Good morning, nice people. Today’s theme: the cost of keeping the lights on and the shelves full.
A suspected drone strike has knocked Kurdistan’s main gas facility offline again. Sharjah-based Dana Gas halted production at Khor Mor after the attack started a fire, cutting off gas to the plants that generate most of the region’s electricity. The fire is out and no one was hurt, but production stays suspended while the damage is assessed, and the company hasn’t given a restart timeline in its statement (pdf).
IN CONTEXT- That one facility fuels more than 80% of the Kurdistan Region’s power, 964 reports. The attack initially took around 2.8 GW of generation offline, with a drone hitting an LPG storage tank as workers took cover in shelters, two sources at the region’s Electricity Ministry told Reuters.
Down in the Gulf, the pressure is on the pantry: Every Gulf state can keep food coming in, but food inflation ran at 12.7% in Qatar in June against 1.5% in Saudi Arabia in July. Our Lede looks at the storage, subsidies, and detours behind that gap.
We promised more on the GCC railway, and we went back for it. We put the financing question and the 2030 deadline to three more analysts, and their answers on the finish date ranged from 2030 to 2034.
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What does it cost a Gulf state to keep its shelves stocked while shipping through the strait is under fire? The answer varies by state: food-import dependency runs from 72% in Oman to 89% in the UAE, according to the FAO’s April GCC Food and Agriculture Policy Flash, and most of those imports pass through Hormuz. The divide is between states that can keep supplies and prices steady during a crisis and states that face “higher costs, greater disruption, and more difficult political choices,” Neil Quilliam, associate fellow at Chatham House’s MENA Program, tells EnterpriseAM.
Reliance and prices
One state has a way around the strait: Saudi Arabia’s Red Sea ports mean 59% of its food imports pass through the strait, against 100% for the other five states, according to the FAO. The Red Sea coast gives it the alternative, and its western ports now carry its state wheat: it sent all 661k tons of its latest state wheat purchase to Red Sea ports, and its food security authority has tendered 535k tons for delivery to Jeddah, Yanbu, and Jazan in November and December. That route has a limit of its own. The Houthis declared a naval blockade on Saudi Arabia at Bab Al Mandab in July, so the Red Sea is a way around Hormuz and not a riskfree one.
Going around the strait costs more: Unlike oil and gas exports, food imports can reach the Gulf by land and air, Justin Alexander, Gulf analyst at GlobalSource Partners and director of Khalij Economics, tells us. The cost is showing up in inflation “even with new and existing subsidies in many countries,” he adds, partly because global food prices are up on fertilizer and fuel costs, “combined with logistical constraints.” It is “most visible for Qatar, but even Oman, with its main ports outside Hormuz, has been impacted.”
Prices show who is paying: Food inflation was 12.7% in Qatar and 5.6% in Kuwait in June, and 7.8% in Dubai, 7.3% in Oman, 7.2% in Bahrain, and 1.5% in Saudi Arabia in July, according to Khaliji Economics. Food made up 72% of Qatar’s overall inflation, half of Oman’s, and 46% of Kuwait’s, against 18% in Saudi Arabia.
Stocks and storage
The six states’ cushions differ, though none is likely to run out of food. Saudi Arabia’s Red Sea coast and logistics give it an edge, and the UAE has built significant storage and re-export capacity, Quilliam tells us. Saudi Arabia’s own storage stands at 3.5 mn tons, enough for at least four to six months.
The UAE stores grain on the far side of the strait: It has 300k tons of grain storage at Fujairah, on the Gulf of Oman, in a terminal run by Etihad Mills, a joint venture of Al Dahra and Loulis Mills. Its strategic stock of basic goods covers four to six months of market needs, the Economy and Tourism Ministry said. Federal Law No. 3 of 2020 requires suppliers to hold strategic food stock in domestic warehouses, tracked electronically by the Economy Ministry.
