Happy FRIDAY, ladies and gentlemen. If you were counting on a calm slide into the weekend, join us in adjusting expectations. The war gained momentum again overnight, sending the USD jumping on haven flows and pushing oil above the USD 100 / bbl mark as traders reached for cover.
The US Housevoted (again) to end the war, rebuking the president a second time. “Again” is doing a lot of work in that sentence — it’s not the first time Congress cast its vote to stop the US’ strikes on Iran, but the Republican-led Senate swiftly voted in the opposite direction hours later.
In any case, that’s not the only gun Washington is pointing. US President Donald Trump also made good on his word to roll out a fresh slate of tariffs, slapping levies on some 60 countries over forced-labor concerns. The 10-12.5% duties — which will apply to several of the US’ trading partners, including the EU — come just as Trump's temporary 10% global tariff expires.
Tariffs and war aside, markets have enough on their minds to fidget. Wall Street futures eased as a fresh round of Big Tech results reignited the question that never really goes away: Is anyone actually making money on all this AI spending? Alphabet gave the bulls something — a cloud beat — and the bears something too, with search revenue coming in a touch light. The takeaway of the week: Wall Street is not a fan of tokenmaxxing. –Salma
A Trump administration deal that gave a major boost to the Gulf’s sweeping AI ambitions is still roiling US Democrats more than half a year later, signaling trouble if and when the party seizes power in Washington as voters hurtle toward midterm elections this coming November.
Democrats almost certainly can’t kill the deal, which okayed the sale late last year of 35k advanced artificial intelligence chips apiece to Saudi Arabia’s Humain and the UAE’s G42, both state-backed AI champions, helping launch the construction of gargantuan AI-focused data centers in each nation. The Trump administration went a step further on 10 July, granting the UAE access to advanced chips without an export license, which will make future sales to G42 and other approved entities far easier.
Some in the Trump administration raised red flags about the July designation of the UAE as a “major defense partner.”Politico reported earlier this week that career staff at the Commerce Department had earlier warned that allowing the Emirates easier access to Nvidia chips and other tech “made it more likely the technology would get into the hands of [US] adversaries.”
Democrats arethreatening investigationsif they win control of Congress in November — focused on the risk that advanced chips could be diverted to China’s military, and on whether the Trump family’s financial interests shaped the approvals. Central to those claims: a USD 500 mn investment in World Liberty Financial, the Trump family’s cryptocurrency venture. The Wall Street Journal reported in January that Aryam Investment 1 — an Abu Dhabi firm the paper claims is backed by Sheikh Tahnoon bin Zayed Al Nahyan bought a 49% stake in the company days before Trump’s inauguration. Sheikh Tahnoon is the UAE’s national security adviser and chairman of the boards of both G42 and MGX, the sovereign-backed investment fund that focuses extensively on AI. World Liberty confirmed the transaction, denied that Trump or special envoy Steve Witkoff had any role in it, and has called any link to chip policy “100% false.”
SOUND SMART- Midterms are the US elections held halfway through a president’s term — putting the entire 435-seat House of Representatives and roughly a third of the Senate up for grabs. They double as a verdict on the incumbent (whose party almost always loses seats in the House) and can hand the opposition control of Congress — throttling or accelerating a president’s agenda for the last two years of his term. Voters go to the polls on Tuesday, 3 November.
If a Democrat wins the presidency in 2028, the party could clamp down on future deals — either by refusing to sell the highest-powered Nvidia chips to Gulf nations or limiting access to the most powerful and up-to-date AI models. That would be a significant blow to countries including the UAE, Saudi Arabia, and Qatar that have put AI and exportable computing power at the center of their economic policies as they continue to diversify away from oil. Saudi Arabia and the UAE have both projected that AI will contribute USD 100 bn or more to their economies by the early 2030s, or around 13% of GDP.
Humain declined to reveal specific requirements of its deal with Nvidia or to say how many chips had been delivered so far. G42 did not respond to an Enterprise request for comment.
“There is a potential model for US technology collaboration with Gulf partners — but it has to be predicated on technology security, strong protections against misuses of US-origin technology for surveillance or repression, and tangible benefits to the United States,” Sen. Mark Warner, a Democrat from Virginia, tells EnterpriseAM. “Instead, the Trump administration has predicated these engagements on transactionalism,” says Warner, the top Democrat on the Senate Intelligence Committee.
