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This is the web version of Fortune Gulf Brief, a weekly newsletter providing smart coverage on the capital, leaders, and policies transforming one of the world\u2019s most consequential regions.\u00a0Sign up to get it delivered free to your inbox.<\/p>\n
Welcome to this week\u2019s Fortune Gulf Brief.\u00a0We\u2019ll\u00a0be covering:\u00a0\u00a0<\/p>\n
Thank you for subscribing to Fortune Gulf Brief and joining our community. Given the significant news flow from the Gulf early in the week, going forward, we\u2019re moving the newsletter from Tuesday to Wednesday to give you a fuller picture of the trends and stories that matter.<\/p>\n
Fortune Exclusive:\u202fThe\u00a0inside track on the UN-backed plan\u00a0to reopen Hormuz\u202f\u00a0<\/p>\n
Saudi Aramco\u2019s war windfall:\u00a0Profits surge 33%\u00a0<\/p>\n
Saudi economy stumbles, but oil windfall softens the blow\u00a0<\/p>\n
Oman accelerates Vision 2040 with $1.9 billion project blitz\u00a0<\/p>\n
U.S. bolsters UAE AI partnership with $300 million chip funding<\/p>\n
And the\u202fthree things we enjoyed reading this week\u202f<\/p>\n
Another week, another cycle of conflicting rhetoric and mixed messages on the U.S.-Iran conflict.\u00a0<\/p>\n
Late on Sunday, Donald Trump posted on his Truth Social platform that Iran and other Middle Eastern countries had asked \u200cfor time to complete a deal that would lead to \u201cthe Immediate, Complete and Total\u201d reopening of the Strait of Hormuz.\u202fTrump added that negotiations with Tehran are set to begin on Monday after he decided to halt a plan for the U.S. to launch \u201cthe biggest attack since World War II.\u201d\u00a0<\/p>\n
But on Monday, Iran\u2019s foreign ministry flatly denied that it was negotiating with the U.S. or that there were any plans to do so. Iranian Foreign Ministry spokesperson,\u202fEsmaeil\u202fBaghaei\u202fsaid that Tehran is instead in discussions with Oman to secure a temporary safe route through the Strait of Hormuz.\u202f\u00a0<\/p>\n
The previous day,\u202fBaghaei\u202fsaid that the proposed route had \u201cno link to the Strait of Hormuz being opened or closed. That is a separate discussion.\u201d<\/p>\n
Is there any way out of the\u202fimpasse?\u202fMaybe.\u00a0The\u00a0UN has developed\u00a0a \u201cmechanism\u201d\u00a0to reopen Hormuz which could resolve many of the intractable issues that both the U.S. and Iran are grappling with.\u202f\u00a0<\/p>\n
Talking to me about the details,\u00a0John Denton, secretary general of the International Chamber of Commerce (ICC),\u00a0outlined what it entails and how it could work in practice.\u202f\u00a0<\/p>\n
\u201cWhat\u202fwe\u2019ve\u202fstrived to do in building this mechanism is to ensure that it will be acceptable and usable by that economic ecosystem [the Strait of Hormuz]. And that requires, obviously, deconfliction of the area, as well as\u202fa commitment to the neutral governance of the area,\u201d he said.\u202f\u00a0<\/p>\n
You can read my interview with him here, a fascinating insight into just how complicated the war\u202fin\u00a0that region has become.\u00a0<\/p>\n
Melissa Hancock<\/p>\n
As ever, thanks for reading, and do keep in touch with your thoughts and ideas. See you next week.
