Good morning, friends, and happy Friday to you all. We have an AI-heavy issue for you this morning, including a look at how the technology is playing in the wartime slowdown in hiring across the GCC. We’re also skeptical of the notion that G42, the UAE’s state-controlled AI champion, is about to rebadge as American and become majority US-owned.
Also from The Matrix: Beijing is trying to steal a march on Washington, launching the World Artificial Intelligence Organization (WAICO), in Shanghai late yesterday on the eve of a major Chinese AI gathering. Some 29 countries have so far joined the Shanghai-headquartered group, all of them emerging markets. Algeria and Oman are the only Arab countries to have signed up so far.
Why it matters: While Washington has taken a largely hands-off and America-first approach to AI regulation, Beijing wants to play a major role in global governance of the technology. In remarks earlier this morning, Xi pushed for human oversight of AI, saying it represents both a huge opportunity and a threat to humanity. He called on governments to work together to “navigate a world where humans live alongside thinking machines.”
Weekend project for our fellow AI nerds: Go check out Moonshot AI’s Kimi K3, a massive 2.8 tn-parameter model built for coding, research, and other long-running agentic tasks. The Chinese open weights model has kicked the fanboys on X into high gear. Less hyperbolic folks are more measured, but impressed. (And K3 still doesn’t want to talk about Tiananmen Square or 9/11…) –Patrick
Hiring in the UAE contracted for the first quarter in more than four years. Cooper Fitch's 2Q 2026 Gulf Employment Index, seen by EnterpriseAM, puts UAE hiring activity down 4% q-o-q in 2Q, the sharpest fall in staffing levels since August 2020. But the behavior behind this figure is much more nuanced: Companies are running searches to the very end and then not hiring anyone.
“They are recruiting right up until the final stage, but not making the final hire,” Cooper Fitch CEO Trefor Murphy tells EnterpriseAM. He describes a holding pattern that has now dragged on for months. Initially, the thinking was that this trend would come to and end in June, which then became July, and is now more open-ended.
What’s behind this pattern? The cause, Murphy tells us, is less any single shock than the stop-start rhythm of the US-Iran war. “Nothing kills confidence like uncertainty,” he says. “We went from a military conflict to an MoU on a peace process, and then [the strait] was blocked, unblocked, blocked, and unblocked,” Murphy explains, adding that the stop-start cycle is worse than a continuous conflict where the expectations are clear. “When it is stop-and-start, it is really difficult,” says.
The regional hiring picture is uneven, and it tracks exposure to those disrupted trade routes. GCC hiring fell 3% overall in 2Q, with Qatar down 6% on its reliance on energy exports and Gulf shipping, Kuwait and the UAE down 4%, and Bahrain down 2%. Only Saudi Arabia and Oman grew, each up 1%, largely due to Hormuz bypass capacity. The UAE’s June PMI fell to 50.8, its weakest reading in more than five years, and the central bank raised its 2026 inflation forecast to 2.3% on supply pressures tied to the regional situation.
Beyond the headline figure, hiring didn’t stop so much as narrow to what firms could not do without. Companies funded roles tied to active delivery, revenue protection, financial control, regulatory requirements, and operational continuity, while broader expansion became harder to justify. Hiring in finance grew 5% and investment management 6% on the back of ADGM and DIFC fund activity, while hiring in the mining industry grew 5% on Saudi exploration licensing, all defensible, delivery-linked activity.
The elephant in the room: AI
One line in the data cuts against the gloom: Hiring for data-and-AI-related jobs grew 4%, even as hiring for software positions fell 6% and cloud jobs dipped 4%.
One take is that AI is bucking the downturn, but Murphy isn’t sold. “AI is being oversold to us by big tech, much like they oversold cyber, data, security, and consulting services throughout my career,” he says. “Our 4% growth figure might just be a recovery from a quiet 1Q” or just a reflection of the harsh market reality: AI is a tool firms are reaching for because of the freeze — a way to hold or cut headcount while keeping the work going.
