Good morning, friends, and happy FRIDAY. We wrap the week with a busy issue, led by Adnoc Drilling’s acquisition of SLB’s Omani and Kuwaiti drilling business, marking its entry into the two Gulf countries. Also: Azerbaijan’s state oil fund invested in Adnoc Gas Pipeline Assets, Amea Power and Spain Cox formed a new JV, and Fitch expects a 15% Dubai real estate price correction in 2H 2025.

ALSO- Private sector Eid holiday confirmed: Private sector employees in the UAE will receive a paid holiday from Thursday, 5 to Sunday, 8 June 2025 for Arafat Day and Eid Al Adha, the Human Resources and Emiratization Ministry confirmed. The public sector was recently confirmed to have the same days off for the holidays.

💨WEATHER– It’s another hot day today, with Dubai set to see highs of 41°C and lows of 29°C over night, while Abu Dhabi will peak at 36°C with overnight lows of 31°C. Add in around 70% humidity and it’ll feel even hotter across both Emirates.

Temperatures are expected to ease over the weekend, though increasing winds and blowing dust may reduce visibility, according to the National Center ofMeteorology (pdf)..

WATCH THIS SPACE-

#1- The UAE’s political and economic risk will stay low in 2025 thanks to its stable domestic environment and economic strength, according to a recent report from BMI, which gave the country a score of 32.7 in its proprietary Political Risk Index. Abu Dhabi’s foreign policy — built on economic goals and deescalation — shields it from broader fallout, alongside its improved ties with Tehran and a neutral stance on the Red Sea conflict, though a flare-up between Iran and the US or Israel could still pose a risk.

Washington’s latest tariffs aren’t expected to shake Abu Dhabi’s relationship with the US, and Trump’s return is unlikely to affect bilateral military and economic ties. The UAE’s role in the Abraham Accords, its investment footprint in the US, and its historical reliance on American security all help lock in the alliance. Tariffs may create some economic headwinds, but BMI says they’ll be “manageable” even if oil prices remain under pressure.

Ties with China could grow, but to a limited extent: BMI also sees space for the UAE to grow ties with Chinese firms amid US-China tensions, pointing to China National Offshore Oil Corporation’s LNG offtake from Adnoc. However, reliance on US defense and tech cooperation will limit just how far the country can push that relationship. G42 has already distanced itself from China-based firms in favor of deeper ties with Microsoft. The tariffs could also push the UAE closer to other partners as talks on a UAE-EU freetrade pact continue.

#2- The Abu Dhabi Department of Energy rolled out a new strategic framework for the energy and water sector that aims to attract up to AED 400 bn in FDI by 2050, Wam reported. The roadmap also aims to raise local content in core supply chains to 65%, along with a target of 100% Emiratization of critical roles across the sector.

The strategy rests on four main objectives: Ensuring a secure and sustainable supply of energy and water, optimizing efficiency in supply and demand, supporting decarbonization through cost-effective solutions, and boosting the economic value of both energy and water resources. Other initiatives in the framework include expanded AI investments, digital transformation, international partnerships, and regulatory reforms to draw in private capital and international investors.

#3- Dubai’s first ever tokenized real estate asset was fully funded within 24 hours of launch, according to a statement from Prypco, the proptech firm offering the investment platform for Dubai’s real estate tokenization project, which launched earlier this week. The offering drew 224 investors from over 40 nationalities — 70% of whom were first-time buyers in Dubai property — highlighting strong appetite for the new fractional model, the statement said. Average ticket sizes came in at AED 10.7k.

What’s the asset? A Damac Maison Prive unit, according to a photo circulating on LinkedIn of the first property token ownership certificate.

REMEMBER- Damac revealed in January plans to tokenize at least USD 1 bn worth of assets in partnership with blockchain startup Mantra. Prypco is also led by Amira Sajwani, who is also the managing director of sales and development at Damac.

#4- The new UAE-Oman trade zone is already getting interest from UAE firms: Several UAE-based firms have inked a letter of interest (LOI) to explore areas of investment in Al Rawda Special Economic Zone — an industrial and logistics zone being developed between the UAE and Oman, Al Khaleej reports. Companies range from logistics players such as Indu Logistics, Oriental General Trading, and Palmon Group to manufacturers, including Al Bayader, Camtech Manufacturing, Conares, and New East. Retail players like Apparel Group and Spinneys — were also among those expressing interest.