melissa.hancock@fortune.com\u00a0<\/p>\n
Saudi Aramco profits jump as higher crude prices boost earnings\u202f<\/p>\n
Saudi Aramco\u202freported a 33% jump in second-quarter profits,\u00a0with higher crude prices lifting earnings despite lower sales due to the\u00a0U.S.-Iran war.\u00a0<\/p>\n
Adjusted net income rose to $33.4 billion, from $25.2 billion a year earlier,\u00a0beating\u202fanalysts\u2019 profit estimates of $31.1 billion.\u202fAramco sold its oil at $108.10 per barrel in the second quarter, compared with $66.70 per barrel a year earlier, Bloomberg\u202freported.\u202f\u00a0<\/p>\n
Aramco President & CEO Amin H. Nasser said that the company capitalized on \u201cstrategic infrastructure such as the East-West Pipeline, storage capacity, and export terminals\u201d to\u202fmaintain\u202fbusiness continuity despite the\u202f\u201cunprecedented supply disruption through the Strait of Hormuz.\u201d\u202f\u00a0<\/p>\n
Aramco has been ramping up fuel exports from its Red Sea refineries\u00a0on its west coast. However, those shipments are now facing growing risks from Houthi attacks.\u00a0<\/p>\n
Saudi GDP shrinks but higher oil prices ease fiscal pain\u202f<\/p>\n
Saudi Arabia\u2019s\u202feconomy shrank 4.8% in the second quarter, marking its first contraction since 2023 and the sharpest slowdown since the pandemic, according to the General Authority for Statistics.\u202f\u00a0<\/p>\n
The economic contraction is in sharp contrast to the 3% growth that\u00a0the Arab world\u2019s largest economy recorded in the first quarter of the year.\u202f\u00a0<\/p>\n
The kingdom\u2019s non-oil economy\u202fremained\u202fa relative bright spot,\u202fexpanding by 0.6% during the second quarter, but it was still a notable slowdown compared with a 2.9% expansion in the previous quarter.\u00a0<\/p>\n
Overall, the U.S.-Iran war has weighed heavily on the kingdom\u2019s oil sector, with\u202foil activity plunging 24.7% in the April-June quarter.\u202fThe rise in the oil price has offset some of the downside effects.\u00a0<\/p>\n
The kingdom posted a budget shortfall of SAR34.3 billion ($9.1 billion) in the second quarter, according to the finance ministry.\u202fThat compares with a SAR125.7 billion deficit in the first quarter.\u00a0<\/p>\n
If oil prices average around $90 a barrel, Saudi Arabia\u2019s fiscal deficit could narrow to about 5% of gross domestic product (GDP) in 2026, down from 5.8% last year, according to Mohamed Abu Basha, head of macroeconomic analysis at investment bank EFG Hermes.\u202f\u00a0<\/p>\n
The\u202fIMF also noted last week\u202fthat: \u201cHigher oil prices are expected to more than offset lower export volumes, generating a revenue windfall.\u201d\u00a0<\/p>\n
Debt Down, Investment Up: Oman Speeds Up Economic Diversification<\/p>\n
Oman agreed to back\u202f74 projects worth $1.9 billion\u202fand issued 60 new tenders valued at $949 million during the first seven months of 2026, as the sultanate accelerated infrastructure spending to diversify its economy.\u202f\u00a0<\/p>\n
Spread across strategic sectors including transport, healthcare and digital infrastructure, the projects support the\u202fobjectives\u202fof Oman Vision 2040, its long-term economic diversification strategy.\u00a0<\/p>\n
Among the biggest contract awards was a $521 million deal to supply pharmaceuticals,\u202fvaccines\u202fand serums. Another key project is the $410 million expansion of the Muscat Expressway, designed to ease traffic congestion and support the capital\u2019s ongoing urban development.\u00a0<\/p>\n
In mid-July,\u202fFuture Fund Oman (FFO), an investment vehicle of the sultanate\u2019s sovereign wealth fund, Oman Investment Authority (OIA),\u202funveiled a portfolio of 105 strategic projects and investments worth $1.74 billion.\u00a0<\/p>\n
The portfolio includes $585 million in commitments from FFO and about $458 million in local investment, covering sectors such as renewable energy, advanced manufacturing, tourism, healthcare, medical\u202ftechnology\u202f, and food industries.\u00a0<\/p>\n
“This portfolio directs capital toward nationally prioritized sectors and strengthens Oman’s appeal to global investors,” said Mulham Al Jarf, the deputy president of Investment at the OIA.\u202f\u00a0<\/p>\n
Oman more than halved its government debt\u202fto around 36% of GDP in 2025\u202ffrom a peak of 68% in 2020,\u202fprompting the three major ratings agencies to upgrade the sultanate, restoring it to investment-grade status.\u202f\u00a0<\/p>\n
