Israel-Iran Ceasefire, Neuberger Berman: Türkiye and Egypt are the immediate beneficiaries

Neuberger Berman 's analysis of the latest developments in the Middle East.

The announced ceasefire between Israel and Iran , if maintained, signals at least a temporary easing of tensions, which has helped calm energy and financial markets.

Among regional markets, Turkey and Egypt are the immediate beneficiaries, as the drop in oil prices, which recorded the biggest daily decline since 2022, provides breathing space for their external balance sheets.

For Egypt, the next major development will be the reopening of production and exports from the Leviathan field in Israel, which will allow the country to avoid more expensive LNG imports. A normalization of the security situation in the Gulf Cooperation Council (GCC) , Egypt’s main source of capital and investment, would also be positive.

We are more cautious in Turkey due to internal developments, especially the upcoming June 30 date for the CHP party congress, the potential cancellation of which could exacerbate internal tensions and political uncertainty.

Elsewhere in the region, oil-importing countries Jordan and Lebanon are also expected to benefit, and while Iraq faces lower revenues as an oil exporter, the improved security situation is a major positive ahead of elections next year.

Among the GCC markets, the main country to watch will be Saudi Arabia . Although the country's geopolitical position has improved, a further decline in oil prices would increase the fiscal deficit and the need for emissions.

We note that there remains a significant risk of a reversal of the trend. Similar ceasefire attempts in Ukraine and Gaza have not been successful, and there are questions as to whether Tehran will remain committed as a signatory to the Nuclear Non-Proliferation Treaty.