Warner isn’t the only one raising a red flag: Sen. Elizabeth Warren, the top Democrat on that chamber’s banking committee, blasted the US Commerce Department’s decision to remove licensing requirements for chip shipments to the UAE, accusing the administration of ignoring “concerns about the diversion of sensitive technology to China and other national security risks.” Top Democrats on the House Foreign Affairs, Intelligence, Armed Services and Oversight committees have urged the Commerce Department’s internal watchdog to probe the Trump family’s financial interests in the deal.
“Decisions about exports of advanced American AI chips should solely be based on economic competitiveness and national security considerations, and they should certainly never be made to make money for your own business,” Rep. Sydney Kamlager-Dove from California, the top Democrat on the House Foreign Affairs Committee panel with jurisdiction over South and Central Asia, tells EnterpriseAM.
The Democratic push comes as the Trump administration already seems to be rethinking its early laissez faire approach to AI — which could complicate the Gulf’s ambitions. The administration abruptly ordered Anthropic, a leading US AI lab, last month to block foreigners’ access to two of its most advanced models, Fable 5 and Mythos 5, citing security concerns. The company also blocked domestic access to the models to ensure compliance with the order. The administration — which is also in a legal battle with Anthropic over how its systems can be used in warfare and domestic surveillance — allowed the models back on the market a few weeks later after the company added new safeguards, the New York Times reported. The administration also moved last month to mandate government testing of AI models before they’re publicly released to root out cybersecurity concerns.
The push comes amid a broader intertwining of financial and AI interests that will make any US decoupling with the Gulf highly complicated. Gulf sovereign wealth funds have invested bns in US AI companies, including OpenAI, Anthropic and xAI. At one point, Trump was reportedly considering selling the UAE c. 500k advanced Nvidia chips per year — 100k of which would go to G42 — though that deal was never finalized. More broadly, the president picked the Gulf for the first major international trip of his second term, where he announced USD 200 bn in new US-UAE business deals.
It might not just be Democrats urging tighter export rules in a couple years. Republicans have historically been just as anxious as Democrats about sensitive US technology leaking into Chinese hands, though they’ve held their tongues as Trump took a less restrictive approach. That could change once Trump is out of office or if his hold on the party loosens.
“There are a number of Republicans unhappy with Trump’s policy,” William Reinsch, a former US Commerce Department official who was in charge of export control policy during the Clinton administration, tells EnterpriseAM.
Democrats and Republicans might cooperate to pass legislation to restrict AI cooperation with the Gulf, Wreinsch says. More likely, they could persuade Trump to add additional safeguards without direct legislation. “He probably would not listen to the Democratic leadership, but … he would pay attention to the Republican leadership telling him they're going to support the Democrats on something like this,” Wreinsch says.
At the core of the debate is whether the US or China leads the world in the development of advanced artificial intelligence. Washington and US industry were spooked last week after Z.ai released Kimi K3, a massive open-weights model that performs on par with Anthropic’s Fable 5 on some tasks. The Trump administration has broadly argued that the United States has a better shot at staying ahead in the AI race if it makes the rest of the world dependent on US technology than if it hoards that technology for itself — making Chinese AI more attractive in the process.
The Biden administration, which was far more cautious about selling AI chips abroad, created a tiered system that authorized more or less AI sharing with nations based on the risk of that technology leaking to China or other US adversaries. The Trump administration rescinded that rule before it took effect.
The Saudi and UAE deals don’t ignore security concerns. They include “rigorous security and reporting requirements” aimed, in part, at preventing AI technology from ending up in Chinese hands, according to the US government agency that wrote technical specifications for the sales. But the risks of “leakage” to China are inevitably high given the long history of tech partnerships between Saudi Arabia, the UAE and China — and the Asian giant’s long, documented history of government-backed digital theft.
(UAE officials have said they’re“decoupling” from Chinese tech in their AI infrastructure as a condition of AI cooperation with the United States, but the nations remain tightly linked in other areas of technology. That decoupling has included G42 selling off all its investments in Chinese firms. Saudi Arabia has not made public decoupling pledges; Prosperity 7, Aramco’s captive VC arm, owns shares of Z.ai — formerly known as Zhipu — which makes GLM 5.2, another Chinese open-weights model that’s made headlines this summer.)