Qatar holds the deepest stockpile in the Gulf: Its interior minister said in March that food reserves cover 18 months. The Hamad Port food security facilities and warehouses provide 300k tons of capacity, with the project 98% complete in June. In April, the commerce minister said those stocks “remain untouched,” with Qatar Airways flying in about 2k tons of fruit and vegetables and 1.2k tons of red meat instead.
Oman is paying to keep its import bill down: Since 1 July, the state has covered 50% of fuel and ins. costs on food shipments from India for up to six months. Oman Flour Mills has 160k tons of wheat storage at each of its three sites, all outside the strait, with national capacity planned to reach about 650k tons within two years. No months-of-cover figure has been published for Oman’s reserves, and strategic grain reserves “remained at safe levels” in May, the chair of the Oman Chamber of Commerce’s food security committee said.
Kuwait and Bahrain each aim for six months: Kuwait aims to keep at least six months of basic food stock, the Commerce and Industry Ministry said in September, and it banned all food exports by land, sea, and air in March. Bahrain’s strategic stocks cover local needs for at least six months, the Commerce and Industry Ministry said, according to Derasat, with no tonnage given.
The detours
Bahrain and Kuwait are leaning on Saudi land routes: Thousands of trucks have carried goods to the two states through Saudi Arabia. In March, Saudi Arabia’s port authority linked Dammam to Bahrain’s Khalifa Bin Salman Port through a 3k TEU shuttle, and Jazeera Airways opened a cargo corridor into Kuwait via Saudi Arabia’s Qaisumah airport.
The longer bypasses are open, and small: A Ro-Ro line from Trieste to Damietta, with cargo trucked to Safaga and shipped on to the Gulf, moved some 5.3k tons over 12 voyages between March and early June. That’s about a third of what one of Fujairah’s 20 silos holds, on average, by our math. The UAE took 42.8% of the cargo and Saudi Arabia 947 tons.
Bahrain has the least room to maneuver: Its gap is “mainly a scale and capacity issue,” Quilliam tells us. It “faces the same vulnerabilities but operates with tighter fiscal constraints and more limited state capacity” than the UAE and Saudi Arabia, which have larger financial resources, larger bureaucracies, and dedicated food-security institutions. Political will matters, he adds, but he “would not characterize Bahrain’s slower progress as a lack of commitment.” Food security competes with other fiscal priorities: “The UAE has been able to treat food security as a strategic national project. Not every Gulf state has that luxury.” Alexander tells us he doesn’t “see any sign of trade-offs between food security and defense spending, which is far higher anyway.”
Built for a shorter crisis
Two decades of Gulf food-security planning assumed disruptions would be short and isolated. They would be “temporary and isolated,” Quilliam tells us, and recent crises have shown that multiple shocks can hit at once. The challenge now is keeping alternative routes, storage, logistics, and procurement channels available “even during prolonged crises.”
Most strategies assume one corridor fails: “There is planning, but there is no perfect solution,” Quilliam tells us. The Houthis declared a naval blockade on Saudi Arabia at Bab Al Mandab in July, and a sustained closure of both chokepoints would put “considerable pressure on regional supply chains,” he adds. The problem “would not necessarily be food availability globally, but getting food into the region efficiently and affordably.”
Why it matters: The longer shipping through the strait stays under threat, the more Gulf food security comes down to who can pay for alternatives: air freight, subsidized shipping, and Saudi trucks. Being able to hold both supplies and prices stable “is increasingly how food security resilience should be measured in the Gulf,” Quilliam tells us.
What’s next: Alexander expects “more policy signals indicating planning, investing in warehousing, domestic production and supply route diversification.” Food security has been a GCC concern “since at least the 2007 price spike,” he tells us, and it is “definitely a factor in recovery planning.”
Gulf transport ministers have signed the legal framework for a 2.1k-km railway linking ports on both sides of Hormuz, though each country still funds its own track and how to pay for Saudi Arabia’s 672-km stretch is still unsettled. The Kingdom’s large share of the route puts its financing decisions at the center of the whole network, railway industry consultant Jean-Pol Mura tells us.
