AGP Executive Report

Middle East Energy Shock: Trump cancelled threatened Iran strikes after talks reached Iran’s top leadership, with claims a peace deal could be signed this weekend and reopen the Strait of Hormuz—though Iran says no final decision yet—keeping oil prices volatile and raising the stakes for Gulf energy security. Saudi Infrastructure & PPP: Saudi Arabia launched a tender for a landmark Makkah development on Al-Hada Road under a 50-year BOOT model, aiming to bring private capital into commercial and mixed-use services. Saudi Ports & Logistics: Saudi Global Ports won a $528m Jubail terminal expansion deal, a direct boost for industrial shipping capacity as regional trade routes adapt. Saudi Industry Watch: Lockheed Martin said it can’t confirm Patriot delivery timelines for allies, including Gulf partners, highlighting uncertainty in air-defense procurement amid shifting US allocation priorities. Energy Market Context: A Fed study finds today’s oil shocks from the Iran war hit inflation and jobs far less than in the 1970s, even as analysts warn of bigger downside if disruptions return. Global Energy Events: Global Energy Show Canada 2026 wrapped in Calgary with 38,000+ attendees and $70.6m estimated local impact, underscoring continued investment focus on energy security.

Water Innovation: Saudi Arabia’s SWA is set to bring back the Innovation Driven Water Sustainability Conference (IDWS) in Jeddah from Dec 7–9, aiming to grow participation by 50% to 10,000+ attendees and spotlight governance, desalination and sustainable water management. Oil & Trade Flows: Saudi crude supply to China is expected to stay at record lows in July, with Aramco shipments around 387,096 bpd as Chinese refiners avoid higher-priced barrels amid weak demand. Energy Diplomacy: China’s National Energy Administration deputy chief met Saudi Aramco in Beijing to discuss global energy security and bilateral oil and gas cooperation as Hormuz disruptions continue. Industrial Projects: Saipem won a €900m EPC contract for Saudi Arabia’s Uthmaniyah Gas Compression Plant under the National EPC Champion Programme, targeting longer field production life. Regional Commerce: Saudi Arabia reopened its market to Lebanese exports after a five-year ban, citing Lebanon’s steps to rebuild state institutions and easing pressure on agriculture and other exporters. Aviation/Logistics: Egypt launched trial operations at Noatum Ports’ Safaga 2 multipurpose terminal, a 30-year concession with AD Ports Group, with first vessels arriving ahead of full commercial start later this year. Construction & Infrastructure: Saudi Arabia’s PPP tender for a new Taif airport project signals continued aviation infrastructure push.

Aviation & Ports: Saudi Arabia is pushing through logistics and capacity upgrades despite regional shocks: Matarat Holding and the National Center for Privatization & PPP launched an RFP for a PPP-built Taif International Airport (BTO, 30 years) targeting 2.5m passengers by 2030, while Saudi Global Ports won a $528m Jubail Commercial Port container terminal expansion with Mawani, aiming to lift throughput to about 2.4m TEUs. Air Connectivity: Riyadh Air completed its maiden London Heathrow flight on Boeing 787 Dreamliners, with plans to expand its network through March 2027. Transport Corridors: Türkiye and Saudi Arabia signed MoUs on logistics services and railway cooperation, building toward a Hejaz Railway revival as an overland alternative to Hormuz-linked disruptions. Energy Shock Watch: With the Strait of Hormuz under pressure, jet fuel prices and flows are shifting; US refinery output and export demand are rising, and economists warn oil volatility could still feed inflation and growth risks. Policy & Diplomacy: France’s Macron invited Egypt, Saudi Arabia, Qatar and the UAE to a G7 working session focused on the Middle East war, Hormuz and Iran talks.