ICYMI- DP World and Oman’s Public Authority for Special Economic Zones signed an agreement to develop and operate the first phase of the Al Rawdah Special Economic Zone in Mahadha in Oman earlier this week. In the rollout of its first phase, the zone will focus on vehicle sector manufacturing, textiles, clothing, steel, and logistics. The first phase of the project is expected to see nearly USD 2 bn in investments.

#5- Gridora inks MoU to fast-track AED 35 bn Abu Dhabi transport projects: Abu Dhabi-based infrastructure platform Gridora has signed its first MoU with the Abu Dhabi Projects and Infrastructure Center to accelerate the rollout of transport infrastructure projects worth at least AED 35 bn, according to a press release (pdf). The two will now establish a working committee to identify pilot projects.

REMEMBER- Gridora was launched last month by ADQ, Modon Holding, and IHC to expedite procurement and execution processes as well as increase public-private partnerships.

#6- Sobha Realty eyes Texas for US expansion debut: Dubai real estate developer Sobha Realty is entering the US market with initial focus on Dallas, Houston, and Austin, Chairman Ravi Menon told Arabian Business. Sobha would manage the entire development cycle and manufacture critical components in-house, but did not disclose an investment figure for the expansion.

HAPPENING TODAY-

#1- The Dubai Chamber of Commerce is on a trade mission to the Philippines and Thailand that wraps today, Wam reports. The delegation includes representatives of companies operating in sectors like food and beverages, automotive, and electronics, who are participating in meetings and sessions with their counterparts in Thailand and the Philippines to explore collaboration prospects.

#2- The Emirates Agriculture Conference and Exhibition 2025 is on its third day today, and runs until Saturday at the Dubai World Trade Center, bringing together policymakers, researchers, and industry leaders to explore the future of sustainable farming in the UAE. The event tackles themes including climate-smart agriculture, water scarcity, food security, and agritech innovation. The event also features a market selling locally-made produce and exhibitions for agricultural technology.

THE BIG STORY ABROAD-

One big story is dominating headlines this morning, and that’s US President Donald Trump’s reciprocal tariffs getting reinstated after a federal appeals court granted the Trump administration a temporary reprieve from an earlier ruling blocking the duties, saying that Trump had exceeded his authority in imposing them. The new tariffs — which do not include sector-specific ones — are now back on the table, and await a response from the plaintiffs next week and from the administration on 9 June.

Markets largely shrugged off the news, with the S&P 500 up narrowly, though the USD lost some ground against the JPY and CHF. (Bloomberg | Reuters | CNBC | Wall Street Journal)

ALSO- The US said that Israel has signed off on a Gaza ceasefire proposal, while Hamas is currently studying it, though senior Hamas officials have said the proposal does not meet its demands on aid or withdrawal of troops. (Reuters)

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MARKET WATCH-

Opec+ to set 2027 output baselines: The 22-member group will set up a mechanism for determining oil production baselines for 2027, tasking the Opec Secretariat with assessing each member country’s maximum production capacity, according to a statement. The baseline figures are expected to serve as a reference point for output policy once the current set of production cuts expire, Reuters reports.

Baselines and quotas have been a source of tension among the group, with countries including the UAE and Iraq increasing their production capacity, further pressing the case for higher quotas, while some African members have seen capacity declines and risk being sidelined, Reuters added.

REMEMBER- Opec+ is set to meet tomorrow to discuss a further output hike for July. The next Opec+ Ministerial Meeting is scheduled for 30 November.

MEANWHILE- Trading activity in the UAE’s Murban crude futures contracts reached a record high this month, Bloomberg reported. Open interest across the full curve in Murban futures climbed to an all-time high of 81k lots earlier in May, Bloomberg added, citing ICE Futures Abu Dhabi data. About two-thirds of the 34 cargo deliveries recorded so far this month in the S&P Global Commodity Insights pricing window were Murban, up from around half of the 32 trades logged in April.

The spike in activity comes amid broader market weakness in light crude grades, driven by higher UAE supply after Opec+ upped its production quota, along with refinery outages that dented demand, Energy Aspect’s oil analyst Richard Jones told Bloomberg.

Murban continues to develop into one of the most relevant benchmarks in global crude pricing, ICE oil markets head Jeff Barbuto told Bloomberg. It is traded against Brent, US oil contracts as WTI, and Dubai crude as the market adapts to shifting dynamics in supply and demand.

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