The line would run through all six GCC states: The General Agreement for the GCC Railway Project, signed in Bahrain on Sunday, covers Kuwait, Saudi Arabia, Bahrain, Qatar, the UAE, and Oman, according to a press release. Bahrain’s transport minister called it “an essential step towards completing the legal and regulatory work needed for the railway project to go ahead,”according to The National.
The official target is still full operations by December 2030. The project is 55.9% complete, GCC Secretary General Jasem Albudaiwi said, according to Ajel. Mura tells us that 2034 is the earliest plausible date. The railway was first proposed more than a decade ago.
Why it matters: With a finished network, Gulf shippers could move freight by rail between ports on either side of the strait instead of by sea. During the war, overland cargo between GCC states went by truck, with driver and vehicle rules changing at every border.
Separate checks
Funding stays national: Each section is financed and tendered separately by the country it crosses. The new agreement doesn’t set out a regional financing package or a common structure for running the network. Hafeet Rail, the USD 2.5 bn, 238-km line between Sohar and the UAE network, has secured USD 1.5 bn in debt financing through a joint venture of Etihad Rail and Oman’s Asyad Group, with Mubadala.
Decentralized financing comes with a coordination risk: Keeping financing at the national level allows governments to tap sovereign wealth or private capital without taking on collective GCC debt, Amandeep Kaur Ahuja, MENA geopolitical risk consultant, tells us. The risk is that uneven financing and construction schedules could delay the entire network, while heightened geopolitical uncertainty could push up borrowing costs for private investors, she adds.
Hafeet’s structure could work elsewhere: Other GCC members could replicate it, Ahuja argues, since this year’s shipping disruptions have strengthened the commercial case for land transport. Regional lenders may take comfort from government backing, though foreign capital could be harder to find. “While Etihad Rail did see Japanese financing, future foreign financing could hinge upon guarantees related to geopolitical instability,” she says.
The model may be harder to copy: The UAE-Oman line benefits from established port cargo flows and sovereign-linked sponsors, making its financing structure difficult to replicate elsewhere, Aadil Rashid Khan, associate director of mobility, supply chain and logistics growth advisory at Frost & Sullivan, tells us. The UAE network and the Saudi mineral lines are commercially viable independently, while the Saudi GCC connection, Kuwait, Qatar, and Bahrain would remain dependent on government funding or guarantees, he adds.
Saudi Arabia has set conditions before. The Kingdom’s section runs from the Kuwaiti border to the UAE border. Riyadh previously supported the connections as long as Qatar and the UAE paid for the related track on Saudi territory, Mura says, so it’s still unclear how the cost of cross-border sections will be shared.
Built for bulk
Big industrial shippers could anchor demand: Saudi minerals, Abu Dhabi petrochemicals, and industrial cargo arriving through Khorfakkan offer some of the strongest commercial openings for the railway, Ahuja says. Long-term freight commitments from players such as Saudi miner Maaden and Abu Dhabi refiners could secure volumes and firm up the investment case, she adds.
Lenders will want volumes in writing: Rail’s strongest commercial prospects are heavy, repeat shipments of minerals, petrochemicals, construction materials, and containers between industrial hubs and ports, transport and logistics specialist Ziya Mammadov tells us. To support financing, the new cross-border links will need take-or-pay contracts and minimum-volume commitments from anchor shippers, Khan argues. Miners, petrochemical producers, and port operators can promise steadier freight volumes than logistics companies on their own, he adds.
The long-range forecasts are large: The railway is projected to carry around 200 mn tons of goods a year by 2030, rising to 271 mn tons by 2045, Arab News reports. By Ahuja’s estimate, around 70 mn tons of freight moves by road across the GCC in a normal year.