Saudi Economy & Oil Outlook: Riyad Capital expects Saudi real GDP growth to jump to 6.8% in 2027 (from 0.9% in 2026), driven by a gradual reopening of Strait of Hormuz routes from September and a rebound in crude output to 10.4m bpd. Port & Logistics Expansion: Saudi Ports Authority signed a concession with Saudi Global Ports to expand Jubail Commercial Port, lifting capacity to about 2.4m TEUs and investing over SAR 2bn ($528m). GCC Construction Costs: AESG says Gulf construction remains strong, with concrete supply up 13% and reinforcement steel up 16% since Q4 2025, as building-material costs keep rising. Red Sea Rerouting: Suez Canal traffic jumped in April, with tankers up 28% as Hormuz disruption pushes more flows toward Egypt and Saudi Red Sea routes like Yanbu. Aviation Push: Riyadh Air launched its second national carrier service after Boeing delivery delays, aiming to make Riyadh a global hub. Rail & Logistics Cooperation: Saudi and Türkiye signed MoUs covering logistics services and railway tech, including digitalization and localizing railway industry. Industrial & Tech Deals: GFH Bank and OCTO will develop a $300m logistics and industrial platform across Saudi and UAE. Energy Security & Markets: Major Gulf stocks slipped amid fresh US-Iran strikes, while oil prices stayed volatile. Mining Licensing: Saudi MIMR qualified 24 bidders for exploration licenses across three mineral belts, starting the multi-round auction phase. AI for Mobility: HUMAIN and NVIDIA plan to bring the DRIVE Hyperion robotaxi-ready platform to Saudi, backed by large compute buildout.

Rail & Logistics: Saudi Arabia and Türkiye signed MoUs in Riyadh to boost railway cooperation, including standards, technology transfer, engineering work, safety, workforce training, and localization—part of a wider push to revive the Hejaz Railway and create alternative trade routes. Mining & Industry: Saudi Arabia’s Ministry of Industry and Mineral Resources qualified 24 local and international bidders for Round 10 of mineral exploration licensing, spanning belts across Madinah, Makkah, Riyadh, Qassim and Hail. Energy Disruption: Qatar halted LNG output and Saudi shut a major refinery after regional strikes and precautionary measures, underscoring how Middle East tensions are reshaping oil and gas flows. Aviation & Mobility: flynas opened its sixth Saudi operations base in Al-Qassim, expanding domestic connectivity as Riyadh Air also ramps up new routes. AI & Power Demand: A UN warning says AI could soon use 3% of the world’s electricity and more water than needed for drinking—raising pressure on energy planning for data centers. Food Safety Oversight: Saudi SFDA penalized 1,753 erring food establishments, tightening compliance across the industrial food sector.

Energy & Shipping Risk: Strait of Hormuz disruption is still reshaping oil flows, with Fitch warning the bottleneck is temporary and tied to logistics, not permanent output loss, while analysts note “clandestine” transits may be keeping markets calmer than feared. Geopolitics & Industry: Israel and Iran appeared to pause strikes after trading fire, but the wider Middle East risk remains a live variable for energy costs and supply chains. Saudi Projects & Construction: Alramz shelved Tadawul IPO plans due to weak sentiment, while Saudi Arabia’s contractors bulletin said May project awards jumped to nearly SAR 30bn (+154% month-on-month), with infrastructure leading. Real Estate Development: Alramz and Assayel launched a SAR 370m Shariah-compliant Riyadh residential fund for a 290-apartment project in Al Raed. Aviation & Connectivity: Riyadh Air opened bookings for new routes, with the first commercial flight to London Heathrow on 10 June and additional services to Dubai and Cairo. Food & Agri-Industry: Saudi Arabia and Russia signed 13 deals worth $1.28bn to localize industries and boost food security, including veterinary vaccine and livestock feed cooperation. Logistics & Ports: AD Ports launched trial operations at Noatum Ports’ Safaga Terminal in Egypt, positioning it as a Red Sea gateway for mining and trade. Tech & Manufacturing Signals: Aramco and Emerson partnered on end-to-end corrosion monitoring, pointing to deeper industrial digitization.