Others say the AI momentum is real in places like the UAE and precedes the overall market slowdown: “The UAE’s AI momentum reflects a deliberate effort to embed AI across the economy, not just within the technology sector,” Bivek Sharma, chief technology and AI officer at PwC Middle East, tells us, with the pull now for talent “that can apply AI in operations, services and decision-making.” According to PwC’s 2026 Global AI Jobs Barometer, the share of UAE postings requiring AI skills tripled, from 1.0% in 2021 to 3.2% in 2025.
PwC’s figures come with a few caveats: The Barometer covers the period between 2021 and 2025, so it stops before the market turned. It describes the years the UAE was still adding jobs, not the 2Q 2026 freeze. And even within PwC's own data, that rising share sits on a shrinking base: total postings fell across every level of AI-exposed jobs between 2024 and 2025, with the most AI-exposed occupations shedding the most. A bigger slice of a smaller market can signal structural change as easily as growth.
BACKGROUND- Cooper Fitch’s index tracks new job opportunities across the GCC using its own placement data. It measures what firms are actually recruiting for right now — which is why it caught the 2Q freeze that broader adoption surveys, built on job-ad counts or annual data, would miss. PwC’s barometer, meanwhile, looks at postings, regardless of whether they end up filled or not.
What next?
The impact of AI is now genuinely felt in how many UAE firms approach new hires — and this looks like cutting jobs, on one end. For a wealth management platform like Abu Dhabi-domiciled Sarwa, there’s a basic test for any new hire or contract: “It’s become less of, ‘Do we need this or not?’ and more of, ‘Can this be done by AI or not?’” Mark Chahwan, co-founder and CEO, tells EnterpriseAM.
Sarwa used an AI model for a recent Arabic-language website audit — not so long ago, that would once have gone to an agency. “AI is going to drive down costs” for some tasks, he says. “This is the kind of task that, instead of taking a few weeks, can now be done in an hour,” he adds.
Upskilling teams will be critical to many companies as AI skills become a requirement, regardless of position. Chahwan tells us that Sarwa’s chatbots now handle roughly half of inbound queries, with the firm deliberately keeping and expanding human support alongside them. Where Sarwa hires, it has stopped treating AI as a category of its own. “One of my really close friends, an engineer at Sarwa, started to say, ‘I haven’t written a line of code in so long,’ because it just became like a co-pilot,” Chahwan says. “The terms ‘AI engineer’ or ‘AI roles’ will probably disappear as it gets embedded in all jobs.”
“The biggest opportunity is not just hiring a handful of expensive AI specialists, but equipping the wider workforce with AI skills,” PwC’s Sharma says. “Organisations that combine targeted specialist hiring with large-scale upskilling will be best positioned to capture long-term value” — which is essentially what Sarwa’s Chahwan is saying about AI literacy becoming “part of all roles.”
And while this upskilling push will cut into the premiums some have been paying for general AI skills, execs in high-level positions with stand-out AI skills will likely have a window in which they can command higher salaries — for a little while longer, at least. PwC puts the AI wage premium in UAE financial services at 92%, against a 16.8% global average. Asked about hiring competition and premiums, Sarwa’s Chahwan says: “It’s more from the seniority, I would say, than just the fact that it’s AI. Because it’s so important to the C-suite and strategy, generally, the pay will come for someone who can have influence, steer people, and has the technical know-how.”
What to watch for in hiring — short- and long-term: In the near future, it’s about a ceasefire, not technology. “It is very hard to see hiring momentum returning without a permanent ceasefire,” Murphy says. His base case is a slow recovery, with a flat 3Q and a better 1Q next year. And as the recovery materializes, long-term tells is whether we see structural changes in the market, like AI offerings continuing to grow, all the while the larger job market offerings are shrinking.