US AI companies outpace their Chinese rivals in private AI investment, but strong government funding has allowed China to keep pace on actual technology development. Stanford University’s Human-Centered Artificial Intelligence center estimated earlier this year that the performance gap between the top US and Chinese models was just 2.7%.
SOUND SMART- China has also focused on offering an “open-weights” version of AI, which may ultimately prove more attractive to users in many countries and industries. Unlike the closed models offered by OpenAI and Anthropic, open-weights models allow consumers to fine tune the AI system’s operating procedures — and hence how it answers questions and approaches tasks — to their own needs. Most open-weights models are also open source, meaning anyone can take the models and run them in their own data centers.
But narrowing the terms of the current chip deal or restricting future ones would create a whole separate set of problems. For starters, even if Democrats sweep the midterm elections, they couldn’t make major changes until a Democrat is in the White House more than two years from now. By that point, US and Gulf tech firms will be even more interlinked — and US firms may be more dependent on Gulf capital.
“We’re talking about bns in investments, joint data centers and deep partnerships between American tech giants and Gulf sovereign entities. A future administration would face heavy industry pushback,” Mohammed Soliman, a senior fellow focused on technology at the Middle East Institute, tells EnterpriseAM.
That means future administrations are more likely to tinker around the edges of chip deals — ramping up security protections and access restrictions — or to restrict access to the latest AI versions rather than cutting off cooperation entirely.
“The bigger question is not whether controls remain in place, but how aggressively a future administration applies them to third countries and what safeguards it requires for AI-related partnerships,” Leah Siskind, an AI research fellow at the Foundation for Defense of Democracies, tells EnterpriseAM. “Any Democratic administration is likely to scrutinize technology transfers, cloud access, and chip deployments to ensure they do not create indirect pathways for China to access advanced AI capabilities,” she says.
Plus any moves that hurt the US AI industry are likely to have major repercussions for the broader US economy, which has been mostly stagnant except for AI spending. “AI is such a linchpin for GDP, it’s tough to see putting that at risk,” Paul Meeks, head of technology research at Freedom Capital Markets, tells EnterprisAM.
There are also broader geopolitical considerations. Most importantly, Democrats may be wary of punishing Gulf allies after they’ve borne the brunt of Iranian missile and drone attacks during the war with Iran and as they continue to provide a strategic buffer against Iran in the region. Both nations have suffered strikes against their military, industrial and energy infrastructure since the war picked up again this month and Saudi Arabia has endured strikes against its oil tankers by Tehran-backed Houthis in Yemen.
The Trump administration announcement this month about removing license requirements for UAE chip exports specificallycitedthe nation’s “status as a US major defense partner and its support in advancing US national security interests, including Operation Epic Fury.”
“Arguably, the severe damage imposed on the Gulf states by this war means that the US is under an obligation to be a supportive ally in the coming years, including facilitating chip exports,” Justin Alexander, a Gulf business analyst and Director of Khalij Economics, tells EnterpriseAM.
Finally, the more time passes, the less leverage the US government will have over global AI infrastructure. While US companies are ahead of China in the AI race right now, most experts expect that picture to change – if not by the time the next US administration takes office in 2029, then quite possibly by 2031 or 2032, when the tranche of Nvidia chips now in service reaches the end of their expected lifecycle.
“The AI race is squarely in our favor right now, but the Chinese are super aggressive,” Freedom Capital Markets’ Meeks says. “Down the road, we can expect Huawei to have a chip every bit as good as Nvidia.”
A brutal summer is converging with a paralyzed global oil market recast the region’s energy map: Across North Africa, aging grids are buckling under 40°C-plus heat, creating pressure and unrest among some and opening up an export path for others. Meanwhile, Iraqi oil is finding its way to the Mediterranean by routing around Hormuz through Syria. Yemen is preparing to turn on its export taps again, while Lebanon wants its old pipeline back in the game.
