Good morning, wonderful people. Although our Lede today is all about the regional airline industry and the odds we could see a price war this fall, Beijing is the inadvertent star of this morning’s show.
Saudi Arabia sat out Washington’s bid last week to deepen the moat around American frontier AI makers — even as the UAE, Qatar, and Bahrain signed on. Last week’s “Pax Silica” conference came just as Z.ai’s GLM 5.2 closed the gap (at least in coding and longer agentic workflows) with the latest model from industry leader Anthropic.
Meanwhile, Beijing may want a trade deal with Morocco, but Rabat isn’t so certain it’s interested in playing ball. At the heart of the dilemma: Protecting its hard-won industrial base and preserving domestic manufacturers’ access to the European Union, which is growing jittery as Egypt throws its doors open to more and more Chinese plants.
One thing we’re watching this morning: “Oman has told European officials there’s no way of going back to the pre-war status quo with the Strait of Hormuz and transiting ships may have to be charged some fees,” Bloomberg reported over the weekend.
For the nerds among us: The Global Games Show opens today in Riyadh, which bills the two-day event as the kingdom’s premier B2B gaming gathering. Developers, publishers, and investors will be on hand as the world’s richest gamer keeps piling into his big esports bet. The show is the curtain-raiser for the Esports World Cup, which opens 6 July — but in Paris, not Riyadh, making it the PIF-backed tournament’s first edition outside the Kingdom. –Patrick
The 60-day ceasefire extension signed on 17 June gave Gulf aviation its clearest path to recovery since the war began. Emirates is back to 96% of its network, and its departures are at 80% of pre-war levels, while Qatar Airways has restored 85% of pre-crisis coverage. That suggests the region’s biggest carriers are rebuilding fast.
The catch is that the operational recovery masks what could be a deeper problem, according to five aviation experts who spoke with EnterpriseAM. The planes are flying again, but the economics that made them profitable remain elusive.
They agree on the diagnosis: The Gulf hub model is being stress-tested, not destroyed. Where they differ is on how much lasting damage has been done — and whether peace, when it comes in full, will provide the stability the carriers need to stage or a new kind of competitive shock.
Trust and recovery economics will be key
The war saw airspace closures, mass cancellations, and stranded passengers. Airlines have moved past that into what Wouter Dewulf, a professor of air transport economics at the University of Antwerp, calls network triage: Every route is being assessed not just for whether it can operate, but for whether its economics still work under a fundamentally different cost structure.
“What we are seeing is not simply disruption, but a reallocation of capacity, capital, and operational focus,” Sindy Foster, principal managing partner of Avaero Capital Partners, tells us. Flexibility will be the differentiator, and the airlines best positioned now are not the largest, but those that can redeploy capacity quickly across diversified networks, says Richard Maslen, head of analysis at CAPA – Centre for Aviation.
The demand picture beneath the rebuilt networks is grim right now.April data from industry global group IATA — the most recent available — shows Middle East carrier demand down a hair over 48% y-o-y, with capacity falling more than 38% and load factor dropping to just over 70%, some 13 percentage points below the year-ago figure. That collapse was so severe that it dragged global passenger traffic growth negative, down by 3.4% y-o-y, for the first time. Exclude the Middle East, and demand grew 1.2%.
Those numbers predate the ceasefire, and things have clearly improved since, but they set the baseline from which recovery is being measured. Before Tehran and Washington inked an MoU on peace, IATA forecast in June that Middle East carriers would post a collective USD 4.3 bn loss in 2026 — a USD 11.5 bn swing from profits of USD 7.2 bn in 2025 and the only region globally in the red. That forecast assumed Brent crude averaging USD 95 a barrel and jet fuel at USD 152 for the full year, with regional demand falling 11.4% by year-end. Ultimately, it’s a question of whether the war ends or not: The prospect of peace has already brought
REMEMBER- We’ve been tracking this arc since April, when we asked whether the war would force Gulf carriers to rethink the hub-and-spoke model and zoomed in on the premium-segment yield competition, with Turkish Airlines increasingly positioning itself as the principal beneficiary.
Unpredictability complicates recovery planning for carriers: “One day there is hope of a settlement and the next day the situation escalates again… airlines cannot plan on the basis of optimism. They have to plan on the basis of resilience,” Foster says. That’s why airlines are concentrating aircraft on their strongest markets while pulling back from routes where the cost, complexity, or risk no longer adds up, Foster adds.
