudan, it is clear that Prime Minister Netanyahu does not seem to be truly serious about working to achieve security, peace, and stability in the Middle East.

The State of the Saudi economy

This is the latest edition of the monthly Chartbook from Jadwa Investment, which we hope provides you with a useful update on the state of the Saudi economy.

Key observations from the report are as follows:

• Global Economy: May PMI data for China indicates manufacturing sector weakness. The services sector may be faring better, but construction remains under pressure. Meanwhile in the US, bond yields have drifted up amid fiscal concerns as the Trump administration pursues an expansionary budget. The US dollar drifted lower amid negative sentiment.
• Saudi Real Economy: The May non-oil PMI edged up from April, due to increased new orders reflecting solid demand, while the survey indicated further growth in employment. Domestic cement sales rose by 43 percent year-on-year in April, and by 21 percent month-on-month, likely driven by seasonal trends. Meanwhile, latest available data show non-oil exports increased by 10.7 percent year-on-year in March.
• Consumer Spending: Total consumer spending saw a marginal rise in April, up by 0.7 percent year-on-year, but declined by 23 percent month-on-month, primarily due to seasonal trends. The annual growth was largely driven by a 57 percent increase in e-commerce transactions, while both POS transactions and cash withdrawals declined.
• SAMA Foreign Reserve Assets: SAMA’s FX reserves declined in April, down by almost $15 billion, to reach $439.3 billion. The monthly decrease primarily resulted from a decline in bank deposits, down by $18 billion, while foreign securities increased by $2.7 billion.
• Money Supply and Bank Deposits: The broad measure of money supply (M3) increased by 9.3 percent year-on-year, with a marginal decline by 0.1 percent month-on-month in April. Total deposits grew by 9.5 percent year-on-year, with both government and private deposits rising by 9 and 10 percent year-on-year, respectively.
• Bank Credit: Credit growth accelerated to 16.5 percent year-on-year in April, continuing to outpace deposit growth. Credit to the private sector maintained its upward trajectory, rising by 15 percent year-on-year, the highest annual rise since August 2022.
• Inflation: Consumer prices in April rose by 2.3 percent year-on-year and 0.3 percent month-on-month. ‘Food and beverages’ recorded a 2.2 percent increase, led by higher prices in ‘vegetables’ at 9.4 percent. Inflation in ‘Housing and utilities’ inched down, with prices up by 6.8 percent.
• Oil-Global: Brent crude traded close to $65pb in May, with some volatility related to OPEC+ production plans for July. Demand has been supported by pauses to some of the Liberation Day tariffs. Demand for transportation fuels, notably for aviation, has been robust. However, the weak May China PMI data and continued tariff risks remain a concern, especially as supply increases more in H2-25.
• Oil-Saudi Arabia: In Q1-25 crude and refined product export revenue fell by 8.5 percent year-on-year, broadly in line with lower prices. Oil export revenue will be lower in Q2 as lower prices outweigh higher export volumes.
• Stock Market: TASI dropped under 11,000 in the last week of May, down 6 percent from 11,672 at end-April. The main macro factor driving investor caution seems to be the subdued oil price and the potential for that to drag on economic activity.

Kind regards,

Jadwa Investment
Research Department

Work:   +966 11 279 1111 Ext. 4475
Email:   insights@jadwa.com