The cargo is already moving by truck: Saudi Arabia alone moved 30 mn tons in 2025, and trucking out of Khorfakkan has ramped up to around 150k tons a day, Ahuja says. “We know the volume exists,” she adds. Double-tracking, more rolling stock, larger inland terminals, and a Khorfakkan rail spur could lift rail’s share of diverted cargo from the low hundreds of thousands of TEUs to the low mns within three to five years, former Etihad Rail strategy director Urs Mosimann estimated in April.
Rail would work best alongside trucks: The railway’s commercial edge may come from complementing trucking, Ahuja argues. Rail becomes more efficient over distances beyond 500 km, especially when operators can line up return cargo and avoid running empty, she says.
There’s a ceiling on how much diverted cargo rail can take: How much freight the railway can pick up during future disruptions will depend on available locomotives, wagons, terminal capacity, and existing cargo commitments, Khan says. Etihad Rail’s March surge of 459k tons over nine days works out to an annualized 18.6 mn tons, he estimates, or about a quarter of the GCC’s normal road freight, by our math. Longer terminal hours, more rolling stock, and faster turnarounds could lift that to 23-28 mn tons, he adds. Even with more trains, port handling, customs clearance, and last-mile trucking could remain the main bottlenecks, he warns.
Rules of the rail
Each operator would keep the revenue from its own section: Costs and revenue can be split by section, Ahuja says, so “Etihad Rail usage leads to Etihad Rail revenue.” Tariff structures will need careful negotiation under the Gulf Rail Authority framework to keep costs even across the network, she adds. She expects the sections to run separately but coordinate as a single unit.
Shared signaling still needs shared operating rules: The GCC Railways Authority will need to harmonize operating standards across all six national networks to keep signaling costs in check, Mura says. Even if every country adopts the European Rail Traffic Management System Level 2 (ERTMS Level 2), differences in national operating rules could raise costs, weaken interoperability, and hurt the network’s commercial case, he warns.
Next stops
Some links will pay off sooner than others: The UAE-Qatar-Dammam connection matters more commercially than Bahrain, Mura says, though limited capacity on Saudi Arabia’s east-west railway could constrain onward freight. Bahrain and Kuwait could still become commercially relevant over time, since new infrastructure can create trade patterns as well as serve existing demand, he adds.
What’s next: Hafeet Rail’s trial run, due in 4Q 2027, is the next milestone on the network. Further out, Bahrain’s connection depends on the proposed King Hamad Causeway to Saudi Arabia, The National reports.
The 2030 deadline divides the experts: Full operations by 2030 are unrealistic, and 2034 is the earliest plausible date, Mura says. Full commercial integration across all six countries by then looks unlikely too, Khan says, though he sees a Saudi-UAE-Oman rail spine as possible. The deadline is still achievable if national investment and construction schedules are coordinated, Mammadov argues. The bigger risk is countries finishing their sections at different times, which would leave the wider network unable to run as a single system, he adds.
Humain is borrowing more for power than for chips: Saudi Arabia’s National Infrastructure Fund (Infra) has signed two financing facilities worth SAR 2.5 bn (USD 667 mn) with the AI company, according to a press release. SAR 1.4 bn will fund substations, transmission infrastructure, and grid connections designed to support up to 1 GW of future data center capacity. The remaining SAR 1.1 bn or so will finance GPUs for about 25 MW of IT load.
These are the first loans under Infra’s AI data center program: They build on a non-binding framework of up to USD 1.2 bn that Infra and Humain announced at Davos in January. Infra’s AI Data Center Financing Program offers corporate capex loans and project finance. Borrowers need a minimum of 50% of capacity contracted or in advanced negotiations at financial close.
Humain has other money lined up. Aramco invested USD 2.6 bn for a 49% stake in Humain, which closed earlier this month, and PIF keeps 51%. Humain is also raising a domestic data center fund seeking an initial USD 2.5 bn, with BSF Capital managing its debt-and-equity structure. A separate fund will finance GPUs and other IT equipment, CEO Tareq Amin told us in October.