Trust, not airspace access, is a core issue: “Gulf carriers do not simply move passengers from two points; they orchestrate global connection flows through Dubai, Doha, and Abu Dhabi using precisely timed arrival-and-departure banks,” Dewulf says. “When airspace becomes uncertain, that hub wave structure becomes fragile,” he explains. The result? Connecting passengers lose confidence in the hub and the route underperforms, even if it is technically operational.
SOUND SMART- The “hub wave” is the tightly scheduled cluster of arrivals followed by departures that lets a super-connector like Dubai or Doha offer thousands of connection options daily. A single delayed inbound flight can ripple across an entire connecting bank — which is why hub carriers are structurally more exposed to airspace uncertainty than point-to-point operators.
Can high-margin travellers trust the GCC again? A flight can be flyable, Dewulf argues, but if passengers fear disruption, corporate travel managers hesitate, insurers price in risk, and connecting passengers avoid the hub, it still loses money. Business travel is critical for the Gulf carriers’ profitable model — and, as we previously explained, is likely to be the core travel segment that the GCC carriers will have to defend against competition from rivals like Turkish Airlines.
This is why non-Gulf carriers have yet to come rushing back into the region. KLM has extended its suspension of Dubai, Riyadh, and Dammam flights through 9 August. Lufthansa, Swiss, Austrian, and Brussels Airlines are out of the Dubai route until 24 October, and Aegean and Cathay Pacific plan to return after 31 August. Most carriers have committed aircraft elsewhere and are deep into summer booking windows. Experts we spoke with expect South Asian and regional Middle Eastern airlines will move first, whereas European and North American carriers will come back only when summer high season draws to a close.
The fuel shock complicates the math
The fuel shock is repricing the entire industry, but the pain is unevenly distributed. Fuel as a percentage of operating costs has leapt to 31% from 25.4% — an extra USD 100 bn on the global industry’s collective bill. Airlines hedged at 60-80% of fuel needs and operating premium long-haul routes have been able to recapture up to 60% of the higher costs through fare increases in 2Q — mainly via demand from high-end segments, Hans Jørgen Elnaes, an aviation analyst, us, citing Lufthansa Group's 1Q presentation.
Short-haul carriers have far less room: Competition is fiercer, booking windows are shorter, and passengers push back faster on fare hikes, Elnaes adds.
Low-cost carriers face a disproportionate hit. Fuel represents a larger share of total spending for low-cost carriers precisely because their overall cost base is lower, Dewulf explains — so a fuel spike has a proportionally stronger impact on their margins than on full-service carriers. Regional budget airlines including Flynas, Air Arabia, and Flydubai are all exposed: their model depends on high aircraft utilization, short turnarounds, and predictable rotations, all of which the current environment undermines, Dewulf adds.
All about liquidity
Gulf super-connectors entered the crisis with unusually strong balance sheets, and that — along with state backing — is what separates them from the rest of the industry. If the war continues for months, financial results will be heavily impacted, Dewulf says, but he does not see business continuity risk for Emirates, Qatar Airways, or Etihad given their government backing.
It’s all about access to capital: “Resilience is ultimately a function of cashflow and access to capital,” Foster says. “Airlines with strong cash generation, supportive shareholders, and financing access have more options… The longer uncertainty persists, the wider the gap is likely to become between carriers with strong balance sheets and those operating with limited financial flexibility,” she adds.
Weaker airlines have already failed, restructured, sought new capital, abandoned growth plans, and withdrawn from markets as a result of the combined operational, financial, and economic pressures, she explains.
That’s why the first casualties will definitely not be the Gulf heavyweights. Dewulf names specific carriers he considers at risk in Europe: Tarom, airBaltic, and Norse Atlantic. Spirit is the example in the US, as an already financially fragile player before the fuel shock hit. The war does not need to be the sole cause of failure, Dewulf argues. It can be the final blow that exposes a business model that was already cracking.
Crises rarely create novel weaknesses as much as they reveal them, Foster tells us. The airlines with the least flexibility are the most exposed: smaller carriers, highly leveraged operators, those with weak balance sheets, and low-cost carriers whose economics require tight cost control.
The paradox of peace
Most outsiders figure that the war ends, flights come back, and everything returns to normal for the airline industry. The experts argue that the sequencing is more complicated — and potentially more disruptive — than that.