Is the UAE about move its AI champion to the United States — and sell off a huge chunk of it? That’s what the Wall Street Journal reports, citing unnamed “Emirati officials” who it says “indicated” that G42 “plans to become a US company, mostly owned by US investors.” G42 is controlled by National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan and hasn’t confirmed any plan.
The report comes after Washington moved the UAE into its allies-only export tier, Country Group A:5, as we reported earlier this week. That will allow G42 to buy chips freely from the likes of Nvidia and clears the way for Microsoft and OpenAI’s massive UAE data center plans. The catch: License-free access lapses after 270 days unless the US government extends it. A mostly US-owned G42 would be a permanent answer to Washington’s compute-export security concerns.
The report is awfully difficult to square with everything else Abu Dhabi is doing. AI is one of the three pillars of the UAE’s investment policy for the coming decade, alongside infrastructure and defense, and G42 is at the heart of it. While MGX is the emirate’s platform for investing in the global AI industry, G42 is what’s leading the AI transformation drive at home:
SOUND SMARAT- G42 is the national AI champion: Think of it less as a single company than the UAE’s AI economy in holding-company form. The group has roughly 23k employees across 10 operating companies, with Mubadala, Silver Lake, and Microsoft (USD 1.5 bn in April 2024) as minority investors. It controls a full AI economy: Core42 does sovereign cloud and AI compute. Khazna builds the data centers, including the 1GW Stargate UAE cluster with OpenAI, Oracle, Nvidia, Cisco, and SoftBank, whose first 200MW is due online this year. ADX-listed Presight does big-data analytics and holds a majority of AIQ, its energy-AI venture with ADNOC. M42, the health JV with Mubadala, runs 480-plus facilities. ADX-listed Space42 covers satellites and geospatial. We could go on — it owns Botim, deploys sovereign agentic AI, owns a cybersecurity arm…
And the political winds in DC have buffeted G42 for under both the Trump and Biden administrations. The Microsoft money came only after G42 divested its China positions, including a stake in TikTok owner ByteDance, and backed away from Chinese AI tech. US government scrutiny of G42’s stake in Cerebras similarly forced the AI chipmaker to shelve its 2024 IPO. The stake was cut to non-voting in October 2025 before G42 sold out of Cerebras in December — meaning Abu Dhabi missed out on Cerebras’ Nasdaq debut in May of this year. Later that month, the US agreed to let the UAE buy hundreds of thousands of advanced Nvidia chips — roughly a fifth reportedly earmarked for G42.
Our read: Where there’s smoke, there’s fire. Washington may want G42 inside a US-controlled perimeter before it extends chip access beyond the 270-day window, so expect versions of this story to keep surfacing. Could some version of this happen? Say, investment from G42 flowing into the US? A new G42 outpost there? Very possible. But G42 redomiciled and majority US-owned? The UAE builds and owns national champions — it doesn’t sell them.
The US-Iran war hasn’t driven Indian startups away from Dubai, but it has changed the way investors deploy their capital. VCs are slowing investment, holding more liquidity, and becoming increasingly selective, with cheques moving away from hype-driven sectors like AI toward businesses with stronger fundamentals.
“Recent events have had an impact, but that is very temporary. Dubai is increasingly the headquarters of convenience, while India remains the engine,” Sidharth Sogani, founder and CEO of Manama-based BlueAster Capital, tells EnterpriseAM. The pattern shows up across the industry in India, where startup funding fell 43% y-o-y to USD 7.8 bn between 1 March and 15 June. Late-stage funding was the hardest hit, down 61% to USD 1.5 bn.
Where the money’s going: Manufacturing, industrial tech, and process-led plays are gaining favor, while AI-first startups face tighter scrutiny. “The concentration of capital in the AI bubble in the US is draining liquidity from other sectors and increasing risks of a sharp correction,” Sogani adds. Crypto infrastructure and advanced manufacturing look best positioned.