Oil & Shipping Shock: OPEC+ agreed to raise July output by 188,000 bpd, but analysts warn the real bottleneck is delivery as the Strait of Hormuz remains disrupted and Red Sea risks rise. Red Sea Threat: Yemen’s Iran-backed Houthis announced a total ban on Israeli shipping in the Red Sea, escalating pressure on global trade routes and energy markets. Aramco Tech Push: Aramco and Emerson will co-develop an end-to-end corrosion monitoring system using AI to predict failures and optimize maintenance across Aramco assets. Food Safety Clampdown: SFDA penalized 1,753 non-compliant food establishments and blocked 1,057 tons of substandard products in Q1, citing issues from licensing gaps to contamination. Transport & Industry Buildout: Eastern Province unveiled SR406m road projects and signed 3bn+ in transport agreements, while OHL Arabia and Hassan Allam won a 22.7-km Dammam 2nd Industrial City rail link contract. Energy Policy Ripple: Saudi-linked global fuel pressures also show up in India’s Ujjwala LPG scheme, where subsidized cylinder entitlement was cut to four per year for beneficiaries. Compliance & Trade: USTR proposed new Section 301 forced-labor tariffs of 10%–12.5% on imports from 60 economies, with comments due July 6.

Oil Market Shock Watch: A Fed study says today’s Iran-war oil shocks are hitting inflation less than in the 1970s and the employment impact has largely faded, even as Saudi officials warn Brent could push above $180 and the IEA calls Hormuz the biggest supply shock on record. OPEC+ Output Debate: OPEC+ is weighing another July quota hike of about 188,000 bpd to cool prices, but analysts say limited spare capacity and Hormuz realities mean the move may not shift prices much. Red Sea Disruption Risk: Houthis declared a complete ban on Israeli shipping and warned of attacks in the Red Sea/Bab al-Mandeb corridor, raising fresh pressure on Gulf export routes and shipping costs. Saudi Defense Industry: Navantia won a five-year Saudi corvette support contract for maintenance, spare parts and a localization plan at King Faisal Naval Base in Jeddah. Saudi Energy & Infrastructure Signals: Saudi energy officials continue to frame the kingdom as a reliable, flexible supplier while regional tensions keep energy logistics front and center. Industry Research Roundup: New market reports flag growth themes from corporate training to biopharma, inhalers, bioreactors and hyperloop—mostly global forecasts, but relevant for Saudi procurement and industrial planning.

Oil Market Watch: OPEC+ approved a fourth straight increase in July oil output quotas, adding 188,000 bpd despite the Strait of Hormuz still being largely closed and limiting real barrels moving; Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman agreed the hike while stressing flexibility to pause or reverse if conditions change. Energy Security & Shipping: The Hormuz disruption continues to reshape logistics and costs, with analysts calling the quota move mostly symbolic until physical supply routes reopen. Industrial Partnerships: Saudi Industry Minister Bandar Al-Khorayef met investors in Russia at SPIEF to deepen cooperation in mining and industrial localization, including work on mineral exploration technologies and supply-chain development. Trade & Logistics Links: Maersk launched a new weekly Northern Europe–Egypt service (Sea Baltic Link) to cut transit variability and improve reliability into Port Said and Alexandria, reflecting demand for steadier Mediterranean routing. Aviation & Fuel Pressure: Ethiopian Airlines said it has resumed most Gulf/Middle East flying but faces higher fuel costs after Hormuz-linked supply disruptions, including a longer contract with a Saudi fuel supplier. Urban Development: PIF and Talaat Moustafa signed an MoU to explore mixed-use real estate projects across Saudi, aiming to accelerate delivery across residential, commercial, hospitality and retail.

