Dramatic 25-year agreement: Trump reveals a new mega-deal

The daily research report from UBS presents a broad snapshot of the markets and points to several trends that may influence investor decisions in the near future.

At the center of the report is the oil deal between the USA and Venezuela. US President Donald Trump announced an agreement under which American companies will receive a central role in developing oil fields in the country, which holds more than 65 billion barrels of proven reserves. According to the interim president of Venezuela, Delcy Rodriguez, this is a 25-year agreement intended to lead the country to a production of more than 1.5 million barrels per day.

Investments within the framework of this move may reach more than 100 billion dollars. However, at UBS they are cooling the enthusiasm and estimate that in the short term, no significant impact on the oil market is expected. According to them, supply disruptions in the Strait of Hormuz, against the backdrop of the conflict between the USA and Iran, continue to be a key factor in determining prices. In addition, the state of the oil infrastructure in Venezuela and the lack of investment are expected to make it difficult to increase production quickly.

At the same time, a worrying development is being recorded in Europe. Inflation in Germany rose in August to 2.9%, compared to 2.8% in July, while energy inflation jumped to 10.5%. At UBS, they estimate that high energy prices may delay the interest rate cut in Europe, with the European Central Bank expected to raise the deposit rate to 2.5% in September.

Significant investments are also being recorded in East Asia. South Korea proposed a record budget of 821 trillion won for 2027, about 597 billion dollars, with extensive investments in artificial intelligence and infrastructure. Among other things, 1.9 billion dollars were allocated for semiconductors and 15.5 billion dollars for water, electricity, and logistics infrastructure.

And in Japan, despite declines in the stock market and a rise in bond yields, UBS still maintains an attractive rating for local stocks. The Nikkei 225 index has risen by more than 31% since the beginning of the year, with the bank noting corporate profits, the normalization of monetary policy, and investments in AI and electrification as factors that may continue to support the market.

The picture presented by the report is clear: geopolitical headlines may be dramatic, but for investors, the real impact is tested through energy prices, interest rates, infrastructure investments, and company performance.