UAE incentives are helping keep confidence: The CBUAE’s AED 1 tn (USD 270 bn) resilience package from March, alongside another AED 1.5 bn in fee waivers and customs relief, has reassured the expat community. Indian companies make up more than 30% of Dubai's startup community — around 3.9k new Indian firms joined the Dubai Chamber of Commerce in 1Q 2026, up 11% y-o-y.
Founders are still coming: Bengaluru-based fintech OnFinance AI is opening its third global office in Dubai, CEO Anuj Srivastava tells EnterpriseAM. Fermion founder Mehul Mohan chose Dubai over San Francisco and Singapore for his post-exit relocation. The message: Dubai remains a top global gateway — but Gulf capital is no longer chasing growth at any cost.
E&’s new boss is dismantling the tech empire his predecessor spent years building. New group CEO Masood Sharif Mahmood is unwinding the UAE tech giant’s expansion strategy of recent years as he refocuses on the core telecoms that used to be known as Etisalat, Reuters reports. The portfolio review covers venture arm e& capital (around USD 194 mn deployed and committed across 20 companies) and SME lender Beehive, but would see e& keep control of e& PPF Telecom Group and its emerging-market operators.
The pullback has already begun: The USD 5.95 bn sale of its full 16.2% Vodafone stake to the Niel family, which we noted earlier this week, followed the partial sale in May of its Careem holding to Uber.
The strategy Mahmood is unwinding was former CEO Hatem Dowidar’s legacy — surplus cash from e&’s dominant position in the domestic telecoms industry was funding a push into tech, venture, and international assets ambitious enough that Etisalat rebranded as e& (as in “Etisalat and more”) in 2022. The shares are down 8.6% over three years, for a market cap of around USD 48.2 bn, and the group has concluded that steadier telecom returns should come first.
Uber is taking indirect control of Talabat. It launched a takeover bid for Delivery Hero — the German parent of the DFM-listed delivery player — at EUR 41.50 per share, valuing Delivery Hero’s equity at USD 14.8 bn, according to a press release. Uber already holds around 24.8% plus derivative exposure. Add in the shares Prosus has already agreed to sell Uber and its economic interest stands at north of 53%. Delivery Hero MENA would keep 80% of Talabat, with the rest remaining in free float on the DFM, where it listed in December 2024, per a DFM disclosure (pdf).
Edge, the UAE’s national defense champion, has agreed to buy 100% of Akaer, a Brazilian aerospace engineering firm with more than 10 mn engineering hours logged for Embraer, Saab, and Turkish Aerospace, according to a statement from Edge that doesn’t say how much the transaction is worth. Akaer already works with Edge on unmanned systems.
We think defense is one of three big investment themes in the UAE over the coming decade alongside infrastructure and AI. Edge bought a 50% stake in Brazilian smart-weapons maker SIATT back in 2023; took a controlling stake in Italy’s CMD, a maker of advanced propulsion systems, in May of this year; and recently said it has set up a European headquarters in Paris.
Julphar’s divestment program is complete: The Emirati drugmaker finished the sale of Scientific Pharmacy’s pharmacy and distribution business in Oman to Al Batha Healthcare Group, it said in an ADX filing (pdf). It’s the final piece in a plan first disclosed in September 2025 to exit non-core assets and focus on specialty pharma across MENA. Al Batha also took Julphar’s Health First Pharmacy chain in the UAE in a sale that wrapped last month.
Revolut picked Dubai as its crypto beachhead. The Virtual Assets Regulatory Authority (VARA) has given the fintech in-principle approval covering broker-dealer, exchange, management, and investment services, with the full VASP license expected before end-August, according to a report. UK-based Revolut has more than 75 mn customers globally, 16 mn of them crypto users, and already has UAE Central Bank stored-value and retail payment licenses.
Why it matters: One of the world’s biggest fintech players choosing Dubai over Singapore or Hong Kong as its crypto base reinforces VARA’s claim to be the most credible global licensing venue, war or not.
