The World Between Oil and Chips

China unsettles technology markets, U.S. interest rates pressure currencies, and India pays the price of energy, while the global press watches Saudi Arabia’s ability to protect its exports between Hormuz and Bab al-Mandab

Issue Five | July 28, 2026

Capitals | BETH

Markets are no longer moving solely according to what companies produce.

News of China’s progress in chip manufacturing can erase billions of dollars from the value of companies in South Korea, Japan, and Europe.

A temporary halt to strikes on Iran can lower oil prices, strengthen the currencies of importing countries, and alter interest-rate expectations in Washington.

As for Saudi Arabia, it appears in the global press as the country that possesses energy, but faces a more complex test:

How can it maintain its access to the world when both the eastern route and the western alternative are threatened at the same time?

Washington | Two Capitals Visit Trump

U.S. President Donald Trump receives Ukrainian President Volodymyr Zelensky and Israeli Prime Minister Benjamin Netanyahu today, Tuesday, in two separate meetings that bring the wars in Ukraine and Iran into the White House on the same day.

Zelensky seeks to accelerate the delivery of air-defense systems, advance cooperation in drone manufacturing, and ensure continued U.S. support, while the Senate considers a new sanctions bill against Russia.

Netanyahu, meanwhile, brings the Iran file, attempting to convince Trump that suspending the strikes may give Tehran time to rebuild its capabilities, while the U.S. president wants to test negotiations before deciding whether to resume the strikes.

The two visits reveal that the United States is not only facing a shortage of military options, but also pressure on its ability to distribute weapons, money, and political attention among multiple fronts.

The munitions sent to Ukraine do not remain fully available for the Middle East.

And the defenses protecting U.S. bases and Washington’s allies from missiles and drones cannot be produced at the same speed at which they are consumed.

Thus, the decision to support one ally becomes a calculation related to what the other ally may need.

Federal Reserve | A Cut Trump Wants and a Hike Markets Fear

The dollar rose to its highest level in a month, while the probability of the Federal Reserve raising interest rates by 25 basis points increased to approximately 38%, compared with 16% a week ago.

Inflation concerns eased slightly as oil prices declined, but they did not disappear, as markets still face pressures from tariffs, energy, food, and massive investments in artificial intelligence.

Trump, meanwhile, is calling for lower interest rates, arguing that the United States should enjoy the lowest borrowing costs in the world.

But the central bank faces a different equation:

Cutting interest rates may support growth and markets, but it could reactivate inflation.

Raising them may protect the dollar and curb prices, but it would increase borrowing costs and place pressure on companies and countries whose currencies are linked to the U.S. currency.

Therefore, the decision will not remain within the United States; any U.S. rate increase will quickly spread to Gulf markets, financing costs, and global capital flows.

Beijing | China Upends the Chip Market

Shares of the Chinese memory-chip manufacturer CXMT jumped 466% on their first day of trading in Shanghai, following the largest initial public offering by a Chinese semiconductor company.

The company raised approximately $8.6 billion, and its market value reached nearly $488 billion by the end of the session, making it the largest listed company in China by value.

The surge does not reflect the company’s performance alone, but China’s bet on building an independent chip industry in the face of U.S. export restrictions.

Zhongji Innolight, which specializes in optical components used in data centers and artificial intelligence, also raised approximately $6.8 billion through its Hong Kong listing, in the second-largest Asian offering of 2026.

Beijing is not content with financing factories from the state budget.

It is turning the stock market into a tool for mobilizing domestic and global savings behind the project of technological independence.

Seoul and Tokyo | China Erases Its Rivals’ Gains

China’s rise and concerns over the cost of financing the artificial intelligence boom triggered a sharp selloff in Asian technology stocks.

South Korea’s index fell by approximately 10%, triggering a temporary trading halt, while Japan’s index declined by approximately 4%.

Shares of Samsung Electronics and SK Hynix dropped by more than 13%, amid growing concerns over China’s progress in memory chips and semiconductor manufacturing equipment.

Shares of European companies operating in chipmaking equipment also declined after signs emerged that China was developing domestic alternatives to technologies previously monopolized by Western companies.

The paradox is that the artificial intelligence boom that lifted chip stocks has itself become a source of fear.

The market has begun to ask:

Can data centers generate returns that justify the hundreds of billions being spent on them?

And will cheaper Chinese production transform the current chip shortage into a surplus that pressures prices and profits?

China has not yet surpassed all its competitors technologically, but it has succeeded in changing their expectations, and markets sometimes move out of fear of the future before it arrives.

New Delhi | Oil Slows India

Economists expect India’s economic growth to decline from 7.7% in the previous fiscal year to approximately 6.6% in the year ending in March 2027.

The slowdown is linked to weak private investment and rising energy costs resulting from the war, as India imports approximately 80% of its oil needs.

The decline in oil prices in recent days helped the rupee recover part of its losses, but it remains down by approximately 6.5% since the beginning of the year, prompting the central bank to intervene in support of it.

India reveals how instability in the Middle East is transmitted to a distant economy:

Higher oil prices weaken the currency.

A weaker currency raises the cost of imports.