Dewulf’s scenario is a post-war supply shock. Once Gulf carriers put large amounts of capacity back into the market — particularly on Europe-Asia, Europe-Africa, and Asia-Africa routes — the result could be a price war that pressures margins across the board.
Why? Carriers will be looking to lure back the type of passenger that shifted to direct services or alternative hubs — and they’re going to be attracted by cheaper fares and restored connectivity through Dubai, Doha, and Abu Dhabi. That’s a margin hit in the near term for Gulf carriers — and would put a squeeze on European and Asian carriers that temporarily benefited from reduced Gulf competition, Dewulf says.
Foster arrives at the same conclusion, but from a slightly different angle. Even after hostilities ease, airlines will still be dealing with elevated fuel costs, higher insurance premiums, aircraft availability constraints, weakened balance sheets, and more cautious travelers, she tells us. In many cases, carriers will be rebuilding networks and restoring confidence while still bearing the financial consequences of a prolonged disruption.
And some wartime adaptations may outlast the war itself. Foster points to shifts already underway in fuel supply chains — Nigeria emerging as a supplier of Jet A1, for instance — as examples of how markets respond when operators seek supply security and reduced Gulf dependence. What begins as a temporary adjustment can become a permanent change in sourcing, logistics, and supply-chain strategy, she argues. The question, applied to aviation, is how much of the traffic, routing patterns, and corporate travel policies that shifted during the war will revert, and how much has been permanently rerouted.
Garth Lund, founder and CEO of Switzerland-based Alpcor Aviation, doesn’t see a supply shock or long-term high costs — and predicts the recovery sequencing will be uneven by carrier geography. For Gulf airlines, recovery is operational: flights, crews, aircraft, and confidence need to be rebuilt in sequence, with outbound Gulf demand and transit traffic likely to recover first. Inbound leisure demand will take longer. Summer is already the low season for inbound Gulf leisure, which gives the region a narrow window to rebuild, he explains. For non-Gulf carriers, the first benefit will be financial — lower fuel costs, better margins, stronger cash flow — rather than a dramatic capacity rebound, he tells us.
And if the war continues? The real pain for the broader industry could begin in 4Q and deepen into 1H 2027, Elnaes argues. The chain: Continued undersupply of jet fuel pushes spot prices higher, drives prices up, erodes consumer and corporate spending power, and eventually triggers stagnation or outright decline in demand. That’s when the weaker carriers would face a true survival test.
The US is corralling its allies into an AI supply chain that routes around China — just as China’s own open-weight models catch up to models made by US-based frontier companies like Anthropic, OpenAI, and Google. Most of the Gulf has signed on, but Saudi Arabia — perhaps tellingly — has not.
What happened? At the second Pax Silica summit in Washington, which ended this past Friday, the UAE, Qatar and Bahrain put their names to a new Joint Statement on AI Opportunity, a pledge drafted by the State Department that reads like something cooked up by a lobbyist for a frontier model maker. With 35 countries now signed on, the aim is to keep cutting-edge AI chips as well as minerals and energy moving among trusted partners and away from Beijing.
The UAE and Qatar were already among the 24 members of the Pax Silica Declaration itself, while Bahrain has signed only the new joint statement. Saudi Arabia signed neither.
The timing is interesting: The Gulf signed on in the same fortnight that Washington hobbled its own best models — forcing Anthropic to cut off Fable 5 and Mythos two weeks ago (it restored only partial access to Mythos 5 on Friday) while OpenAI is sharply limiting access to its newest model, GPT-5.6, to keep the White House happy.
Then Z.ai shipped GLM-5.2. The open-weights model is nearly as capable as Anthropic’s best in many respects — but costs maybe an eighth of Claude Opus 4.8’s on some tasks. Anyone, anywhere, can use GLM 5.2. The LLM is strongest at code and agents — the Wall Street Journal found it matched Mythos on cybersecurity — but still trails top US models elsewhere. Experts put China six months behind, or less; six of of the 10 most-used models on OpenRouter, a key provider, are now Chinese.
SOUND SMART- What does “open-weights” mean? A model’s “weights” are the bns of values it learns in training — they are the model. “Open-weight” means the maker publishes them, so anyone can download the model, run it on their own hardware, fine-tune it, and use it with no gatekeeper and no off-switch the maker can pull. That’s the opposite of the closed, rent-by-the-API models from OpenAI and Anthropic, where the provider — or its government — can cut you off, as Washington just did.
