Gulf projects withstand war led by Saudi Arabia and UAE

'Al-Eqtisadiah' from Riyadh

Thursday, 23 July 2026 9:56 | 2 minutes read

Possible award of Riyadh Metro Line 7 project may be most important project of second half. 'Bloomberg'

The second half of the year is expected to see a wave of Gulf project awards led by Saudi Arabia and the UAE, with investment programs continuing in the two largest Arab economies, despite rising shipping and insurance costs.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, wrote in a recent bank report reported by 'Al-Sharq Bloomberg', that the forecasts come after project data in the second quarter showed resilience in activity despite the war's repercussions on the region, indicating policymakers' determination to proceed with investment programs, especially after the conflict demonstrated the need to expand trade, supply chains, and the logistics sector.

Malik added, 'Regional developments have reinforced the importance of building greater resilience by diversifying major export routes, including hydrocarbons and chemicals, and avoiding reliance on the Strait of Hormuz. We expect related projects to become more visible in late 2026 and early 2027.'

Billion-dollar projects

The report predicted that the transport sector in Saudi Arabia would play a major role in activity during the second half, including the possible award of the Riyadh Metro Line 7 project, estimated at about $15 billion, according to the bank.

Mon, 29 2026

Projects the report expects to be awarded include $10 billion for expansion of Dubai International Airport, and another $10 billion for the second phase of the 'Ta'ziz' industrial chemicals zone in Abu Dhabi, along with oil and gas projects. Malik said first-half data showed 'willingness to proceed with development plans.'

Strong forecasts come despite a 26.1% decline in the value of awarded contracts in Gulf countries during the second quarter compared to the previous three months, but they rose 32% year-on-year, remaining in line with levels recorded in the last quarter of 2025, according to the report.

Thu, 02 2026

Jump in contracts

Saudi Arabia, the 'largest Arab economy,' recorded a jump in contract value during the second quarter, indicating progress in the next phase of the kingdom's plan to diversify its economy and enhance resilience, although the value of awards remained below 2023 and 2024 levels.

The UAE recorded the highest value of awarded contracts in the Gulf during the first half, contributing to the largest increase in the value of projects under implementation, led by construction and transport sectors.

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