meed-logo

line1 line2 line3
SIGN IN / REGISTER

Riyadh takes the diplomatic initiative

2 April 2025

 

Saudi Arabia has been at the centre of regional diplomatic activity through the early months of 2025, positioning itself as an intermediary in the Ukraine conflict and at the forefront of engagement with the new regime in Syria.

The role of regional mediator is one that has in recent years been more closely associated with Qatar – particularly in relation to the Gaza conflict – and, on occasion, Oman.

Riyadh’s decision to throw its weight behind diplomatic initiatives is part of what Abdulaziz Sager, chairman of the Saudi-based Gulf Research Centre, has described as a “bold multi-alignment strategy”, which seeks to balance Riyadh’s economic and security concerns and its regional leadership ambitions.

Multipronged initiatives

The kingdom has gained plaudits for its efforts to resolve the Ukraine war in particular. Following his talks with Crown Prince Mohammed Bin Salman (MBS) in Jeddah on 11 March, Ukraine’s President Volodymyr Zelenskyy said: “Saudi Arabia provides a crucial platform for diplomacy, and we appreciate this.”

Zelenskyy added that he had “a detailed discussion on the steps and conditions needed to end the war” with the crown prince.

The previous month, US secretary of state Marco Rubio had said Saudi Arabia had played an “indispensable role” in setting up bilateral negotiations between Moscow and Washington to discuss the conflict.

Russia’s President Vladamir Putin has also praised the Saudi leadership for providing a platform for high-level meetings with the US and “creating a very friendly atmosphere”.

Whether all this leads to a lasting peace deal for Ukraine remains to be seen, but Saudi Arabia’s attitude to conflict may be coloured somewhat by its own experiences over the past decade in Yemen.

It is now 10 years since it launched a bombing campaign against Yemen’s Houthi rebels in March 2015, and the war has not gone as Riyadh had hoped, with the Houthis proving far more resilient than anticipated.

Saudi Arabia’s southern border has at least been relatively quiet since a truce took hold in 2022, but a comprehensive peace deal has proved elusive.

Riyadh has also been re-engaging in the Levant this year, in light of the new regime in Damascus.

The new Syrian president Ahmed Al-Sharaa travelled to Riyadh in early February, on his first trip abroad since taking power. Saudi Foreign Minister Prince Faisal Bin Farhan had been in Damascus a week earlier.

There are some key issues at stake for Riyadh. The regime of President Bashar Al-Assad had overseen the industrial-scale production of the amphetamine-type stimulant Captagon, much of which was smuggled into Saudi Arabia and other Gulf states. Saudi efforts to disrupt the trade – both at its borders and via lobbying of the Syrian authorities – had failed to stem the flow of drugs.

In addition, Hasan Alhasan, senior fellow for Middle East Policy at the International Institute for Strategic Studies, has pointed out that between 500,000 and 2.5 million de facto Syrian refugees are thought to be living in Saudi Arabia – a fact that gives Riyadh a clear interest in Syria’s stability, particularly if it wants to encourage them to return home.

“Saudi Arabia views the fall of the Assad regime as an opportunity to reassert its influence in the Levant,” he asserted in a recent commentary.

The ousting of Assad in late 2024 and the recent Israeli campaign against Hezbollah has also changed the situation on the ground in Lebanon, encouraging Saudi Arabia to reconsider its approach there too.

MBS hosted Lebanon’s recently elected President Joseph Aoun on 3 March. Following their meeting, Saudi Arabia said it would look again at allowing Lebanese exports to Saudi Arabia and letting its own citizens travel to Lebanon.

Manoeuvring around Trump

The Saudi diplomatic push may also be motivated by a desire to ensure that relations with Washington remain on a positive footing in the wake of Donald Trump’s re-election as US president.

At first, it appeared that the bilateral relations would follow a similar pattern to Trump’s first term.

In January, MBS said in a phone call with Trump that Saudi Arabia was planning to invest some $600bn in the US over the coming four years, which the US president suggested should probably be increased to $1tn. This echoed the signing of $460bn-worth of defence deals when Trump made Saudi Arabia his first foreign trip as president in May 2017.

Riyadh appears to have conceded to Trump’s higher figure, with the US president saying in early March: “I said I'll go if you pay $1tn to American companies, meaning the purchase over a four-year period of $1tn, and they've agreed to do that. So, I'm going to be going there.”

However, other aspects of the bilateral relationship are more difficult and less predictable. Trump had been pushing Saudi Arabia to join Bahrain, the UAE and Morocco in normalising relations with Israel, but in light of the war in Gaza and Trump’s own plans for the ethnic cleansing of Palestinians from the strip, that looks like a stretch too far.

Trump will nevertheless have been pleased by the decision by Saudi Arabia and the other members of the Opec+ bloc in early March to unwind some of the production restrictions they had voluntarily agreed.