Why that matters: For a Gulf (or European or Asian or African…) buyer chasing sovereignty and lower cost, ownership is the whole appeal. For Washington, it’s the danger: An open model, once released, can’t be recalled — and the best open ones now come out of China.
This is the bind the Gulf faces. The region’s whole AI play — predicated on sovereign compute, cheap inference, abundant (cheap) energy, and local champions — has every reason to run the cheapest capable open-weights models it can find. The best of those are increasingly Chinese. Washington’s own statement blesses “open and closed-source models,” just … not China’s.
That’s why Saudi Arabia’s absence is particularly interesting. The UAE bought its place in the US camp the hard way: To secure the Nvidia chips its data-center ambitions depend on, G42 agreed to rip out its Chinese technology, Huawei gear included, as the price of a USD 1.5 bn Microsoft deal in 2024 and continued access to American silicon.
Saudi Arabia has made no such clean break. Humain is pouring bns of USD into compute, and Aramco’s venture arm, Prosperity7, was the first foreign firm to back a major Chinese AI champion when it joined a USD 400 mn round for Z.ai — then called Zhipu AI — in 2024. (Saudi has also taken stakes in OpenAi, Anthropic, and SpaceX.)
The UAE has tied itself to American hardware and cut China loose. Saudi is buying US chips while keeping a stake in China’s frontier, setting up the question that Pax Silica hasn’t yet answered: What happens to a tech alliance when the cheapest, fastest-improving models come from the country that alliance was built to shut out?
Laying the groundwork for free trade agreement? Morocco and China signed three customs agreements on the sidelines of the World Customs Organization’s annual session in Brussels, in what could be viewed as a preparatory groundwork for a trade agreement that Beijing has already formally requested.
The agreements cover fraud, clearance, and port modernization. The first creates a legal framework for joint action against customs fraud, under-invoicing, and false declarations. The second gives mutual recognition to Morocco’s Authorized Economic Operator (AEO) program and its Chinese equivalent — meaning faster clearance and fewer inspections for businesses trading between the two countries. The third pairs the Port of Casablanca directly with China’s Port of Ningbo — the world’s busiest cargo port by tonnage — on modernization, risk management, and staff training, Morocco World News reports.
The agreements come amid a carefully crafted Chinese push across Africa. In May, Beijing’s zero-tariff policy for 53 African nations, including Morocco, took effect, eliminating import duties on Moroccan goods entering China. The measure is unilateral and temporary, running until 2028, and is meant to fast-track bilateral FTA pacts across the continent.
And Morocco appears high on Beijing’s priority list. China has formally asked Rabat to sign a bilateral FTA that would make Morocco’s zero-tariff access permanent, while requiring it to reciprocate. Morocco’s industry minister, Ryad Mezzour, told Bloomberg the proposal is “under reflection,” with an impact assessment underway, but no formal negotiations started.
Rabat is cautious. Bilateral trade between the two nations is heavily lopsided in China’s favor, accounting for USD 10 bn of the USD 11 bn in two-way trade they exchanged. Consumers would benefit from lower tariffs on Chinese goods, but Morocco needs to make sure that there’s a market on the other side worth opening up to. Otherwise, it’s starting down a widening trade deficit as well as pressure on local investors and its coveted, widening industrial base.
The most important question that Morocco needs to answer is what an FTA with China could do its EU access. Chinese EV and battery manufacturers are already building rapidly in Morocco (look at Gotion High Tech's gigafactory near Kenitra, BTR New Material's anode plant in Tangier, and the 34 Chinese firms now signed on at the Mohammed VI Tanger Tech City).
The buildout is already making Europe anxious, with the EU Trade Commissioner Maroš Šefčovič flagging Chinese production in North Africa as a concern for European industry. With Europe being Morocco’s largest trading partner (some EUR 25.5 bn of Moroccan products entered the EU last year), Morocco needs to avoid the EU’s trade defense mechanisms.
What’s next: The zero-tariff window runs until April 2028, giving Rabat time, but also a deadline. Mezzour has conditioned any progress on consultations with industry and an assessment of implications for Morocco’s existing trade agreements with the EU, US, and Turkey.
Iraq launches crackdown on corruption: Iraqi security forces detained 47 politicians, lawmakers, and government officials in dawn raids across Baghdad on Sunday — a very high-profile anti-corruption operation under the newly minted Prime Minister Ali Al Zaid, Al Jazeera and The National report. The arrests included five MPs, deputy oil minister Ali Maarej, and several others who are reportedly close to former PM Mohammed Shia Al Sudani.