Parts of energy-rich North Africa have been plunged into the dark, withoutages sweeping Libya, Algeria, and Tunisia as demand spikes and decades-old infrastructure gives way. Although it’s not exactly helping, this isn’t a problem that can be blamed on the US-Iran war — the three countries are struggling with decrepit power plants and fuel shortfalls that have made it impossible to keep up with energy demand amid ongoing heat waves.
Each of the three countries had a similar sequence of events: In OPEC member Libya, a failed transmission line in the west cascaded into a nationwide blackout, knocking out roughly 1,350 MW and cutting power and water to most of the country. Algeria — one of Africa’s largest gas exporters and a key supplier to Italy, Spain, and France — suffered its worst outage in two decades earlier this month, dragging down neighboring Tunisia, where the national gas and electricity company has since imposed scheduled cuts of up to seven hours a day and told people to ease off the air conditioning.
Libya's collapse became Egypt’s opening: Cairo resumed exporting power to Libya at an initial 70 MW after the grid collapse — but only after Tripoli paid down some USD 100 mn of arrears owed since 2023, with a schedule to clear the remaining USD 41 mn of a USD 141 mn tab before end-2026. Egypt has spent roughly EGP 965 bn over the past decade building out generation, lifting installed capacity to about 60 GW against summer peak load near 40 GW, as it looks to establish itself as a regional interconnection hub.
On the oil side of the picture, a bigger structural shift is underway: The US began importing Iraqi-origin fuel oil shipped via Syria’s Baniyas Port on the Mediterranean for the first time. The route, live since early May, sees Iraqi fuel oil trucked across the border by some 900 tanker-trucks a day and loaded at Baniyas roughly every seven to 10 days. Cargoes have already reached Spain and Egypt, and now they’re reaching US shores. Crucially, Iraqi and Syrian officials say Baghdad intends to keep using the Syrian corridor even after Hormuz normalizes.
Everyone wants a piece of the new map. Lebanon has formally asked Iraq’s oil minister to schedule a Baghdad visit to revive the long-dormant Kirkuk-Tripoli pipeline — a play to get back onto Iraq’s export menu just as Baghdad and Damascus signed an American-brokered MoU to rehabilitate the Kirkuk-Baniyas line, with initial throughput touted at up to 2 mn bbl / d. In Yemen, Oil Minister Mohammed Bamouqa says the government is preparing to resume crude exports and lift output by 25% in the first month of restarted operations.
MEANWHILE- Egypt is looking to secure its LNG needs with talks to import 15-18 cargoes per month for at least three years. The Egyptian government is in talks with Shell, TotalEnergies, BP, and Hartree Partners, Reuters reports, citing three unnamed sources. The transactions could cost Egypt between USD 8-11 bn per year, with prices set at roughly USD 1.5 above the European gas price benchmark, according to calculations by the newswire.
Egypt has, for the first time, put a number on how climate change could hit the state’s balance sheet — and the largest single exposure is the oil sector’s stack of government guarantees, our Egypt desk reports. The country’s first-ever Fiscal Risk Statement on Climate Change for FY 2026-27, obtained by EnterpriseAM, is the government’s first systematic attempt to quantify how both physical climate shocks and the global shift to a low-carbon economy could hit public finances — from the electricity grid to its biggest PPP-backed infrastructure projects.
Why it matters: The statement turns climate risk from an environmental talking point into a fiscal line item. It sits inside Egypt's IMF-backed reform program — the Fund singled out the state’s guarantee stock as a fiscal risk in its 29 June statement — and it sets the template for how the government will budget for climate exposure as it shifts to program-based budgeting by FY 2027-28.
One caveat: The government screened the four sectors with the largest balance sheets, not the most exposed ones. This choice shapes the findings — and it is why agriculture, arguably the sector most exposed to a warming Egypt, ends up with no exposure figure at all.
SOUND SMART- Climate fiscal risk comes in two forms. Direct risk is physical: a flood damages a power station. Transition risk is economic: global demand for oil falls as the world decarbonizes. The new statement tracks both — assets that can break and assets that can lose their value.
Just one day after the US and Saudi Arabia signed a civil nuclear cooperation agreement, US President Donald Trump bolted on a condition that could unravel it. The agreement, Trump said, “will be approved, but is totally subject to Saudi Arabia joining the very respected and successful Abraham Accords,” and that there would be “no enrichment” of nuclear material. Press Secretary Karoline Leavitt confirmed the normalization demand is now a requirement: “If they don't join the Abraham Accords, the deal is off.”