The project pipeline is already taking shape: Humain has awarded Al Moammar Information Systems a c. SAR 8.76 bn contract to build 250 MW of AI data centers through phased work orders. For Humain’s planned 6 GW campus in east Riyadh’s Al Saad area, Al Yamama secured the contract for the power network, two substations, and a 2k MVA bulk supply point.
Infra’s financing is a small slice of what Humain plans to build. Humain is targeting 1.7 GW of data center capacity in 2027 and around 3 GW by 2030. It puts building costs at USD 10-12 mn per MW. At that rate, 1.7 GW would cost USD 17-20 bn to build, by our math.
Adnoc Distribution’s 3Q net income was flat y-o-y at AED 818 mn, as the inventory gains that inflated its 1H earnings dried up. Rising oil prices handed the company AED 762 mn in gains on fuel held in stock in 1H, but it booked none in 3Q, according to its management discussion and analysis report (pdf).
Higher pump prices lifted revenue by 39.1% y-o-y to nearly AED 13 bn during the quarter, mostly on higher selling prices. Adnoc Distribution earns a fixed margin per liter on much of its fuel retail business, so pricier fuel swells sales far faster than income. Gross income rose 4.2% to AED 1.9 bn.
Fuel still makes up the bulk of sales, but non-fuel is where income grew fastest. Fuel retail revenue rose 36.1% to AED 8 bn in 3Q, c. 62% of the total. Non-fuel retail — from convenience stores, car care, and rentals — brought in just AED 490 mn of revenue. It still contributed AED 275 mn of gross income, up 12.9% y-o-y, making up c. 15% of the company’s total.
Over 9M, net income rose 36.6% y-o-y to AED 2.9 bn on AED 35 bn in revenue, helped by AED 762 mn in inventory gains, up from AED 234 mn a year earlier. Aviation was the fastest-growing line, with its revenue nearly doubling to AED 2.4 bn as volumes rose 49.3%, though gross income from the business inched up just 2.3%.
Output does the lifting
Higher production and realized hydrocarbon prices lifted Dana Gas’ 3Q net income 50% y-o-y to AED 165 mn, while its revenue rose 42% to AED 436 mn, according to the company’s earnings release (pdf). The bottom-line growth tracked a 17% increase in group production to 61.4k barrels of oil equivalent per day during the quarter.
9M in picture: On a 9M basis, revenue climbed 48% y-o-y to AED 1.38 bn, while net income rose 48% to AED 558 mn. However, excluding a one-off metering reconciliation of AED 176 mn, the firm’s bottom line was broadly flat, inching up around AED 3 mn. Daily production averaged 55.8k barrels of oil equivalent, up 6%.
Expansion starts paying: The energy producer rode a wave of stronger oil prices and higher production across Egypt and Iraq’s Kurdistan region. Higher utilization at Iraq’s Khor Mor gas field boosted results, as did six new wells and three recompletions in Egypt, which added 50 bn cubic feet of resources and 35 mn scf / d in production.
More on the way: “We hope to utilize our full production capacity in the coming months,” Mohammed Mubaideen, the company’s head of investor relations, told CNBC Arabia. Dana Gas currently produces about 570 mmcf / d of gas against an installed capacity of 750 mmcf / d, he said, with regional conditions limiting utilization at Khor Mor. Dana Gas has also recently inked a supply agreement with Iraq’s federal electricity ministry expanding its customer base beyond the Kurdistan Regional Government.
Sohar Freezone has signed six land-lease agreements covering more than USD 163 mn in planned investment across about 440k sqm, according to a press release. The largest is a USD 100 mn automotive and advanced-industries park that EW Partners will set up on 317k sqm, with a first phase of around 180k sqm of manufacturing plants, workshops, and warehouses.
Manufacturing takes most of the rest: Voltamp International will invest USD 39 mn in a transformer plant, and Lalan Middle East will invest about USD 12 mn in expanding its medical-device manufacturing and warehousing. Five Star Group will spend USD 10 mn on a used-clothing sorting facility serving Angola, Congo, and Tanzania, which the zone says will add cargo volumes at Sohar Port. The other two agreements are smaller storage and re-export facilities.