From April onwards, the eight-strong group will start to bring 2.2 million barrels a day back onto the market over the course of 18 months. That fits in with Trump’s call in January, soon after taking office, for Riyadh and Opec to do more to help bring oil prices down.

However, that decision may also create fiscal challenges for the Saudi government, as any rise in production could be more than offset by lower prices.

Saudi Aramco has announced plans to trim its dividend payouts this year to $85.4bn – down from $124bn in 2024. These payments are a vital source of revenues both for the central government and for its Public Investment Fund (which holds a 16% stake in Aramco)

All that could force some public sector spending constraint in the kingdom, in a sign that balancing diplomacy and financial interests is not always straightforward.

MEED’s April 2025 report on Saudi Arabia includes:

> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development
> BANKING: Saudi banks work to keep pace with credit expansion

https://image.digitalinsightresearch.in/uploads/NewsArticle/13483143/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Kuwait appoints KPMG for ports strategic plan

    4 November 2026

    Register for MEED’s 14-day trial access 

    Kuwait Ports Authority (KPA) has appointed the local office of UK-headquartered KPMG to develop its ports strategic plan, which aims to improve the competitiveness, connectivity and performance of Kuwait’s commercial ports.

    KPMG will act as lead consultant on the strategic consultancy engagement, with Netherlands-based Haskoning Nederland and local engineering firm Dar Gulf Consult providing engineering consultancy support.

    KPMG will consolidate the three consultants’ work into a single strategic plan. It will lead the market, commercial and organisational analysis, as well as develop and implement the strategy.

    The scope is split into two workstreams. The first covers strategy development, planning and an implementation framework, including an assessment of KPA’s current market position and performance.

    The resulting strategic options and roadmap will be developed into detailed functional plans, supported by key performance indicators, a risk framework and a monitoring plan.

    Under the second workstream, KPMG will set up and lead a strategic technical support office for 36 months. The office will provide KPA with strategic oversight, technical advisory services and integrated project management support.

    KPA operates Kuwait’s three main commercial ports: Shuwaikh Port, Shuaiba Port and Doha Port.

    In line with the New Kuwait Vision 2035 development strategy, KPA is transitioning its operations into high-efficiency smart ports by investing heavily in automated machinery, deeper navigational channels and significant berth capacity expansions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21106611/main.jpg
    Yasir Iqbal
  • Combined Group signs Kuwait upstream contract

    4 November 2026

    Register for MEED’s 14-day trial access 

    Kuwait-headquartered Combined Group Contracting Company has signed a contract to repair and revamp production facilities in West Kuwait, according to a company statement.

    State-owned upstream operator Kuwait Oil Company (KOC) awarded the contract, valued at KD9.7m ($31.4m).

    The contract has a five-year term.

    KOC issued the invitation to bid on 5 October 2025. The initial bid deadline was 4 January 2026, and a pre-tender meeting was scheduled for 4 November 2025.

    The contract award to Combined Group was approved on 13 September 2026.

    Kuwait’s oil and gas sector is currently in the midst of a major crisis, as disruptions to shipping through the Strait of Hormuz have dramatically reduced exported crude oil volumes.

    The disruptions are the result of a regional war that started on 28 February when the US and Israel attacked Iran.

    The disruptions to shipping in the Strait of Hormuz are also creating significant challenges for oil and gas construction projects, which normally import equipment and materials through the waterway.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21120792/main.png
    Wil Crisp
  • Qiddiya seeks interest for water infrastructure packages

    4 November 2026

    Register for MEED’s 14-day trial access 

    Qiddiya Investment Company (QIC) has issued an expression of interest for two water infrastructure packages at Qiddiya City, southwest of Riyadh.

    According to a source, the first package covers a wastewater treatment plant with a capacity of 60,000 cubic metres a day (cm/d).

    The second package involves a wastewater treatment plant with a capacity of 9,000 cm/d. It will also include a “sizeable” reverse osmosis (RO) facility, a source close to the project told MEED.

    The deadline for submissions of interest is 8 November.

    The infrastructure package will cater to Saudi Arabia’s 360-square-kilometre Qiddiya entertainment city.

    QIC, which is owned by Saudi Arabia’s Public Investment Fund (PIF), is overseeing the development of Qiddiya City, including its supporting utilities infrastructure.

    In October 2024, MEED reported exclusively that QIC planned to tender its utilities packages individually under an engineering, procurement and construction model.

    QIC had previously planned to procure the infrastructure through a public-private partnership (PPP). However, it cancelled this approach despite receiving two bids for a multi-utility package in 2020.

    The original utilities package covered power generation, water desalination, sewage treatment and water transmission networks.

    In September 2023, QIC signed infrastructure contracts worth SR2.29bn ($611m) with a joint venture of Saudi Real Estate Infrastructure Company (Binyah) and InfraRoad Contracting.

    The contracts covered a wider infrastructure package at Qiddiya’s Resort Core, including roads, utility networks, water storage facilities and pumping stations, as well as the construction of a sewage treatment plant (STP).

