Good morning, all. The war didn’t slow over the weekend, but it hasn’t reached the checkout. Saudi inflation held at 1.9% in September, the first reading since the Houthi escalation began, and the cushions we pointed to last month — the riyal’s peg, state-set fuel and utility prices — did their work. Rents are cooling and cost pressure up the chain is easing.
Humain, meanwhile, is out to bid on its next Riyadh data centre, a potential USD 1 bn build that is one brick in the 6 GW AI campus it is assembling in Al-Saad.
One for the road: AlShrouq Express is readying drone trials and pushing forward with the autonomous vehicles it piloted years ago, testing whether taking the driver out of the last mile pencils out.
Humain, meanwhile, is out to bid on its next Riyadh data centre.
WEATHER- Rain, rain, and more rain: Most of the Kingdom is in for thunderstorms through Wednesday, and early forecasts suggest the wet spell could continue in some regions until the end of next week, according to the National Center for Meteorology (pdf). Moderate to heavy rainfall is forecast for Jazan, Asir, Al Baha, and Makkah, with warnings of downdraft winds, hail, rough seas, and flash floods.
War Watch
Egypt is getting ready to defend Saudi Arabia. President Abdel Fattah al-Sisi told the parliament to hold an emergency session to authorize Egyptian intervention in defense of the Kingdom “if asked,” speaking at a military graduation ceremony, and stressed that Egypt is seeking only to defend, with no intention of attacking or fighting (watch, runtime: 32:47). Cairo already pledged its support for Riyadh without any reservation last week.
Riyadh and Cairo are also talking money: Egypt is negotiating to renew USD 5.3 bn in Saudi deposits at its central bank that fall due this month, an official told Asharq Business, with the length of the extension still open. The kingdom holds another USD 5 bn in short-term deposits renewed annually, taking its total to about USD 10.3 bn.
A defensive line is forming around the Kingdom, with few partners willing to cross into Yemen. On top of Egypt’s offer to come to Saudi Arabia’s defense, Turkey and Pakistan have pledged forces for rapid deployment inside the Kingdom under the Makkah Defense Pact, though Ankara has ruled out joining any offensive operations, while Damascus is still weighing whether to offer defensive support. That leaves Washington as the only partner publicly considering offensive action, with Trump saying the US “may” join Saudi strikes on the Houthis.
The exchanges continued on both sides of the border. The Saudi-led coalition intercepted and destroyed two drones, one over the Eastern Province and one over the Riyadh region, as well as two ballistic missiles fired by the Houthis toward Khamis Mushait. Inside Yemen, the Houthis said they shot down a Saudi armed reconnaissance aircraft over Hajjah, and claimed Saudi Arabia conducted 53 airstrikes on Taiz, Ibb, Lahij, Saada and Amran.
Meanwhile, the Houthis struck the Al-Maashiq presidential palace in Aden, the seat of the Saudi-backed government, killing five people and wounding 16. It was the first hit on the palace in this round of fighting, and the prime minister and cabinet were unharmed. The group also said it shot down a Typhoon fighter jet over Saada and a drone over Marib. Across the border in Saudi Arabia, the Houthis said they downed an Apache helicopter near Najran.
Are the holy cities a target? The coalition said it intercepted a cruise missile over Madinah, the first time the fighting had reached either of Islam’s two holiest cities. The Houthis denied firing at Madinah and said both it and Makkah were exempt from their warning that Saudi airspace was unsafe
International bodies lined up behind Riyadh: The UN Security Council condemned the Houthi attacks “in the strongest terms,” called them “reckless”, and affirmed Saudi Arabia’s right to self-defense under international law. The International Civil Aviation Organization’s (ICAO) governing council also condemned the strikes on civilian airports, aircraft and aviation infrastructure in Saudi Arabia.
The calendar keeps emptying
More events get pushed or cancelled: The EU postponed its summit with the Gulf Cooperation Council (GCC), originally set for 24 October in Saudi Arabia, according to a press release (pdf). The Asian Tour shelved its season-ending PIF Saudi International, due 18-21 November, indefinitely, citing “organisational and logistical challenges,” and the Union Cycliste Internationale (UCI) said the Urban Cycling World Championships, scheduled for 3-7 November in Riyadh, “will not proceed.”
REMEMBER- The Kingdom is working to keep its business and sports calendar intact. Riyadh is opening the flagship Future Investment Initiative to remote attendance, after the chief executives of ExxonMobil, TotalEnergies, Shell, and BP skipped last week’s World Petroleum Council Energy Congress. Our hosting of the Asian Cup in January next year will test whether the major sports calendar holds.