This isn’t the first time the US has tried to use business (and this agreement in particular) to push Riyadh to normalize ties with Tel Aviv. It also wouldn’t be the first time Riyadh hasn’t played ball. Under the Biden administration, Saudi Arabia maintained its refusal to recognize Israel and establish diplomatic relations with the country without an “irreversible and time-bound path” to the creation of a Palestinian state, which the Netanyahu government has ruled out, all the more so amid the Gaza war.
Israel is reacting selectively: Prime Minister Benjamin Netanyahu’s office publicly welcomed the potential normalization as “an historic leap forward” while his political rivals have been vocal about their qualms with the deal. Naftali Bennett, who is looking to return as Israel’s prime minister in elections later this year, called it “a serious strategic failure that endangers our security.” Former defense minister Avigdor Lieberman also warned the agreement would end with Saudi Arabia developing a nuclear weapon, urging Tel Aviv to lobby the US Congress to kill it.
What’s next: Washington is in an active war to dismantle Iran’s nuclear program while greenlighting a Saudi one, feeding arms-race fears. The pact heads to Congress, which would need a veto-proof majority to block it.
The Houthis claimed they struck two Saudi oil tankers, the Encelia and the Layla, saying the vessels violated the naval blockade they declared on the Kingdom this week as a new front in the conflict rattles global markets, with oil prices rising above USD 100 a barrel yesterday for the first time in two months. Saudi state news agency SPA confirmed the Encelia was left ablaze at the bow after an assault in the Red Sea, with all crew safe.
Some ships seem to be making it through the Red Sea anyway: Two Chinese-operated supertankers made it out yesterday, carrying a combined 4 mn barrels of Saudi crude loaded at Yanbu, according to shipping data.
US President Donald Trump, in a Truth Social post, warned that “from this point forth, any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls,” without clarifying how the payments would work. He also told Axios in an interview that he’s considering a “massive attack” and is “close to making a decision” on it, and separately said he plans to bomb and destroy bridges and power plants near Tehran in the event of more strikes from Yemen on shipping. Attacks so far have targeted maritime capabilities, missile and drone storage facilities, coastal surveillance sites, and air defense assets.
Iran has been strengthening its resources in Yemen, with Reuters reporting that it flew Islamic Revolutionary Guard Corps (IRGC) commanders, military advisers and missile- and drone-related equipment into the country, according to sources familiar with the matter.
All of this means it’s not just oil that’s getting more expensive: CMA CGM will impose an emergency fuel surcharge from 1 August, charging USD 150 per TEU for dry containers and USD 165 for reefers on all long-haul headhaul shipments, according to a statement. Long-haul backhauls and intra-regional trades will face surcharges of USD 75 and USD 90 per TEU. The fee — introduced after renewed fighting around Hormuz pushed fuel prices higher — will remain in place until further notice.
And as more sides get roped into the war… US intelligence is trying to work out whether Russia helped Iran hit CIA facilities in the Gulf. Four people familiar with the matter told Reuters that March drone strikes on at least two CIA stations — one inside the US embassy in Riyadh, another in eastern Iraq — showed a precision that has analysts probing whether Moscow supplied targeting data or upgraded drone tech. No firm conclusion yet, but it's another marker of how far Russian backing for Tehran may extend as the wider conflict widens.
Over in Lebanon, a Lebanese official confirmed Lebanon and Israel will hold their next round of US-brokered talks on 4 August in Italy, Reuters reports. This comes after Israel pulled its forces from South Lebanon as part of a US-brokered truce premised on Beirut exerting military authority over Iran-backed Hezbollah forces.
The 1H bloodbath is starting to make itself visible. Regional M&A value nearly halved y-o-y, but the numbers hide as much as they show. There are some pockets (ahem, Saudi Arabia and the UAE) where the dealmaking machine has hardly hit a snag, and the transactions that made it through during the first six months of the year are as big as ever.