IN CONTEXT- Al Zaidi flagged corruption as a core priority within weeks of taking office after disclosing that he was offered a bribe to cover up embezzlement in the Oil Ministry, which led to the arrest of the deputy oil minister for refining, Adnan Al Jumaili, whose confessions reportedly triggered yesterday’s arrests campaign. Iraq also recently canceled a USD 764 mn PPP contract to modernize Baghdad airport, citing corruption concerns.
The crackdown is Al Zaidi’s most visible early play, and it’s happening against a brutal fiscal backdrop. Iraq ran a USD 5 bn (IQD 6.7 tn) deficit in the first four months of 2026. Public-sector salaries accounted for more than half the bill at IQD 20.5 tn, while oil revenue came at about IQD 26 tn — a fraction of what Baghdad planned. The prior budget assumed output of around 3.4 mn bbl / d, but production has collapsed to roughly a third of that level while Hormuz remained largely closed.
The bigger problem? There is still no updated budget, and the delay has consequences beyond optics. Legislators have put forward a stopgap spending plan of IQD 20-30 tn designed to fund basic government operations and honour existing contracts, but Al Zaidi's cabinet, which has met only a handful of times since mid-May, has not moved yet on a new budget.
The US and Iran agreed overnight to stop shooting at each other, setting up the latest fragile standdown on the Strait of Hormuz and leaving us to hope that things will stay quiet enough to get the two sides into a room in Doha tomorrow (Tuesday). A senior US official told Axios, which broke the story, that the US had decided “to stop all the kinetic activity.” It’s a sign of how little the 17 June memorandum is holding after an IRGC drone hit the Ever Lovely last Thursday, setting up US strikes the next day, and a tit-for-tat strikes that ran through the weekend.
Watch this space: Tehran has yet to confirm that it agrees this latest round of “kinetic activity” is over.
Still, oil traders welcomed the Axios report:Brent had eased to USD 69.92 / bbl as of our dispatch time this morning — that’s back to pre-war levels, for those of you keeping count.
Aramco is moving fastest to restore production and shipping: It resumed loading at Ras Tanura on Friday after a near-four-month halt. Two days later, an Aramco helicopter crashed at the terminal, killing all 14 on board, all of them Saudi nationals — the cause is under investigation.
Qatar is pushing too, sending tankers back through Hormuz as it continues working to get its Ras Laffan plant fully back online. Repairs there continue, and a deadly 21-22 June gas blast left export capability untouched, Doha said.
The big question: Vessels are leaving the Gulf — but they’re ships that had been stuck since the start of the war. What matters next is how many owners agree to send back in to load up with fresh cargoes.
IN CONTEXT-OPEC+ meets 5 Julyto discuss quotas, its seven-nation core having added 188k bpd for July at its meeting earlier this month.
SIGN OF THE TIMES- Sheikh Abdullah bin Zayed took acall from Iran’s foreign minister this past Friday in which bin Zayed pressed Iran on freedom of navigation through Hormuz. It’s the first publicly acknowledged contact between the two foreign ministers since the war began.
Egypt’s anemic privatization drive has gotten a passing grade from the IMF, putting Cairo on track to get c. USD 1.6 bn in Extended Fund Facility money once the IMF’s executive board meets this summer. It seems the IMF was happy with Taqa Arabia taking a 10% stake in 172 military-affiliated Wataniya fuel stations (the first partial sale of a military-linked asset) and Alcazar Energy’s USD 420 mn deal to run the Gabal El Zeit wind farm. That leaves one more IMF review to go before year’s end before the IMF program winds down.
The temporary-listing theatre continues alongside it. Enppi, Petroleum Marine Services and Elab shares were listed on the EGX yesterday, taking the roster of temporary listings to 20 and setting up a 4Q deadline for the companies to start trading or get an extension on the listing.
We don’t like this much at all: The listings are needless staging, not substance. What’s real is whether the state actually puts shares in front of investors — and whether those investors buy.
DataVolt is three months from financial close on its USD 500 mn Riyadh East data center, with banks set to fund roughly 75% of the cost after Humain signed up to take more than 80% of capacity — a 36 MW commitment of the site’s 44 MW, CEO Rajit Nanda tells us. DataVolt, founded by Vision Invest and chaired by ex-Acwa Power chief Paddy Padmanathan, is bolting decades-old power-and-water project finance onto AI infrastructure with international and Saudi banks now in a competitive process for the debt.