Critical Minerals: Saudi Arabia’s Industry Minister Bandar Alkhorayef says the Kingdom wants deeper Russia ties in rare earths and critical minerals, aiming to strengthen resilient supply chains. Energy Security: Prince Abdulaziz bin Salman reiterates Saudi Arabia will stay a reliable energy supplier “under all circumstances,” while noting plans to sign 30 agreements with Russia across energy and industry. Aviation Resilience: IATA says Saudi carriers have moved fast to absorb shocks from airspace closures, projecting 3%–5% sector growth despite big passenger drops. Industrial Diplomacy: Saudi Arabia boosts industrial cooperation with St. Petersburg, discussing technology localization and industrial-city development. Shipping & Trade Routes: Turkey’s Hejaz Railway modernization plan targets an alternative route to the Strait of Hormuz via Oman, with Saudi talks in progress. Regional Energy Pressure: OPEC+ is set to consider another output increase as Hormuz disruptions keep export routes strained, with Iraq facing particular oil-revenue pressure. Business Links: SABCCI inaugurates its office to deepen Saudi-Bangladesh trade and investment ties. Consumer Energy Spillover: Global LPG volatility tied to Hormuz disruptions is driving higher costs abroad, while Saudi-linked benchmarks continue to ripple through regional fuel pricing.

Gulf Energy & Trade Shock: Iran’s missile and drone attacks on Bahrain and Kuwait drew fresh condemnation from Saudi Arabia and other GCC states, as the Strait of Hormuz remains effectively blocked and shipping disruptions keep pressure on regional logistics and energy costs. Saudi Diplomacy & Regional Stability: Saudi Arabia reiterated its “categorical rejection” of the attacks and backed measures to protect Bahrain and Kuwait’s sovereignty, while the wider crisis continues to shape Gulf industrial planning. Saudi-Linked Maritime Investment: Pakistan signed an MoU with Saudi and local partners to develop a 140-acre Karachi Port Trust waterfront maritime business district, with Saudi interest also extending to port infrastructure and logistics cooperation. Saudi Energy Infrastructure: Saudi Energy commissioned the world’s largest 2.5GW grid battery energy storage project, signaling continued momentum in power reliability and grid modernization. GCC Corporate Snapshot: GCC listed companies’ Q1 2026 net profits rose to a record $67.9bn, led by Saudi earnings growth, with energy and banking supporting the rebound. Food Supply Resilience: WFP said fortified biscuits reached Afghanistan after rerouting through nine countries due to border closures and Hormuz disruption, highlighting how industrial supply chains are being stress-tested. AI Sustainability Watch: A UN-linked warning says AI’s energy and water demand could rise sharply by 2030, adding new pressure on data-center power planning across the region.

Saudi-Malaysia Cultural Ties: Saudi Arabia’s Translation Association and Malaysia’s Translators Association signed an MoU at KLIBF 2026 to boost cooperation in translation and publishing, supporting cultural and knowledge exchange. Gulf Security & Energy Risk: New US-Iran strikes across the Gulf followed drone interceptions near the Strait of Hormuz, with missiles fired toward US facilities in Kuwait and Bahrain and air raid alerts reported. Saudi-Pak Maritime & Infrastructure Deals: Pakistan signed an MoU with Saudi partners to explore a 140-acre maritime business district at Karachi Port Trust, while separate agreements cover ports, the Hyderabad–Karachi motorway, real estate, and minerals—aimed at deepening B2B investment. Saudi-Russia Pharma Cooperation: Saudi Food and Drug Authority signed an MoU with Russia’s drug regulation institute to strengthen GMP, inspections, and training under SPIEF. Saudi Heritage Find: Diriyah archaeologists uncovered an Abbasid-era ceramic jar holding 100+ pieces of gold, silver, and gemstone jewellery along the medieval Hajj route. Energy Market Pressure: OPEC output fell to a multi-decade low as Hormuz disruptions and the Iran blockade continue to squeeze supplies.

Nuclear Safety & Diplomacy: Qatar reiterated its condemnation of the attack on the UAE’s Barakah Nuclear Power Plant at an IAEA emergency session in Vienna, calling it a violation of international law and nuclear safety principles, while the IAEA warned such strikes are a “no-go” for peaceful nuclear facilities. Energy Security & Shipping: With Hormuz risks still shaping regional logistics, analysis highlights how Gulf rerouting options (including Saudi overland routes) are easing pressure but not fully replacing lost seaborne capacity, keeping insurance and freight costs in focus for exporters. Saudi-India Connectivity: Riyadh Air and Air India moved toward deeper cooperation via codeshare and interline arrangements, aiming to improve passenger links between Saudi Arabia and India. Oil & Industrial Services: Weatherford agreed to acquire NCS Multistage to expand well construction and completions capabilities, pointing to growth in Saudi unconventional gas work. Procurement & AI: A Middle East procurement forum is set to spotlight how AI, supplier risk, and geopolitical uncertainty are reshaping sourcing strategies across the region.