The 47% y-o-y drop in 1H 2026 regional M&A value to USD 48.7 bn is still steep, but it’s a lighter drop than we saw in 1Q, Zawya reports, citing LSEG data. Dealcount barely moved, down just 2% y-o-y to 642, which means the average deal shrank hard: c. USD 76 mn this year against an implied c. USD 140 mn in 1H 2025.
Why it matters: A near-halving in value against a flat dealcount is less of a frozen market and more an indication that caution about size and risk is factoring in more heavily. For dealmakers, that argues for structuring around smaller, more contained bets rather than waiting out the volatility for big-ticket ones.
The UAE ran the table, with other leaders trailing behind. It was the region’s most in-demand market by a wide margin — USD 16.5 bn in M&A activity, ahead of Saudi Arabia (USD 2.9 bn) and Morocco (USD 1 bn).
Outbound held up better than inbound: MENA investors put USD 25 bn to work abroad (still down 38% y-o-y), while deals targeting the region hit a two-year low for 1H, off 56% amid persistent instability.
Paramount’s L’imad-backed USD 110 bn Warner Bros. Discovery buyout cleared Brussels this week, but it’s clearing regulators faster than it’s clearing courts. The European Commission signed off on the acquisition, conditional on Paramount ending its European distribution tie-up with Universal within 13 months of closing, the Commission said. It’s the latest of some 65 jurisdictions to clear or decline to challenge the merger, Bloomberg reports.
A US federal judgepausedthe Gulf-backed tie-up on a “strong showing” it hurts competition, after 12 states sued to block it. The deal is bankrolled by the Public Investment Fund and the Qatar Investment Authority through L'imad Holding.
What’s next: A US hearing on 3 August decides whether the pause holds until trial. Every day past September the transaction doesn’t close costs Paramount ticking fees owed to WBD shareholders — and a courtroom loss could trigger a USD 7 bn termination fee, on top of the USD 2.8 bn it already paid Netflix to walk away.
Kuwaitraised USD 6 bnin a 2.5x oversubscribed bond issuance on Wednesday, even as the country was under fire from Iranian missiles and drones. The strong demand for the triple-tranche bond allowed Kuwait to tighten spreads by 25 bps, selling three-, five-, and 10-year bonds at 70-85 bps above treasuries.
ALSO WORTH KNOWING-
Misr Capital has tripled its money on the way out of Nile Scan.Elevate Capital has inked a definitive agreement to take Misr Capital — the investment arm of state-owned Banque Misr — out of Nile Scan and Labs for just under EGP 1 bn, in what Elevate Group CEO Tarek Moharram calls an LP swap. “Misr Capital offloaded its investment to a new set of investors raised and managed by Elevate,” Moharram tells us.
Three years, 3x: The deal — pending regulatory approvals — works out to a c. 3.2x all-cash return on the EGP 312 mn Misr Capital paid for its 70% stake in 2023, by our math. Worth a caveat: Elevate never owned Nile Scan outright — it controlled the company only by managing Misr Capital's investment in it, Moharram tells us.
The regional war could have weighed on Bahrain’s banking sector, but it didn’t — and that’s mostly thanks to the proactive measures of the central bank, which moved in tandem with other Gulf central banks to offer support to the sector before it even needed it.
The Central Bank of Bahrain’s liquidity package gave lenders a buffer before the stress peaked, and the decision to defer loan installments helped ease cash flow pressure on companies at the sharpest moment, Mashreq Bahrain’s country head Ahmed Dayyat tells EnterpriseAM. The combined effect: no visible disruption to bank liquidity and — critically — room for banks to keep extending support to clients rather than pulling back.
“Those efforts along with initiatives taken by banks individually managed to ensure that [the sector] sailed very smoothly,” Dayyat tells us. “We haven’t seen any disruptions,” he adds.
That outcome was not inevitable. Bahrain entered the conflict carrying the second-highest government debt-to-GDP ratio of any Fitch-rated sovereign globally, at nearly 150%. Debt servicing was already consuming roughly a third of state revenue. The war spiked the regional risk premium and drove up the cost of an already-expensive borrowing program. In the months before the fighting started, both Fitch and S&P had already downgraded the sovereign further into junk territory.