The Riyadh build is just the first of DataVolt’s ambitions: Nanda tells us it is in advanced talks with major Western data-center operators to anchor the first phase of a 1.5 GW AI campus at Neom’s Oxagon — roughly 240 MW expected next year, around USD 2.5 bn of its own investment and some USD 10 bn in total value once customer-owned compute is counted. Last week, the company reached financial close on a USD 250 mn, 12 MW facility in Tashkent it’s treating as the funding template.
Nigeria has drawn the first USD 1.5 bn from its USD 5 bn total return swap with First Abu Dhabi Bank, Bloomberg reports. The pricing undercut Abuja’s own eurobonds, which is the appeal: refinance pricier USD debt as oil softens and the FX squeeze bites. The IMF and Fitch are already flagging fiscal and currency risk, saying Nigeria hasn’t disclosed enough as a Gulf bank becomes a frontier sovereign’s lender of choice.
Saudi’s Fakeeh Care Group lined up SAR 2.2 bn across two shariah-compliant facilities to fund expansion — SAR 1.25 bn from Saudi National Bank and SAR 950 mn from Saudi Awwal Bank. Fakeeh has just cleared antitrust signoff on its full buyout of Al Fagih, suggesting that Fakeeh’s hospital roll-up play still has legs.
European debt for Egypt fertilizer complex: Singapore-based Indorama is closing in on a combined USD 348 mn debt package from the IFC and EBRD to fund a USD 525 mn greenfield phosphate fertilizer complex in Ain Sokhna. The plant, a JV with state-owned Phosphate Misr (15% equity, 20% of output in exchange for feedstock), will turn out 600k tons of phosphate fertilizer a year.
EFG Hermes’ K-12 arm Mindspire is looking to acquire as many as 15 Saudi schools within three years as the Saudi Education Fund behind it has raised north of USD 200 mn against a USD 300 mn target and already deployed over half across six schools in roughly a year, a company official tells us.
Gems Education is pushing the other way — deeper into India. The Dubai-based operator is committing up to USD 30 mn over three to five years to 30-plus owned schools and a 1k-plus branded partner network, Economic Times reports.
Mindspire isn’t the only Egyptian name chasing the Kingdom: Beltone Venture Capital is pushing two of its portfolio companies — furnishings brand Ariika and F&B chain Lychee — into Riyadh with a combined five stores, it said in a statement.
Saudi small-cap listings keep coming, even if they’re a sideshow. Masqa Investment’s Nomu float landed 144.6% oversubscribed, it said in a Tadawul disclosure, even as bigger names were shelving main-market IPO plans. The pipeline for Saudi’s baby bourse also includes radiation-therapy operator BaraSeen Medical (which just won CMA approval to float 17.1%), with Qemah and Mayar Holding’s Ziorak lining up behind.
ALSO WORTH KNOWING THIS MORNING
Emirates NBD raised USD 1.5 bn through a five-year senior unsecured private placement priced at 5.125%, with JPMorgan serving as bookrunner, Zawya reports. It’s the latest Gulf bank to pick up capital in one form or another, joining FAB and Dubai Islamic Bank, who were in the market last week.
France’s AFD, the European Investment Bank and the EU are mobilizing around EUR 459 mn into Egypt, the AFD said — the finance-relevant pieces being a EUR 210 mn blended facility lent through Egyptian banks to decarbonize 30-plus industrial firms and a EUR 50 mn National Bank of Egypt credit line for agri-SMEs.
Remember how we suggested that infrastructure — more of it, in more verticals, with more redundancy, going to more places — would be the big Gulf investment theme of the next decade? Here’s the latest:
The UAE is angling for a piece of Syria’s logistics corridor, too. Abu Dhabi and Damascus have begun talks to link Syrian ports with Iraq’s Umm Qasr and onward to Khalifa Port in the UAE. Discussions also included possible investments in Syrian free zones, dry ports in Damascus, Aleppo, and Homs, and a proposed logistics hub at the Al-Tanf border crossing. The move comes just a week after AD Ports launched a Khalifa-Umm Qasr service aimed at connecting the Gulf with Turkey and Europe.
The UAE is now the second GCC heavyweight to map out a Syria land bridge. Saudi Arabia has been pushing the Hejaz railway revival through Jordan and Syria as its own bypass play, we reported last month. The Emirati approach is port-to-road; Saudi is focused on, but might explore road, too.