    Two other major PIF-backed developments, the Red Sea project and Amaala, have each awarded multi-utility packages using a PPP model, while contractors are preparing to bid for two separate wastewater treatment plants for Oxagon, Neom’s industrial cluster.

    In September, the utilities system serving Saudi Arabia’s Red Sea tourism destination reached commercial operation, marking the start of a 25-year concession for one of the world’s largest integrated off-grid utilities projects.

    The project, known as the Marafiq Red Sea Project or Red Sea Utilities Multi-Utilities Project, includes three seawater RO plants, an STP, a waste management centre and 32,500 refrigeration tonnes of district cooling capacity.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21111446/main.jpg
    Mark Dowdall
  • Aramco Q3 profit rises 9% despite attacks on facilities

    3 November 2026

    Register for MEED’s 14-day trial access 

    Saudi Aramco reported a 9% year-on-year increase in adjusted net income to $31.2bn in the third quarter of 2026, supported by stronger financial performance across its businesses, particularly downstream operations, and despite persistent attacks by the Yemen-based Houthi rebels on its facilities across the kingdom.

    The company’s revenue and other income from sales reached $140.492bn in Q3 2026, up from $111.509bn in the same period last year. 

    Downstream adjusted earnings before interest and taxes (ebit) increased by 234% year-on-year, reflecting stronger refining margins.

    Cash flow from operating activities increased to $38.7bn in Q3, compared to $36.1bn a year earlier, while free cash flow rose to $28.2bn from $23.6bn over the same period.

    The company maintained a gearing ratio of 5.5% at the end of the first nine months of the year, compared to 6.2% at the end of the first half of the year.

    Return on average capital employed in Q3 remained the same as in the previous quarter at 22.1%.

    Aramco’s capital expenditure in Q3 2026 declined to $10.52bn from $12.55bn in the same period last year, while capex in the first nine months of the year stood at $35.78bn.

    Commenting on the Q3 financial results, Aramco’s president and CEO, Amin H Nasser, said: “Geopolitical uncertainty and attacks on key energy facilities continued to amplify the global energy supply crisis in the third quarter of 2026, with serious implications for global energy security.

    “Despite challenges, the unwavering dedication of our workforce, our operational excellence, the flexibility of our system and the strength of a supply network built over decades enabled us to continue delivering reliably to our customers through this extraordinary period.

    “We continue to explore additional overseas storage capacity and alternative export routes to further strengthen our global supply network, and our robust operational and financial performance during this volatile period demonstrates the value of our resilience.

    “Backed by our strong balance sheet, we remain focused on the disciplined execution of priority projects and on leveraging advanced technologies to enhance performance and unlock new opportunities. This is how we will continue to meet the world’s evolving energy needs and deliver value for our shareholders and customers.”

    ALSO READ: Sabic swings back to profit in Q3 with $224m net income

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21121169/main.jpg
    Indrajit Sen
  • UAE monitors desalination plants after oil spill

    3 November 2026

    State utility Etihad Water & Electricity (EtihadWE) says it is monitoring seawater quality at desalination plant intake points following an oil spill off the UAE's northern coast.

    In a statement, the utility said it is continuing to "implement proactive measures to safeguard the water production system" following the spread of an oil slick towards coastal areas in the emirates of Umm Al-Quwain, Ras Al-Khaimah, Ajman and Sharjah.

    The spill involved the tanker Gem No. 2, which was struck by a projectile in UAE territorial waters on 9 October. The resulting oil pollution has raised concerns over potential contamination of seawater used by desalination plants along the northern coast.

    EtihadWE said its measures include continuous monitoring of seawater quality at plant intake points, regular testing of produced and distributed water, and verification of compliance with approved standards before water enters the distribution network.

    The utility added that the precautionary measures will not affect the continuity of water supplies to consumers in the Northern Emirates.

    In an earlier update on 30 October, the Climate Change & Environment Ministry said the oil slick was concentrated off the coast of Umm Al-Quwain, extending partially towards coastal areas in Ras Al-Khaimah, Ajman and Sharjah.

    The ministry said the concentration of pollution had declined significantly and that the leak had been stopped at source. However, surveying, monitoring and clean-up operations are continuing in affected coastal areas.

    The Energy & Infrastructure Ministry said specialised technical teams are continuing work to address technical issues with the tanker, including repairing damaged sections, restoring operational systems and assessing the integrity of its structure.

    The proximity of the oil slick to the Naqa'a desalination plant in Umm Al-Quwain has drawn particular attention. According to media reports, the slick approached to within approximately 2 kilometres of the facility.

    Naqa'a has a production capacity of 150 million imperial gallons a day, equivalent to approximately 682,000 cubic metres a day. The plant supplies water to the Northern Emirates and has been operational since 2022.

    It is owned by Naqa'a Desalination Plant, a special-purpose vehicle established by Mubadala, Acwa and the former Federal Electricity & Water Authority, now known as EtihadWE.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21104534/main3427.jpg
    Mark Dowdall