Oil Climbs, Rouble Falls as Markets Take Mutiny in Stride

FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oilfield in Midland, Texas US August 22, 2018. REUTERS/Nick Oxford/File Photo
FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oilfield in Midland, Texas US August 22, 2018. REUTERS/Nick Oxford/File Photo
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Oil Climbs, Rouble Falls as Markets Take Mutiny in Stride

FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oilfield in Midland, Texas US August 22, 2018. REUTERS/Nick Oxford/File Photo
FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oilfield in Midland, Texas US August 22, 2018. REUTERS/Nick Oxford/File Photo

Oil was slightly higher on Monday and the rouble lower as an abortive weekend mutiny by Russian mercenaries raised questions about Russian stability and crude supply, but left investors hesitant to draw any further conclusions.

Brent crude futures were last up 0.2% at $74.02 a barrel having earlier fetched as much as $74.80. The rouble dropped to a 15-month low early in Moscow, Reuters said.

MSCI's index of Asia-Pacific shares outside Japan slipped to a three-week low, as small falls in China, Taiwan and Australia offset minor gains in South Korea.

Japan's Nikkei eased 0.1%. The battered yen rose marginally on hints at looming government intervention to support it and after a summary showing a central bank board called for an early revision of yield curve control.

European futures gained 0.3%, S&P 500 futures rose 0.2% and FTSE futures added 0.1%.

Russian mercenaries made a short-lived rebellion on Saturday, seizing the southern city of Rostov and advancing on Moscow demanding the removal of Russian military commanders in charge of the war in Ukraine.

The private Wagner army then withdrew after striking a deal guaranteeing their safety and the passage of their leader, Yevgeny Prigozhin, to Belarus.

The consequences for the Ukraine war were not clear, though the challenge to Russian President Vladimir Putin's authority was the starkest in decades of his leadership.

"I don't think the market can get its head around working out if there are implications," said Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney.

Analysts at RBC Capital Markets said one concern was the possibility of martial law in Russia and its effect on the workforce at ports and oil production facilities.

Gold, which had hit a three-month low on Friday, rose 0.2% to $1,925 an ounce. US Treasuries were firm with yields, which fall when prices rise, marginally lower.

Two-year yields fell 2 basis points to 4.731%. Ten-year yields fell 1.8 bps to 3.721%.

"This putsch ... has revealed cracks and fragilities that now cannot be unseen," said Mizuho economist Vishnu Varathan.

"It undeniably amplifies global geopolitical risks."

CHINA FOCUS

With the mutiny being on the watchlist rather than driving action in Asia, investors were left to pore over the latest signs of China's recovery stalling, which on Monday was softer-than-hoped-for travel figures for last week's holiday.

S&P Global also followed most Wall Street banks and cut its 2023 GDP growth forecast for China on Sunday.

Blue chip stocks fell 0.7% in Shanghai.

The yuan slid to catch up offshore falls during the break on Thursday and Friday, but the People's Bank of China fixed the midpoint of its trading band surprisingly strong, suggesting it might not be so tolerant of further weakness.

The yuan was last at a seven-month low of 7.2199 per dollar.

The risk-sensitive Australian dollar was steady at $0.6683. The euro nursed last week's modest drop at $1.0903 and sterling held at $1.2730.

The yen, down nearly 9% this year as global interest rate expectations rise and Japan's central bank stays dovish, bounced as much as 0.3% to 143.27 per dollar, partly thanks to speculation around intervention or a policy shift.

Japan's top currency diplomat Masato Kanda toughened his tone on Monday, describing recent moves as "rapid and one-sided" in a possible prelude to intervening to buy yen.

A Bank of Japan policymaker also called for revision to its yield curve control policy, a summary of opinions at the June meeting showed on Monday, suggesting the central bank's ultra-loose monetary settings may be at a crossroads.



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.