But there are positive signs: Manama launched a fiscal consolidation package in December — a 10% corporate tax from 2027, energy price hikes for businesses, a 20% cut in administrative spending — that signaled the government understood the math. And the bond market's verdict has been more constructive than the macro backdrop might suggest.
In June, BahrainraisedUSD 1 bn through a 10-year bond issuance — hours after Bahraini defense forces intercepted missiles and drones launched from Iran. Orders crossed USD 3.2 bn, while the yield tightened from initial guidance of 7.5% to 7.125% as demand came in. For a B-rated sovereign to pull off a 3.2x oversubscription while missiles are being intercepted overhead is, at minimum, a market telling you it believes the Gulf support structure holds. The UAE's AED 20 bn currency swap agreement with the CBB, signed in April, is part of that structure — and Dayyat says it's part of what kept confidence in the sector intact through the worst of it.
That’s the backdrop against which Mashreq is making its bet, and it comes as several international banks retreat from the country. The retreat isn't a war-era phenomenon: HSBC sold its Bahrain retail franchise last year, long before the conflict began, part of a broader Gulf retail exit. Standard Chartered is now weighing the same move — the bank confirmed it is exploring a sale of its wealth and retail banking business in Bahrain while keeping its corporate and investment banking franchise, the latest step in a multi-year global retail retrenchment that has already taken it out of Jordan, Lebanon, and several African markets.
Morocco-Germany power cable project on ice: The USD 30 bn Sila Atlantik project — envisioned as the world’s longest subsea power cable, running some 4,800 km to feed up to 15 GW of Moroccan solar and wind into Germany — has reportedly stalled over disputes on project structure and guarantees. It's a reminder that the renewables-export dream still trails the fossil-fuel reality moving barrels and megawatts today.
Wheels down
Delta Air Lines willlaunch direct flights to Saudi Arabiain October — the first US carrier to do so in 25 years. Flights start just ahead of the Kingdom’s flagship Future Investment Initiative. Sales are “softer than anticipated” thanks to the Iran conflict, but Delta president Peter Carter isn’t blinking. “We think this is going to be temporary,” he told Semafor.
Saudi airspace stayed largely open through the war while other regional hubs went dark for weeks, which Carter thinks gives Riyadh a bigger role in regional travel. By comparison, Virgin Atlantic has dropped London-Riyadh, and Air Canada, Air France, and British Airways have axed most Gulf services until at least October.
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The UAE is moving fast to bulk out its east coast Hormuz bypassing options, with DP World inking an in-principle agreement with the Fujairah Ports Authority to develop two new deepwater terminals in Fujairah under a 50-year concession, it said in a statement. Construction will be carried out in phases and is expected to take 24-30 months from the start of works.
What it adds: Al Rugaylat, a container and multi-purpose terminal, will handle up to 2.5 mn TEUs, 1.7 mn tons of general cargo, and 190k car-equivalent units a year; Dibba, a general cargo terminal, adds 3.6 mn tons a year. Together they lift DP World's UAE container handling capacity from 19.4 mn TEUs to nearly 22 mn TEUs — a roughly 13% jump. Both sites sit on the Gulf of Oman, outside the strait entirely, and connect into Jebel Ali and Jafza through DP World’s inland network.
Washington is preparing to reopen its embassy in Libya after nearly 14 years away. The State Department has told Congress it plans to allocate nearly USD 41 mn toward security work for a “phased resumption” of embassy operations — the first real money behind an effort flagged back in March.
The framing is pure great-power competition: Libya’s Mediterranean location and its weight in “energy markets and migration flows” make it vital, the State Department said, warning that instability has drawn in “near-peer competitors, notably Russia.” Officials from Libya's rival western and eastern camps have recently met Marco Rubio and Africa adviser Massad Boulos.
Background: The Tripoli embassy has been shuttered since July 2014, when conflict engulfed the country, and US diplomats have since worked out of Tunisia and Malta.
Breakneck speed
The UAE is moving faster than planned on its USD 1.4 tn US investment pledge, Foreign Trade Minister Thani Al Zeyoudi told Bloomberg, pointing to closer ties with Washington as the Trump administration eases restrictions on exports of advanced AI chips to the Emirates.