A crude return
Saudi Oil exports surpass pre-war levels as the East-West pipeline recovers. Crude exports averaged 8.1 mn bbl / d in the first half of October, exceeding the 7.2 mn bbl /d for February, according to TankerTrackers. The rebound was supported by pipeline flows that returned to about 5.8 mn bbl / d of its 7 mn bbl / d capacity after a September attack halted loadings at Yanbu. Production rose 744k bbl / d m-o-m to 8 mn bbl / d in September, Opec’s monthly report (pdf) shows.
“The Hormuz Shuffle [the Saudis] are doing is working for now,” market analyst and Sandstone Group CEO Stuart Turley tells EnterpriseAM, adding that the Kingdom has shown it can repair the pipeline quickly.
The recovery is coming at a cost: Higher fuel use and tight tanker availability are pushing up shipping costs. “[Saudi Arabia] will be forced to discount their oil to offset the higher tanker fees. But it will be better to get an order for cashflow, than hold out for market prices,” Turley says.
MEANWHILE- The Kingdom is exploring additional overland routes to Europe and aims to increase pipeline export capacity to 10 mn bbl / d while discussing with Kuwait is a proposed Saudi line running to the Red Sea that could serve both countries
Funding Syria
Saudi money is about to start flowing into Syria’s rebuild. Riyadh and Damascus will sign a first USD 406 mn financing package “within days,” the opening phase of up to USD 1.5 bn in Saudi-funded projects under discussion for the coming months, Syrian Finance Minister Mohammed Yasser Barnieh told Asharq Business at the IMF and World Bank meetings in Bangkok. The soft loans from the Saudi Fund for Development would go to energy, health, housing, roads and services to help refugees return.
REMEMBER- These financing discussions build on Saudi broader push to support Syria’s multi sector reconstruction. Saudi entities signed deals spanning airport redevelopment, telecoms, desalination, real estate and roads, including the SAR 7.5 bn Aleppo airport project, a SAR 3 bn STC telecoms project, USD 2 bn in Abyat developments, and a USD 300 mn roads contract.
Land for a stake
Saudi Arabia is moving to operationalize its Cabinet-approved land-for-housing swap, with draft rules out for public comment until 10 November on Istitlaa, according to an announcement. The Municipalities and Housing Ministry will be able to offer land earmarked for housing support programs to an investor picked through a public tender. The investor would develop the plots and take a share of the land in return.
Investors can be paid three ways: usufruct rights over a share of the developed land for a set period; ownership of a share capped at 20% of net developed area, a limit the housing and finance ministers can jointly waive; or ownership of part of the land in exchange for developing the site and building Developmental Housing units, with a portion handed back to the ministry to dispose of under current rules.
REMEMBER- The Cabinet approved an amendment allowing private developers to join these projects in August. The Kingdom wants to move idle plots, some unused for years because of financing constraints, Sultan Al Osaimi, a real estate valuation fellow at Taqeem, previously told us. He expects ownership allocations to be determined by the nature and economic value of each project.
Making room at Jeddah airport
Jeddah’s airport is moving all its North Terminal flights. Starting yesterday, every flight that had operated from King Abdulaziz International Airport’s North Terminal shifts to the new Terminal 4 and the Hajj and Umrah terminals, Jeddah Airports said in a statement, completing a transition that began in late September. Travellers are being told to confirm their departure terminal with their airline before heading to the airport.
It’s a capacity play: Terminal 4, a 97k-sqm building that started phased operations last month, can take up to 15 mn passengers a year. Pulling the North Terminal’s traffic into it feeds the Kingdom’s goal of lifting King Abdulaziz International Airport — which handled a record 53.4 mn passengers in 2025 — past 90 mn a year by 2030.
PSA
Own a Ford or Lincoln car? You might need to bring it in for repairs. The Commerce Ministry has recalled more than 3k vehicles over a faulty exhaust gas recirculation valve that can weaken acceleration and cause loss of power while driving, according to a statement. The recall covers 2025 Ford Explorer and Taurus, as well as Lincoln Nautilus and Corsair models. Owners can check whether their car is impacted by entering their VIN on Recalls.sa.
Data point
SAR 159.1 bn — that’s how much foreign direct investment flowed into Saudi Arabia in 2025, up 33.5% y-o-y, according to the General Authority for Statistics (Gastat) data (pdf). But outflows nearly doubled to SAR 77.7 bn from SAR 39 bn in 2024, leaving net inflows up just 1.7% y-o-y at SAR 81.4 bn. Construction led with SAR 34.5 bn, accounting for 21.7% of total inflows, followed by manufacturing at SAR 33.4 bn and administrative and support services at SAR 22.4 bn.
REMEMBER- Preliminary quarterly data had put 2025 net inflows at SAR 122.4 bn, with outflows of SAR 10.9 bn, as we reported in April. The Kingdom is targeting annual inflows of SAR 388 bn by 2030, or 5.7% of GDP.
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The big story abroad
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