Capitalizing on Syria’s land bridge potential between Europe and the GCC will mean addressing significant friction points, as we unpacked in our April deep dive. Current challenges include back-to-back transfer mandates, aging truck fleets locked out of cross-border movements, patchy insurance, and armed escort costs that eat into any geographic advantage.
And over in Egypt, the UAE’s Fujairah project to expand storage capacity in Al Hamra port could be operational by the end of the year, a report suggests. The USD 457 mn expansion is being developed in partnership with the Egyptian state-owned Wepco and is set to more than double the storage capacity at Al Hamra Petroleum Port in New Alamein to 5.3 mn barrels, up from the current 2.5 mn barrels.
Egypt has big plans for Al Hamra, aiming to lift the port’s storage capacity to 20 mn barrels of crude oil and 400k tonnes of products by 2030. A new pipeline linking the Midor refinery to Al Hamra in 2H this year will close a two-way loop, letting Egypt import crude, refine it domestically, and re-export higher-value products. Fujairah started working on its USD 3 bn oil logistics zone at Al Hamra Port last October, following three agreements the Oil Ministry signed with the Emirate of Fujairah.
Jabal Omar offers first Saudi properties to foreign buyers
Egypt’s declining fertilizer tariff suggests supply constrains are easing
Do World Cups really raise real estate prices in host cities?
Saudi Arabia’s Jabal Omar Development is wasting little time capitalizing on the Kingdom’s newly finalized foreign property ownership rules, disclosing plans to put more than 400 serviced residential units in its flagship project in Mecca on the market this year. The developer is also moving forward with the seventh and final phase the project, according to a Tadawul disclosure.
Why now? The announcement comes just days after the Saudi Cabinet approved the long-awaited executive regulations for the Law of Real Estate Ownership by Non-Saudis. The rules designate areas of Riyadh, Jeddah, Mecca, and Madinah where foreigners can buy and the Real Estate General Authority has begun accepting ownership applications through the Saudi Properties platform.
Inflation pains grow in Iran: June Inflation came in at 88.6% y-o-y in Iran as the war compounds the country’s longstanding. Food prices were among the hardest hit, with prices more than doubling during the period between the period 22 May to 21 June (the Persian month of Khordad), Al Arabiya reports, citing data from the Statistical Center of Iran.
Background: Cost of living has been one of the key issues that drove mass protests in Iran last December, with annual inflation recording 52.6% then. Immediately before the war, y-o-y inflation was at 68%.
Iran’s economic woes strengthens the case for economic incentives during the US-Iran talks. The Iranian regime is facing a staggering rebuilding bill at a self-proclaimed estimate of USD 270 bn due to damage caused by the war, and the political future for the current leadership overseeing negotiations may hinge on their ability to show quick results for Iranians on living standards amid growing pressures from regime hardliners who are against ending the war.
REMEMBER- Iran is angling for massive sanctions relief. Some of the major incentives floated so far, besides lifting oil sanctions, include a USD 300 bn investment vehicle and unfreezing up to USD 100 bn of Iranian assets abroad, possibly starting with some USD 6 bn of frozen oil revenues currently in Qatar.
It was good while it lasted
Hormuz tailwinds for Egypt’s fertilizer exports are slowing down: The Egyptian Investment Ministry is ditching its flat export fee on nitrogen fertilizers in favor of a dynamic 10% duty linked to the free-on-board value, according to a decree published in the Official Gazette. The decision is a clear response to falling fertilizer rates in June — repealing the flat USD 90 per ton fixed export fee that was slapped on the sector back in May to capture a slice of the massive windfall local producers were generating after the closure of the Strait of Hormuz choked off rival Gulf suppliers.
World Cup real estate windfall? Property values in 2026 World Cup host cities has risen at an average of 44% since the event was awarded to the US, Canada, and Mexico in 2018, Arab News reports, citing an analysis by the London-based wealth management platform Enness Global. Cities that have been largely off investors’ radars as go-to real estate markets were the biggest beneficiaries.
Why does it matter? The next two World Cups are taking place in our region — raising the question of whether that juices prices. Six Moroccan cities are co-hosting the 2030 competition alongside Portugal and Spain, and Saudi Arabia is hosting the following iteration in 2034.
The unanswered question: What happens to prices when the fans go home next month?
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