Aramco Contracting: McDermott was selected by Aramco for a multi-year PMC long-term agreement, teaming with Fayez Engineering to deliver engineering and project management for large downstream, petrochemical and low-carbon work across Saudi Arabia. Energy Logistics: Methanol prices are expected to stay above pre-war levels through 2026 as Gulf supply and Hormuz-linked shipping disruptions keep pressure on global availability. Events & Sponsorship Economy: Saudi Arabia’s events industry is forecast to jump from $6.1bn (2021) to $17.6bn by 2031, with sports and music concerts leading growth and sponsors driving spend. Hospitality Development: ROSHN Group signed with Tatweer Buildings Company to design, build and supervise a new public educational facility in East Riyadh’s WAREFA community, targeting up to 500 students. Digital & Business Links: Saudi Arabia and Hong Kong are set to deepen cooperation in investment, new energy, AI and infrastructure under the Saudi-Hong Kong Business Council push tied to Vision 2030. Industrial Capacity Watch: Saudi energy demand hit record levels during Hajj, underscoring the kingdom’s power system strain during peak seasonal logistics.

Aviation Milestone: Riyadh Air received its first two new-build Boeing 787-9 Dreamliners (HZ-RXAA, HZ-RXAB) on June 4, after Boeing delays tied to manufacturing and cabin fitting issues—an important step as the carrier nears public launch. Impact Investing: Saudi billionaire Lubna Olayan’s Dara Holdings backed Anara Impact Capital, which held its first close at $48m (targeting $50m) for seed-to-Series A impact startups across learning, wellbeing, financial access and climate resilience. Energy Diplomacy: Saudi Energy Minister Prince Abdulaziz bin Salman used the St. Petersburg International Economic Forum to push for stable global energy markets, calling the Kingdom a “flexible” supplier amid Iran-Ukraine disruption and OPEC+ uncertainty. Power & Renewables Deal: ACWA Power and Emerging Power Inc. (EPI) signed an agreement to jointly explore up to 5,000MW of renewable and gas-fired capacity in the Philippines, with a path to bid in the government’s Green Energy Auction. Trade & Logistics: A Saudi trade delegation led by Prince Mansoor bin Mohammed met Pakistan’s PM Shehbaz Sharif to expand cooperation in ports, highways, airports outsourcing, energy, power distribution and IT. Regional Infrastructure: Turkey discussed reviving the Hejaz Railway and extending it toward Oman, using Saudi links to create an alternative route to the Strait of Hormuz.

Aramco Engineering Push: McDermott was selected by Saudi Aramco as one of 11 contractors for a long-term project management consultancy deal, teaming with local partner Solutions Leaders Fayez Engineering to deliver pre-FEED/FEED and PMC services across energy, downstream, petrochemicals and low carbon projects. Power Sector Deal: Korea Electric Power Corporation (KEPCO) won the second phase of Aramco’s Jafurah cogeneration project, signing power and steam sales agreements and an EPC contract via Doosan Enerbility, targeting 331MW capacity and steam supply for 17 years. Saudi Investment Governance: Saudi Arabia’s Public Investment Fund began replacing foreign executives with Saudi nationals across portfolio companies as it tightens capital allocation ahead of major events. Energy Market Reality Check: Saudi Aramco leadership warned that even if the Strait of Hormuz reopens, markets won’t rebalance quickly—normalization could stretch into 2027—keeping pressure on fuel and logistics costs. Regional Trade & Logistics: Pakistan is seeking Saudi investment in ports, shipping and logistics as maritime ambitions expand. Hajj Operations: First groups of returning pilgrims continued to arrive home, highlighting ongoing logistics and coordination tied to Saudi Hajj services.