On 21 July, Fitch ratings\u202fissued a report stating\u202fthat: \u201cOmani banks\u202fcontinue to benefit from favourable operating conditions, supported by economic growth and fairly high oil prices.\u201d It noted that the sector\u2019s operating environment is likely to remain resilient despite the\u00a0Iran\u00a0war, as Oman is the most insulated Gulf country from the conflict.\u00a0<\/p>\n
The Big Number
\nU.S. backs UAE’s GlobalFoundries with $300m for AI chip innovation<\/p>\n
UAE-backed chipmaker\u202fGlobalFoundries will receive $300 million from the U.S. government\u202fto advance research and development in silicon photonics, a move aimed at making AI data centers faster and more energy-efficient.\u00a0<\/p>\n
The chipmaker, in which Abu Dhabi sovereign wealth fund\u202fMubadala holds a 73% majority stake, aims to boost data transfer speeds to 400 gigabits per second and achieve up to five times greater energy efficiency. Silicon photonics technology uses light instead of electrical signals.\u202f\u00a0<\/p>\n
The $300 million announced last week will add to the $1.5 billion in funding awarded to GlobalFoundries in 2024 to expand its manufacturing facilities in Malta, New York, and Burlington, Vermont.\u00a0<\/p>\n
The funding further strengthens the US-UAE AI partnership, aligning with the Trump administration’s push to invest in technologies expected to underpin the next generation of AI infrastructure and bolster U.S. competitiveness in the global technology race with China.\u00a0<\/p>\n
Last month, the U.S. significantly eased export restrictions on the UAE,\u202fmaking it much easier for approved UAE organizations to buy cutting-edge AI chips from companies such as Nvidia and AMD.\u202f\u202f\u00a0<\/p>\n
UAE AI companies G42 and Core42 are among those that are no longer\u202frequired\u202fto obtain licenses for AI chips and servers.\u202f\u00a0<\/p>\n
Meanwhile,\u202fon Monday,\u202fMubadala said it is committing $170 billion, or roughly 44% of its portfolio, to U.S. interests, with investments across AI, semiconductors, health care, energy, and advanced manufacturing.\u202f\u00a0<\/p>\n
\u201cThat scale is proof of our confidence in the long-term strength of the American economy,\u201d said Ahmed Saeed Al Calily, chief\u202fstrategy\u202fand risk officer for Mubadala.\u202f\u00a0<\/p>\n
The 3 things we enjoyed reading this week
\nTel Aviv-based\u202fZenity\u202fhas just raised $125 million, with SoftBank, Hitachi, and LG jumping\u202fin on\u202fa bet that the real AI danger isn’t the models themselves but the autonomous agents\u202fnow acting inside corporate systems, as my Fortune colleague Nicholas Gordon explains in this\u202ftimely\u202fpiece. Rather than screening prompts or auditing outputs after the fact,\u202fZenity\u202fwatches agents in real time and can block or alter their actions the moment they\u202fstart acting out of scope. Sound familiar? The round lands weeks after OpenAI disclosed that two of its models escaped a sealed test environment and hacked into Hugging Face’s systems.\u202f\u202f
\nParamount Skydance\u00a0finally landed its $110 billion Warner Bros. Discovery deal\u2014only to watch it slide into a legal and costly quagmire.\u00a0Starting\u202fon\u202fSeptember 30,\u202fParamount\u202fwill\u202fbe required\u202fto pay\u202fa $650 million quarterly “ticking fee” until\u202fthe start of the legal battle over ownership. With\u202feven\u202fthe trial date itself\u202fin dispute\u202fand Gulf sovereign funds backing much of the equity amid regional turmoil, the Ellisons may have won the bidding war only to inherit a much costlier fight.
\nEsports\u00a0is\u00a0becoming big business in\u00a0the\u00a0Gulf and celebrations were in order when\u00a0Abu Dhabi’s\u00a0Nigma\u00a0Galaxy team stormed to the Esports World Cup Dota 2\u00a0quarter-finals\u00a0in Paris, winning nine out of ten matches. They now sit three victories away from becoming the UAE’s first-ever champions. Dota 2, for those non-aficionados amongst us, is a multiplayer \u201cbattle arena\u201d game. Driving the success is a Lebanese duo with a great backstory (one player used to idolize the other) – which William Mullaly details in this great piece for The National. With a $75 million prize pool up for grabs, Nigma Galaxy hopes a win would signal that the Arab gaming scene is finally being taken seriously. The Esports World Cup is being held in Paris until August 23, bringing together more than 2,000 players from 200-plus clubs and more than 100 countries. \u201cEarthshaker!\u201d – if I am using the Dota 2 vocabulary correctly…<\/p>\n
#CouldaUNbacked #plan #reopen #Hormuz #break #deadlock<\/p>\n","protected":false},"excerpt":{"rendered":"
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