IN CONTEXT- The leases follow two larger projects at Sohar this year. Subsidiaries of MAK Germany and OQ are setting up a USD 550 mn PTA and PET complex with a combined 1.5 mn tons of annual capacity, using assets relocated from a shuttered plant in Rotterdam. CMA CGM and Asyad Group also signed a framework agreement to develop a USD 400 mn multipurpose logistics terminal at the port.
Lending, then flying
The Saudi Fund for Development has signed six concessional loans worth more than USD 403 mn with Syria’s finance ministry, with Crown Prince Mohammed bin Salman and Syrian President Ahmed Al Sharaa present at the signing, state news agency SPA reports. The loans cover energy, water, health, housing, infrastructure, and digital government.
The largest loans are USD 105 mn for 25 civil-defense centers, USD 100 mn for hospitals and health facilities, and USD 90 mn to rehabilitate the Aleppo thermal power plant. Smaller loans cover 300k smart water meters, the rehabilitation of 10k damaged homes, and a digital overhaul of the finance ministry.
IN CONTEXT- The loans add to a rebuild where Saudi money now reaches most of Syria’s layers — power, water, telecoms, housing, airports, and roads — without a plan connecting them. As we reported last week, the projects run through separate ministries and contracts: STC’s SAR 3 bn SilkLink fiber-and-data network, Elaf’s SAR 7.5 bn Aleppo airport, and the new flynas Syria often sit side by side with no stated link between them. With five or six foreign investors now sharing the reconstruction, no single player controls enough of the handoffs between assets to make the infrastructure work as one.
QatarEnergy is buying into a fourth offshore license in Namibia: The company has agreed to buy a 25% interest in Namibia’s offshore Petroleum Exploration License 0082 (PEL82) from Chevron Namibia Exploration II, a Chevron subsidiary, according to a press release. The companies didn’t disclose the price, and the agreement still needs regulatory approval.
Why it matters: PEL82 would give QatarEnergy a fourth Namibian license, and in every one of them an international major is the operator. The agreement adds to a position QatarEnergy has been building in Atlantic exploration over the past two years.
The license covers an area about the size of Qatar: PEL82 spans blocks 2112B and 2212A, around 11.4k sq km in water depths of 350-2.3k meters. Chevron will stay on as operator with 55% once the agreement completes, while state-owned Namcor E&P and Custos Energy will hold 10% each.
QatarEnergy holds stakes in three other Namibian licenses: It held 27.5% of Chevron-operated PEL90 as of August, according to Equinor, which bought into that license the same month. In 2024, QatarEnergy agreed to raise its stakes in two TotalEnergies-operated licenses to 35.25% in PEL56, home to the Venus oil discovery, and to 33.025% in PEL91.
It is building Atlantic exploration acreage in Brazil too: In October, QatarEnergy won a 30% stake in seven offshore blocks in Brazil’s Ceará Basin alongside Petrobras. The concession contracts are due to be signed in 1H 2027.
Terminal groundwork
Tenders are out for infrastructure works at King Salman International Airport. King Salman International Airport Development Company (KSIADC), the Riyadh giga-airport’s developer, has tendered the roads, bridges, and utility networks for Zone C1+C2 — the civil infrastructure underpinning the new Terminal 6 and its links to the existing Terminals 1-5, Meed reports. The tender went out on 26 October, with bids due 6 December.
The details: The package spans new roads, ramps and junctions, the Junction 6 and Terminal 6 bridges, and the full dry and wet utility networks, alongside enabling works and utility diversions. Two design-and-build elements are optional, among them a roughly 1.4-km access road to the Terminal 6 transport hub.
REMEMBER- King Salman International Airport is expected to handle over 100 mn passengers annually by 2030. The infrastructure, including the new Terminal 6, is being developed to accommodate this traffic, with capacity planned ahead of the expected influx of visitors for Expo 2030 and the 2034 World Cup.
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