The ten-year timeline could be getting shorter, he added. The framework agreement was announced last year, and covers UAE investments in the US’s AI infrastructure, semiconductors, energy, and manufacturing sectors. Al Zeyoudi cited the US’ recent upgrading of the UAE’s export status as helping the Emirates on its way to the investment target. The move opened the door for the UAE government and approved companies, including G42 and Core42, to buy advanced US chips, satellites, and defense equipment.
The UAE will start taking imports of US chips “very soon,” he said, adding that delivery will go to UAE-US projects like the 5 GW US-UAE data center complex in Abu Dhabi, which is expected to host US firms like OpenAI.
Train wreck?
The renewed US-Iran conflict could fuel inflation and more than halve global growth. Prolonged conflict could push interest rates higher and slash global growth to as low as 1.3% from 2.9% last year, World Bank Chief Economist Indermit Gill tells Reuters. The bank’s June outlook modeled three scenarios, with the worst-case assumption of the conflict lasting six months already close to materializing. Damage to regional oil infrastructure would also disrupt supplies of fertilizer, helium, and sulfur.
Developing countries would be hardest-hit: Rising inflation could leave heavily indebted economies struggling to service their debt within months, crowding out healthcare, education, and other essential spending. 32 low-and middle-income economies are already in debt distress or at high risk, the bank’s June outlook showed, with that figure at risk of rising if interest rates increase.
“It’s a slow-moving train wreck,” Gill said. Even countries that avoid default would be forced to sacrifice long-term priorities to service debt, as developed countries’ debt-to-GDP ratio climbed to 74% in 2025 from 50-55% before Covid-19.
Eroding power
QatarEnergy has extended force majeure on LNG deliveries to buyers in South Korea, India, and Bangladesh — with some notices now pushed to mid-September and possibly October — while leasing out its own tankers through mid-October, Reuters reports, citing trade sources. At least nine QatarEnergy-controlled carriers have been sub-chartered to the likes of Chevron, BP, and Trafigura even as freight rates fall — a sign Doha expects the disruption to persist and would rather keep the fleet earning than wait for a recovery. Qatar accounts for about a fifth of global LNG trade.
Gulf producers’ pricing power is eroding: Asian and European buyers are pressing Qatar and the UAE for lower prices and stronger supply guarantees as continued disruption through Hormuz adds a risk premium, Reuters reported separately.
A buyer’s market: Higher ins. costs and recent shipping disruptions are shifting more bargaining power toward buyers as new long-term contracts come up for negotiation. While the UAE has built a reputation for offering more flexible contract terms, buyers now say future agreements will also need to account for higher geopolitical and ins. risks. Growing production from alternative markets like the US, Canada, and Mozambique is also expected to strengthen buyers' negotiating position in the years ahead, they said.
Some are already pushing on price: Some recent agreements have been signed closer to 12.3% of Brent crude prices, the sources said, suggesting buyers are already negotiating discounts to reflect the higher risk, with pre-war contracts typically priced at 12.6%-12.7%. Buyers are also expected to ask Gulf exporters for commitments to provide replacement cargoes if shipments through Hormuz are disrupted.
Pump it out
OPEC+ will likely wave through another output-target hike from September when it meets on 2 August, three sources told Reuters, expecting the same roughly 188k bbl / d bump as June, July, and August. The seven core producers, including Saudi Arabia, Iraq, and Russia, are racing to reclaim market share for when the Iran war ends.
The catch: The cartel can’t actually pump out the quotas they set. Group output sank to 36.28 mn bbl / d in June, down from nearly 43 mn bbl / d pre-war, with Hormuz throttled and Houthis now hitting Saudi tankers.
Bring your friends
Dubai is offering its residents rewards when friends and family visit Dubai, with the emirate looking to turn its large expat population into tourism ambassadors with a new incentive program that rewards them for hosting visitors, Wam reports. The move comes as the emirate rolls out support and fiscal packages targeting tourism and the wider private sector since the war started.
The details: The “A Dubai Invite” program runs until 31 October, 2026, offering residents of around 200 nationalities reductions on hotel bookings of up to 45%, resort credits across the city, and transport perks. Residents can register guests until 30 September, with arrivals verified by Dubai’s General Directorate of Identity and Foreigners Affairs. Each resident can claim benefits for up to three guest groups.
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