One of Saudi’s most high-profile green investments is taking it on the chin. A report suggests that EV maker Lucid — roughly 60% owned by PIF — was debating between filing for bankruptcy protection in the US or going private on the advice of AlixPartners, sending the stock down more than 50% intraday, its biggest drop on record. The company later called the rumors “completely false,” CNBC reports. The company claims it has plenty of liquidity on hand, pointing to some USD 1.05 bn it raised earlier this year (PIF’s Ayar took USD 550 mn of that) and some USD 2 bn undrawn on a PIF term loan. Lucid has plans to open a plant in Saudi, making it one of the cornerstones of the kingdom’s green manufacturing push.
WATCH THIS SPACE- Almoosa Health has built an SAR 2.5 bn war chest of debt for an expansion drive as Saudi’s healthcare industry continues to heat up. The Tadawul-listed hospital group out of Al-Ahsa in the Eastern Province has just lined up a SAR 500 mn seven-year shariah-compliant facility from Banque Saudi Fransi to help fuel expansion, it said in a Tadawul filing. That’s on top of November’s SAR 1.34 bn Saudi Awwal loan for a Khobar specialist hospital and last August’s SAR 650 mn BSF facility. The company’s flagship is a 750-bed facility that focuses on specialist care in oncology, cardiology, and neurology.
Big players in Egypt’s real estate industry are positioning themselves to grow even as the market slows. Orascom Development secured EGP 18 bn (USD 360 mn) from a syndicate of the National Bank of Egypt, Banque Misr, and CIB to accelerate the buildout of its O West project in West Cairo, Reuters reports. The project is 25% complete.
Why it matters: Sales of high-end primary-home sales — the traditional store of wealth for rich Egyptians — have slowed, and the market is watching as smaller contractors struggle to finish what they’ve sold amid a cash crunch. We expect the big developers — players like Soduc, Marakez, PHD, and Orascom — to stock up on the cash they need to ensure on-time delivery.
SOUND SMART- Demand for real estate in Egypt hasn’t disappeared — it has moved. Coastal product in Sahel and on the Red Sea as well as hotels, offices, and mixed-use are all in high demand. Among the latest examples: Banque Misr’s real estate arm MAD is in talks to develop a 200-room hotel on 7.5k sqm opposite the Grand Egyptian Museum and the IFC is close to a USD 100 mn loan for AlDau’s flagship next door.
The International Finance Corporation is investing up to USD 100 mn in Jordan Kuwait Bank’s second green bond, alongside up to USD 0.69 mn in blended-finance support, with proceeds earmarked for climate projects including adaptation and resilience
AND- The European Bank for Reconstruction and Development has invested USD 100 mn in blue bonds issued by the kingdom’s Housing Bank. It’s the first blue bond in Jordan and the wider southern and eastern Mediterranean region. Proceeds are earmarked for investment across Jordan in water and wastewater management, EBRD said in an emailed statement.
The Gulf’s project market rotated away from the UAE during the war: GCC contract awards fell 25.4% q-o-q to USD 59.4 bn in 2Q 2026 as the Iran war weighed on activity, according to Kamco Invest’s GCC Projects Market Update (pdf). Despite the regional drop, Saudi Arabia more than doubled its project awards during the quarter to overtake the UAE as the region’s busiest project market. All GCC markets other than Saudi recorded quarter-on-quarter declines, but total regional awards remained up 30% year-on-year, driven primarily by KSA and Oman.
Across the region, the project market is split in two by the degree of exposure to the Iran war fallout. Saudi Arabia was largely shielded from the impact of shutting down Hormuz thanks to its Red Sea access and East-West pipeline. Oman similarly enjoys more insulation than the rest of the GCC, allowing its core project market to barely flinch during the war.
