Iraqi PM postpones Saudi trip after joint US-Saudi strikes on Iraqi soil

Good morning, all. We kick off the week with the first hard data from the Hormuz disruption, and it tells two stories. Saudi GDP contracted at its sharpest annual pace since the pandemic in 2Q, but higher oil prices padded the treasury enough to shrink the deficit to a yearly low. We also track Saudi Arabia’s new 43-country maritime coalition for the Red Sea, and PIF’s record-sized leveraged buyout clearing for closing.

A little war update before we dive in: US President Donald Trump said that the US has “been asked by Iran, and other Middle Eastern countries, to hold off any attack in that the perimeters of a deal has been agreed to.” Trump said the agreement would include the complete opening of the Strait of Hormuz and an end to Iran’s nuclear threat.

Riyadh-Baghdad ties strained

Iraqi Prime Minister Ali Al Zaidi will postpone a planned trip to Saudi Arabia following the US-Saudi strikes on Iraq, CNN Arabic reports, citing a government source. Meanwhile, Baghdad demanded evidence for Saudi claims that Iran-backed groups operating from Iraq launched drone attacks targeting Saudi critical infrastructure on Monday and Tuesday.

REMEMBER- US-Saudi strikes on Iran-backed targets in Iraq escalated the conflict with deeper implications across the region, analysts told The Guardian. The two parties joined forces to attack Iraqi armed groups in retaliation for drone attacks on Saudi oil facilities. Iraq’s Popular Mobilization Forces said the strikes killed at least 20 fighters and wounded 32.

The US claims it was organized with Iraq, Baghdad denies: US President Donald Trump said the strikes were coordinated with Iraq, while Baghdad says it had no “prior knowledge” of them. Government spokesperson Haider Al Aboudi said Iraq didn’t greenlight attacks against any sites or groups inside its territory, considering such actions as violations of its sovereignty and deliberate targeting of its official institutions, The Guardian reports, citing the Iraqi News Agency.

The Kingdom’s attacks targeted only militant groups with no intention to harm the Iraqi government or people, a Saudi official told Al Arabiya. The strikes hit militia military warehouses connected to recent drone attacks on Saudi infrastructure, the official said.

The escalation comes as Iraq struggles to prevent the US-Iran conflict from spilling across its borders. The country was heavily affected by the closure of the Strait of Hormuz, through which most of its oil is exported, while its governments have long sought to balance ties with Washington and Tehran.

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GCC weighs region-wide logistics platform

The GCC General Secretariat is reviewing a proposal to create a unified digital platform linking logistics services across the six member states, the Kuwait Chamber of Commerce and Industry told Al Eqtisadiah after it submitted this proposal. The proposal has been referred to ministerial committees for review before any implementation decisions.

What it would do: The platform would connect shipping companies, importers, exporters, warehouse operators, ports, and logistics zones, while providing real-time data on port capacity, transport costs, customs procedures, storage availability, and freezones. It would also include AI-powered route and service matching, allowing users to compare logistics options across sea, land, and air. A pilot phase is planned before any wider rollout.

Why it matters: The Hormuz crisis has highlighted the lack of a coordinated Gulf logistics system, with cargo rerouted through ad hoc bilateral arrangements and emergency measures. A shared platform could make capacity and routing options more transparent across the GCC, although the proposal must first clear ministerial review, and GCC integration projects have often taken years to move from agreement to implementation

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The big story abroad

No single story is dominating international headlines this morning — among those receiving top billing:

#1- Most of the 60k North African migrants who illegally crossed into Spain’s Ceuta have made their way back to Morocco, citing severe hunger, lack of shelter, and hostility from local authorities and residents that made remaining unbearable.

#2- FIFA President Gianni Infantino’s future with the football governing body could be in trouble after he pulled the plug on a plan to create a commercial entity to take over the World Cup and sell a stake to investors. The proposal was met with heavy criticism from fans, lawmakers, and other football governing bodies and accusations of selling out.

#3- The aftermath of the selloff: Following a severe collapse in South Korea’s stock market, the benchmark Kospi index fell around 40% from its June peak due to a semiconductor selloff and volatile single-stock leveraged ETFs, South Korean retail investors are directing their anger at President Lee Jae-myung and financial regulators. Many investors are vowing to exit the market after incurring massive losses.