US mid-terms and the Iran war, Saudi budget deficit

The US mid-terms and a flurry of diplomatic activity in the region have reduced the threat of a renewed escalation of the Iran war and also raised hopes that a political solution to the conflict may be nearing. But there are still significant hurdles to achieving this and any peace would be fragile. Meanwhile, Saudi Arabia’s budget deficit narrowed in Q3 and it may improve further so long as oil export volumes and prices remain high. Even so, we remain concerned about the medium-term trajectory of Saudi public debt.