Rising import costs place pressure on inflation.

The central bank then becomes more cautious about cutting interest rates, while the economy needs cheaper financing to support investment and jobs.

For this reason, New Delhi does not view the de-escalation between the United States and Iran merely as political news, but as an economic policy that directly affects its growth.

Brussels | Europe Protects the Factory and the Store

Calls are growing within Europe to strengthen trade-protection tools against Chinese products.

Italy’s machinery industry has called on the European Union to take stronger measures, after China’s share of global metalworking-machinery exports rose from 8% in 2016 to 23% in 2025, while Europe’s share declined.

In e-commerce, the European Union faces objections over new fees imposed on low-value parcels, after additional costs emerged that consumers discover only upon payment or receipt of the order.

The two issues reveal a single European direction:

Protecting factories from subsidized industrial imports.

And protecting local stores from inexpensive parcels shipped directly to consumers.

But protection carries a cost, as it may raise prices, increase customs complexity, and push Chinese companies to establish warehouses and factories inside Europe to bypass the barriers.

Free trade in Europe, therefore, no longer means opening the market to everyone under the same conditions, but opening it to those who can prove that their production and financing chains comply with European rules.

Saudi Arabia in the Global Press

Oil Falls, but the Risk Does Not Disappear

Brent crude fell to approximately $86 per barrel, its lowest level in more than a week, after the halt in U.S. strikes strengthened hopes of reaching an understanding with Iran.

Markets view the talks concerning the Strait of Hormuz positively, but they do not overlook the transfer of risk to the Red Sea and the targeting of Saudi oil facilities and routes.

Here, a market paradox emerges:

Prices fall because U.S. aircraft have stopped bombing.

But tankers, ports, and pipelines continue to operate within an unstable security environment.

This means that the market prices in the possibility of de-escalation faster than it can eliminate the actual risk.

The Kingdom at the Center of the Test

The Asian press is focusing on the vulnerability of energy supplies following the disruption of the Strait of Hormuz and the extension of the threat to Bab al-Mandab and the Red Sea.

The East–West Pipeline and the Port of Yanbu represented Saudi Arabia’s alternative to crossing Hormuz, but Houthi attacks and threats to ships have placed the alternative route under pressure.

For Japan, South Korea, Thailand, and the Philippines, the matter does not concern Saudi Arabia alone. These economies depend to varying degrees on Middle Eastern oil, and any increase in journey times, insurance, and shipping costs quickly reaches factories and consumers.

Saudi Arabia has thus become, in Asian coverage, not merely an oil supplier, but the center of a test of the global energy system’s ability to operate when two strategic passages are threatened at the same time.

Saudi Markets Await Washington

The Saudi index declined slightly, affected by lower shares of Aramco and Ma’aden, amid anticipation of the Federal Reserve’s decision and negotiations with Iran.

The Saudi market is not moving here under the influence of a single domestic factor.

Lower oil prices may reduce the revenues of energy companies, but they also ease global inflationary pressures.

A U.S. interest-rate increase may be transmitted to financing costs in the Kingdom because the riyal is pegged to the dollar.

Successful negotiations, meanwhile, would reduce security, insurance, and shipping risks, but could push oil prices further downward.

This equation reveals that good security news is not necessarily positive for every stock, and that higher oil prices are not a complete gain if they result from threats to facilities and shipping routes.

Chips | A Saudi Opportunity and Warning

The major disruption in technology stocks carries a message for Saudi Arabia, which is expanding its investments in artificial intelligence, data centers, and semiconductors.

Global demand for computing and chips remains enormous, but markets have begun distinguishing between projects with a clear economic model and those dependent on continued high valuations and cheap financing.

Chinese competition opens opportunities for the Kingdom to attract companies seeking manufacturing bases, financing, and new markets between Asia, Europe, and Africa.

But it also requires that Saudi investments do not become merely a source of financing for the race.

The greater value will lie in transferring knowledge, developing competencies, localizing parts of the supply chain, and owning applications that generate returns from artificial intelligence infrastructure.

Those who purchase chips participate in the boom.

But those who build the knowledge, product, and market around them own part of its future.

BETH Reading | The Power of the Route

Today’s news appears to be distributed among White House meetings, dollar interest rates, Chinese chips, Korean stocks, India’s growth, European trade, and Saudi oil.

But they converge around one truth:

Economic power does not begin with the final product.

It begins with the material, technology, financing, and route.

China does not want to keep buying chips forever, so it is building its companies and financing them through its markets.

Europe does not want to lose its factories, so it is rebuilding its trade borders.

India cannot protect its growth if the oil bill continues to dictate its monetary policy.

As for Saudi Arabia, possessing oil or the ability to produce it is not enough; it must protect the route, diversify ports and pathways, and build industries whose income does not stop at a barrel crossing a strait.

In a world where a technological rumor can bring down a market, a night without bombing can lower oil prices, and a single drone can raise insurance costs, the strongest country will not merely be the one that possesses the largest resource.

It will be the one capable of producing it, financing it, protecting it, delivering it, and then continuing when one of the routes is disrupted.