Saudi is now more than half of the region’s project book: The Kingdom’s 2Q 2026 awards jumped to USD 30 bn — up 160% q-o-q and 54% y-o-y — capturing more than half of GCC project value for the first time in years. Construction led (up 184%), followed by gas, transport, and water. Defense also surfaced as a category, with a USD 4.6 bn Defense Ministry contract handed to Al Bawani. On the flipside, power project awards fell 90% y-o-y as its pipeline of projects stalled in anticipation of a more stable environment.
In Oman, awards jumped 341% y-o-y to USD 5.9 bn — and, uniquely in the GCC, held nearly flat q-o-q. Power drove the gain (from zero last year to USD 4.5 bn), and a USD 2.3 bn 15-year SUEZ-led water-and-wastewater contract covering 43% of the population underscored a defensive spending profile.
ALSO- Kuwait saw USD 2 bn in project awards during the quarter (+49.1% y-o-y, -65.4% q-o-q), with the oil sector taking more than half, including a USD 992 mn Jurassic Light Oil export facility upgrade awarded to Kuwait Oil Company and a USD 565 mn upstream contract to Heisco. Qatar took the sharpest hit, dropping 40.8% y-o-y and 90% q-o-q to USD 931 mn. The country saw no awards in five of eight sectors, including chemical, gas, industrial, and power.
Iraq and the US are rebuilding their relationship around business ties: Iraqi Prime Minister Ali Al Zaidi’s visit to Washington this week produced a package of commercial agreements between American companies and both the Iraqi government and private sector. That package is set to be unveiled later today at a US Chamber of Commerce summit, “where organizers plan to announce USD 60 bn in commercial agreements,” Semafor reports.
From boots on the ground to balance sheets: US President Donald Trump touted his “tremendous chemistry” with Al Zaidi and Iraq’s “tremendous potential because of their oil,” signaling the US no longer needs a meaningful military footprint in the country after a 23-year entanglement. The relationship should now run on trade, Trump signaled, saying there will be “massive” oil agreements within the next two weeks.
The substance underneath the “chemistry” is a race to give Iraqi crude an exit that doesn’t depend on the Strait of Hormuz. The waterway was shut for much of the Iran war, and Iraq is still paying for that closure. As the second-largest Opec producer before the war began in February, Baghdad has slashed output by 60% since then, squeezing state finances.
The centerpiece to the solution is the Kirkuk-Baniyas pipeline, which has been mostly idle since 2003. Washington is now backing its revival, which would reconnect northern Iraqi fields to Syria’s Mediterranean coast. US special envoy Tom Barrack has been in Baghdad working the file with Al Zaidi, building on an MoU with LA-based TI Capital. US officials expect American firms to help drive a reconstruction that could run into the bns. Syria’s Baniyas port — home to the country’s biggest refinery — is the early front-runner to take the crude. Chevron, TotalEnergies, TI Capital, and Qatar's UCC Holding have all been in the room on expanding Syria’s role as an export hub.
SOUND SMART- This plan runs through Damascus, and the door there is open. Syrian President Ahmad Al Sharaa was warmly received by Trump on the sidelines of this month’s NATO summit, and Washington has been peeling back sanctions — enough to bring Chevron, Total, and ConocoPhillips to the table.
The US is mulling a sharp expansion of its war on Iran, with US President Donald Trump now weighing ground operations to seize Iranian islands near the Strait of Hormuz and a strike on Pickaxe Mountain — a fortified, nuclear-linked tunnel complex, US officials tell the Wall Street Journal. The options include putting American troops on Kharg Island, Iran’s main oil-export hub, although Trump said this week the seizure is unlikely but not ruled out.
The deliberations came as US forces pressed ahead with more strikes on Iranian coastal defenses, missile sites, and command centers on Wednesday. The US military also fired missiles yesterday on a sanctioned supertanker that CentCom says ignored warnings to turn away from Kharg Island and “attempted to violate the US blockade.”
