Oct 22, 2026 · 5 min
Oil stays elevated as U.S.–Saudi tensions raise market risks
UBS On-Air: Paul Donovan Daily Audio 'Oil and bonds'
Persistent fuel costs and signs of regional instability could deepen pressure on consumers and markets next year.
- 1Oil remains near recent highs while U.S. diesel prices stay close to record levels.
- 2Reports of diplomats leaving Saudi Arabia suggest regional instability may be adding to energy-market concerns.
- 3Paul Donovan warns consumer risks could become more significant next year as energy pressures persist.
Don't miss
Paul Donovan links near-record U.S. diesel costs with reports of diplomats leaving Saudi Arabia, bringing market and geopolitical risks into one frame.
The brief
Paul Donovan opens with oil prices near recent highs and U.S. diesel costs close to record levels, arguing that current policy shows little sign of easing energy pressures.
Reports that the United States is asking some diplomats to leave Saudi Arabia introduce a geopolitical risk alongside the market’s already elevated energy costs.
The episode’s central tension is whether regional instability will keep energy pressures elevated, with consumer consequences potentially becoming more significant next year.
What was said on this episode
9 statements · 1 positive · 4 negative · 1 mixed · 3 neutral
High refined energy prices would make consumers more economically vulnerable next year.
“Those limits are unlikely to be tested over the remainder of this year, but next year there is more vulnerability if refined energy product prices remain high.”
Listen at 1:00
Higher or prolonged oil prices challenge consumers’ willingness to reduce savings.
“Consumers' willingness to scale back savings will be challenged by the higher the oil price goes, the longer the price remains elevated, or the less secure consumers feel about their economic future.”
Listen at 1:11
A no-hire, no-fire labor market pattern is not reflected in jobless claims.
“The pattern of the labor market has been focused on a no-hire, no-fire approach, and that doesn't tend to get reflected in the claims numbers.”
Listen at 1:37
French business sentiment data is generally not worth taking seriously.
“French business sentiment data for October is scheduled, and like most sentiment polls, it's not generally worth taking that seriously.”
Listen at 1:57
Protests do not necessarily significantly affect real economic activity.
“And protests do not necessarily have a significant impact on real economic activity.”
Listen at 2:21
Protests may delay shopping and affect tourism but have little broader economic impact.
“They might delay shopping activity, and in the longer term they might affect tourism, but they have little impact on broader activity.”
Listen at 2:26
French yields above 5% have stirred attention because round numbers captivate politicians.
“French yields, Rising above 5% has created another stir, again demonstrating the power of round numbers to captivate politicians' attention.”
Listen at 2:40
Government borrowing costs have returned to economic norms after years of low yields.
“The reality is that after years of giving bondholders unfairly low yields, government borrowing costs have returned to economic norms.”
Listen at 2:52
Current government borrowing costs are normal rather than a new normal.
“Governments need to manage that, but where we are today is not the new normal, but the normal normal.”
Listen at 3:01
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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