Saudi Arabia's July oil exports hit lowest since May 2025

U.S. Stock Market

In early trading on September 25, the Nasdaq and S&P 500, which had been declining, staged a sharp rebound. The three major U.S. stock indexes closed mixed:

• Dow Jones: -0.31%
• S&P 500: -0.02%
• Nasdaq: +0.01%

Oil Market: Hormuz Strait Developments

Reports citing "two Iranian sources, two regional officials, and two Western diplomatic sources" indicate that representatives from the U.S. and Iran are discussing a plan to gradually end hostilities. Under the proposed framework:

• Iran would reopen the Strait of Hormuz
• The U.S. would lift its economic blockade on Iran

Regional sources noted that as lifting the blockade has become a more urgent priority, Iran is willing to move its demand for transit fees through the Strait of Hormuz out of the main agreement and into an appendix. However, any such arrangement would be temporary and does not represent Iran formally abandoning its established position.

The report also highlighted "significant obstacles" to negotiations, with both sides reluctant to give up their leverage and lacking mutual trust.

Impact on Oil Prices

International oil prices experienced significant intraday volatility, ultimately closing higher:

• WTI crude oil futures: +2.66%
• Brent crude oil futures: +3.58%

Other Oil Market News

France Proposes G7 Meeting on Strategic Oil Reserves

French President Emmanuel Macron said in a joint interview with two French television stations on the evening of September 24 that France plans to convene G7 member states to discuss releasing strategic petroleum reserves in order to stabilize international oil prices.

Saudi Arabia's July Oil Exports Hit New Low

Data released by the Saudi General Authority for Statistics on September 24 shows:

• July oil exports: 598.88 billion Saudi riyals (approx. $15.9 billion), down 12.8% year-on-year — the lowest since May 2025
• Total merchandise exports: 843.79 billion riyals ($22.4 billion), down 17.2% year-on-year — the lowest since June 2021
• Oil's share of total exports: Fell to 71% in July, down from 71.7% in June

Fed Officials Strike Hawkish Tone

Three Federal Reserve officials delivered hawkish remarks on Thursday:

• Philadelphia Fed President Anna Paulson: Stated that if the economy evolves as expected, "modest further policy tightening may be necessary."
• New York Fed President John Williams: Said another rate hike by year-end is "reasonable" and that more effort is needed to reduce inflation.
• Cleveland Fed President Beth Hammack: Emphasized that in a persistently high-inflation environment, successive external shocks significantly increase the risk of inflation expectations becoming unanchored.

These comments align with the Fed's stance from last week, when the FOMC unanimously agreed to raise rates by 25 basis points and projected at least one more rate hike this year.

Market impact: The probability of a Fed rate hike in October has risen from 53% last weekend to approximately 69% currently, driven by both the officials' remarks and recent strong economic data. The next Fed policy meeting concludes on October 28.

Houthi Rebels Claim Attack on Saudi Capital

According to CCTV News, on the evening of September 24, Houthi military spokesman Yahya Sareea released a video statement claiming the group had used multiple ballistic missiles, cruise missiles, and drones to attack a "sensitive target" in Riyadh, as well as Saudi Aramco facilities in the Red Sea coastal city of Yanbu.

Saudi authorities earlier stated they had intercepted six ballistic missiles fired by the Houthis toward Taif and Yanbu in the south, but did not confirm an attack on Riyadh or any casualties or property damage in Taif and Yanbu.

Earlier that day, Sareea also claimed the Houthis had launched a large-scale attack using dozens of ballistic missiles and drones against multiple military targets in the Jizan region of southwestern Saudi Arabia.

Gold Market: Short-Term Pressure vs. Long-Term Optimism

Precious metals markets came under pressure in the last trading session before the Mid-Autumn Festival.

Analyst commentary: Chen Mengyun, analyst at Shenyin & Wanguo Futures, attributed the recent weakness in precious metals to rising expectations of Fed rate hikes. Following the Fed's hawkish September meeting, rate hike expectations have increased, further boosted by stronger-than-expected U.S. economic data and continued hawkish comments from Fed officials.

Key data points from S&P Global's September PMI report:

• Services PMI: 58.7 (vs. 55.8 expected) — highest since 2021
• Manufacturing PMI: 57.0 — highest since 2022
• Composite PMI: 58.4 — highest since July 2021

Geopolitical factors: U.S.-Iran negotiations remain deadlocked. According to Xinhua News Agency, during the UN General Assembly, Iran held talks with the U.S. through mediators, conveying conditions for reopening the Strait of Hormuz. Iran has taken a强硬 stance, stating it "will not kneel," while the U.S. Secretary of State said the Trump administration has multiple options, including military ones.

"Renewed concerns over oil supply have pushed up oil prices, marginally raising inflation pressure and rapidly increasing expectations of an October rate hike. U.S. Treasury yields have risen sharply, and real rates have moved higher. As a non-yielding asset, gold is highly negatively correlated with real rates, and rising rates directly increase the holding cost of gold, putting significant pressure on precious metals valuations and driving gold prices lower," Chen said.

Outlook

Some analysts believe that short-term pressure on gold prices coexists with a medium-to-long-term bullish outlook.

Zhan Dapeng, director of research at Everbright Futures Research Institute, noted that rising energy costs are currently the main driver of inflation, but oil prices are unlikely to sustain their rise. If energy prices can be effectively controlled later, the Fed's willingness to continue raising rates would decline, making sustained weakness in gold prices less likely.

Chen added that before Fed rate hike expectations cool substantially, gold prices have limited room for a rebound and will likely trade in a range. A trend-driven rally would require signals such as declining rate hike expectations, further visibility of fiscal risks, and sustained return of institutional capital.

"Looking at the medium to long term, the foundation for gold price appreciation has not been shaken," Chen said. She cited the ongoing de-dollarization process driven by the repricing of U.S. dollar credit, sustained central bank gold purchases (China's central bank has increased its gold reserves for 22 consecutive months), a clear trend toward reserve diversification, recurring geopolitical risks, and renewed ETF capital inflows as factors providing solid support for gold prices and room for the medium-to-long-term price center to rise.

(Source: Futures Daily)