Tehran has reportedly told its Houthi allies in Yemen to be ready to close the Red Sea’s Bab El Mandeb strait if the US hits Iranian power infrastructure, Reuters reports. The Houthis have reportedly responded to Iran’s requests by setting up drones and missiles near the strait and are now waiting for a signal to enforce their blockade. The move would sever the region’s only major alternative oil route as Hormuz remains closed.
Not an open-ended war? US Vice President JD Vance has framed the strikes as pressure, not open-ended war, saying, “we’re not just going to bomb and bomb and bomb.” The recent strikes on Iranian military capabilities were specifically designed to strategically weaken the country before pushing ahead with expanded tactics, Reuters quotes three officials as saying. Trump, meanwhile, insists that Iran wants to “settle so badly,” although defense analysts speaking to CNBC say they see no realistic path toward settlement.
Meanwhile in the Levant: Trump is now pushing Israel to pull its forces out of Syria and Lebanon, telling Israeli Prime Minister Benjamin Netanyahu that “they don’t want you there,” Axios reports. The request from Washington came after Trump met with Syria’s Ahmed Al Sharaa on the sidelines of the recent NATO summit in Turkey, while Israel has yet to redeploy its forces out of two areas in southern Lebanon despite having committed to the withdrawal in negotiations several weeks ago.
Mohamed Alabbar wants the majority of hisplanned USD 20 bn Syria playto be Syrian-held. The two flagship developments under the investment — a Latakia beachfront and a mixed-use scheme in Damascus — will be led by Abu Dhabi’s Eagle Hills as anchor investor but ultimately owned by a new company bringing together the Syrian government, Gulf investors, and Syrians themselves, Alabbar told Bloomberg in a televised interview. The Syrian government is expected to contribute the land.
What’s inside: The developments will include tens of thousands of homes as well as hotels, retail space, offices, schools, and hospitals. Construction could begin within months as funding arrangements are made, Alabbar said. Separately, the b’naire is considering setting aside part of the developments for affordable housing or contributing USD 5k-10k from every home sold toward rebuilding housing for lower-income Syrians.
Room to grow
The China-Egypt Suez Economic and Trade Cooperation Zone (TEDA) has requested additional land inside the Suez Canal Economic Zone to accommodate rising investor demand, according to statements made by TEDA marketing and promotion head Mohamed Gabrial. The zone reached over 10 sq km following a July 2025 expansion agreement that added 2.86 sq km to its previous 7.34 sq km footprint, and around 200 industrial and service companies are now operating inside.
TEDA is targeting higher-value manufacturing in renewables, solar components, green hydrogen-linked industries, advanced engineering, auto components, and electrical appliances, Gabrial said. The land request signals that Egypt’s China-led manufacturing pipeline is turning into a denser industrial cluster.
One step closer to RIZ
Russia is moving forward with its long-delayed industrial zone inside Egypt’s Suez Canal Economic Zone, after selecting an industrial developer for the zone, according to a statement by the Egyptian Foreign Ministry. Choosing a developer moves the RIZ closer to execution after years in the planning phase. The Madbouly government approved decades-long tax and customs incentives for companies operating in the zone under the Egypt-Russia intergovernmental agreement. The RIZ has been pitched as a manufacturing base for Russian companies targeting Egypt, Africa, and the wider region, with prior public reporting citing investment potential in the multi-bn-USD range.
Green light
The US State Department approved potential foreign military sales to Saudi Arabia and Kuwait. Saudi Arabia’s sale, valued at USD 1.96 bn, includes up to 20k Advanced Precision Kill Weapon Systems, rocket launchers, explosive warheads, rocket motors, practice warheads, and other support equipment, according to a statement. Kuwait’s USD 484 mn sale is for the “purchase of C-17 Sustainment and related equipment,” as well as non-major defense equipment, a separate statement said.
Oil prices have broadly held steady throughout the US-Iran war, but the buffers that absorbed the shock are now running dangerously low, the IMF said on Wednesday. Compression of demand, increased production outside the Gulf, and strategic reserves or commercial inventories all acted as cushions — and all three are now flat.
