Morgan Stanley lowered its 2026 GDP forecast for Saudi Arabia to -1.8%, citing a more prolonged oil supply disruption than previously expected, with oil export volume normalization now seen delayed until the second quarter of 2027. The investment bank said oil export volumes in the third quarter of 2026 remained below expectations, deepening the drag on headline growth despite continued support from non-oil activities, which are projected to grow 3% in 2026. Morgan Stanley expects crude production to average around 6.3 million barrels per day in the fourth quarter of 2026, leading to a further 28% year-over-year contraction in oil activity during that period, and estimates full-year oil GDP will contract 17.8% in 2026. The bank's base case assumes crude exports will remain in the 4-5 million barrels per day range in the fourth quarter, supported by a mix of constrained flows through Hormuz and available export access through the Yanbu pipeline. For 2027, Morgan Stanley forecasts a strong reversal, with oil GDP expected to expand by approximately 23% as production and export capacity gradually normalize, and it expects oil fiscal revenue to total 685 billion Saudi riyals in 2026, increasing to 740 billion riyals in 2027 as export volumes recover while prices remain above $75 per barrel on average in the first half of 2027.
Morgan StanleyMorgan Stanley itself issued the lowered Saudi 2026 GDP forecast, a research call rather than a direct hit to its own earnings.
Bank of Chongqing Co Ltd