Demand compression carried most of the load, mostly in Asia, as pricier barrels pushed importers toward coal and renewables. Production outside the Gulf climbed nearly 2 mn bbl / d above 2025 levels, led by the US, Venezuela, Guyana, and Russia. The leftover gap, a deficit of c. 4 mn bbl / d between March and May, was filled almost entirely by draining inventories.
What’s next: Watch whether producers use any lull to rebuild inventories rather than bank the revenue — that's the single variable that decides how hard the next disruption hits.
Surprising exactly nobody, the region’s 2026 just got marked down again: Most GCC economies will contract more sharply this year than forecast three months ago before rebounding in 2027, according to a Reuters poll of economists out late yesterday, as hopes fade that the war will soon end.
Kuwait and Qatar took the deepest downgrades — the poll sees both economies shrinking 8.1% this year. The UAE will hold steady (-0.5%), respondents said,while Saudi (+1.4%) and Oman (+3.1%) will both eke out some growth.
Bond investors understand the calculus: The average sovereign risk premium across Middle Eastern governments jumped roughly 20 bps to 402 bps over Treasuries in the week since the ceasefire broke down, Bloomberg reports — the widest in almost four years, and on pace for the fastest YTD widening since 2018.
Saudi Arabia’s Investment Ministry has begun registering Egyptian contractors, a step toward licensing them to bid on infrastructure projects under the Kingdom’s Housing Ministry. The Investment Ministry is working with the Egyptian Federation of Construction Contractors to facilitate the move, our Egypt desk reports. The target client is Saudi’s National Housing Company, which wants large Egyptian names to bid, including Orascom, Hassan Allam, and Arab Contractors. The move also opens the door for “thousands of smaller firms” to bid as well, Youssef says.
REMEMBER- Egyptian contractors, pressured by high domestic interest rates, slow payments, and a drying up of work, are increasingly taking on work across the Red Sea. Youssef says 25 firms have already qualified to bid on the National Housing Company's SAR 200 bn (c.USD 53 bn) project pipeline.
Why it matters:Financing, not qualification, is the sector’s bottleneck. Outside a few giants that can self-fund, Egyptian firms struggle to get bank guarantees for work abroad — and even the Saudi branches of National Bank of Egypt and Banque Misr operate only as accounting units there, not lenders that can serve Egyptian companies, Youssef says. Saudi banks issue guarantees to firms with a long Kingdom track record but require 60% of the value as cover, against roughly 10% at home — six times the cash tied up for the same guarantee, squeezing the liquidity left for more work.
Sign of the times
Back on the no-fly list: The European Union Aviation Safety Agency (EASA) has advised its regulated carriers and non-EU airlines operating to and from the bloc under its authorization not to fly at any altitude through the airspace of Bahrain, Kuwait, Qatar, and the UAE, according to a bulletin. The warning also covers the Gulf of Oman and will remain valid through 29 July unless reviewed earlier.
The warning has teeth this time: The EU aviation safety regulator had withdrawn its broader regional bulletin on 8 July after the ceasefire temporarily lowered the threat level, replacing it with a lower-level note that only asked airlines to exercise caution over the Gulf states. The current warning recommends avoiding the affected airspace altogether, citing the risk of missile and drone overflights, interception activity, falling debris, and civil aircraft being misidentified by air-defense systems operating with little or no warning.
The bulletin doesn’t close the region’s skies itself, but it could sharply constrain Europe-Asia connectivity. European carriers have already cut several destinations and are increasingly steering around higher-risk zones, reducing the number of viable routes linking Europe with Asia, Bloomberg reports.
PARTING SHOT- Former DP World boss Sultan Bin Sulayem has washed ashore in Malaysia, where he’s running MMC Port Holdings, the country’s largest port operator, according to Reuters. Bin Sulayem stepped down from DP World in February after featuring prominently in the Epstein Files released by the US government.
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