Related Articles

• 
  GCC shelters from the trade wars

  18 April 2025

  

   

  The ‘Liberation Day’ tariffs that US President Donald Trump announced on 2 April have plunged global markets into turmoil, with many previously bullish investors turning bearish as a large swathe of reciprocal tariffs were announced.

  A week later, Trump announced a 90-day pause on the new tariff regime for most trading partners except China, which received an increased tariff rate of 145%, which was then increased to 245%.

  As global stock markets suffered some of their worst days on record, for the GCC, the main mechanism of transmission of economic pain came through the negative oil price shock. Brent crude prices dropped by about 16% and dipped below $60 a barrel for the first time since 2021.

  Falling prices

  For TS Lombard’s general base case, the negative impact of weaker oil demand is offset by more constructive aspects, which highlight the region’s resilience as it is relatively sheltered from the direct effects of Trump’s tariffs compared to most other emerging markets.

  To focus on the negatives first, oil prices have taken a significant hit, dropping to lows unseen since before the Russia-Ukraine war. 

  

  It has been generally accepted that during the period from 2022 to February 2025, there was a $70 a barrel price floor for oil, supported by reduced Opec+ production in 2023 and 2024, coupled with geopolitical risk premium resulting from conflicts in Europe and the Middle East.

  The geopolitical narrative began to untangle in 2024, and then completely unravel in 2025, as markets no longer price in any real oil shock risk. 

  This story has been exacerbated in 2025 with a twofold blow in early April: Trump announced his Liberation Day tariffs, and Opec+ announced plans to raise production even further, from an increase of 114,000 barrels a day (b/d) to 411,000 b/d by May, which shocked the oil market.

  It is key to note that non-oil expansion depends on crude prices to finance growth, rather than for oil’s contribution to GDP. In Saudi Arabia, for example, non-oil GDP grows at about 2% when oil is below the $60 a barrel range, versus 4.7% on average above $80 a barrel.

  Low oil prices become a concern when discussing GCC government budget balances. Economic diversification and oil decoupling plans have required high levels of capital expenditure, as the region begins to brace for a future of less oil dependency – though the deadline for this remains at least 10 years away.

  Although GCC markets have decoupled from oil, overall funding and spending in the GCC remains driven by oil revenues. This can be seen with the breakeven oil prices for GCC countries.

  There is a wide range of fiscal breakeven points within the GCC, with states such as Bahrain and Saudi Arabia suffering the most from drops in oil revenues. Despite these variations, the outlook for oil can be summarised in four points:

  • Opec+ policy creates excess supply, coupled with weak global – and namely Chinese – demand on crude; 
  • Pricing out of geopolitical risk;
  • Tariff policy creates global uncertainty, especially in energy-intensive industries; 
  • An Opec decision on production numbers will hinge on the outcome of Trump’s visit to Saudi Arabia, Qatar and the UAE.

  TS Lombard does not expect oil prices to fall much further. It would not be in Trump’s favour to depress oil prices too far, as it would result in too much pain for US shale producers. 

  Trump wants lower energy inputs; a positive supply-side factor; and to showcase a win from his campaign pledges, many of which have yet to materialise. Nonetheless, the base case for oil remains bearish this year relative to the past two years, although TS Lombard is not overly negative on expectations about current price equilibrium in the $60-$70 a barrel range.

  Potential upside

  With markets remaining in a tumultuous state, and while questions are being asked about trade deals and the re-implementation of tariffs, it is key to note that oil, energy and various petrochemicals products have been exempt from US tariffs. 

  This means that, for a volatile and demand-dependent market, oil may see some upside towards the end of this year, as markets begin to price in tariff risk and supply-side disruption.

  In terms of non-oil exports from the GCC to the US, with the exception of aluminium, little has changed from pre-Liberation Day operations. 

  In 2024, the US enjoyed a trade surplus with the GCC in general. For example, 91% of Saudi exports to the US in January 2025 were crude or crude-based products such as ethylene, propylene polymers, fertilisers, some plastics products, and rubber – most of which are exempt from tariffs. 

  For the UAE, 80% of exports to the US were similarly exempt, including supplying the US with 8% of its total aluminium demand. Significantly, Canada and China are the main aluminium exporters to the US.

  With China and Canada also being major targets for Trump, countries such as the UAE and Bahrain will maintain a competitive advantage in selling to the US market, despite facing either the 10% baseline tariff, or the specific 25% aluminium tariff. The best case scenario is that both these GCC states are able to negotiate a trade deal that could exempt or curb the negative tariff effect on their aluminium exports.

  Limiting impact

  Although several industries have already suffered – as petrochemicals in general has suffered because of the drop in demand and oversupply in the market – the GCC finds itself in a unique position. Its economies are geared to being market- and trade-friendly, and they have low regulatory barriers, large amounts of space and energy to engage in manufacturing-intensive activities.

  Coupled with strong relations with the Trump administration, the GCC has both an economic and geopolitical opportunity to act as a global intermediary. It has already been announced that Trump’s first foreign visits will be to the region, and today major global negotiations – from ceasefires to investment mandates – take place in the GCC.

  A common argument being made regarding the latest output decision by Opec+ is that it is a geopolitical ploy to appease Trump’s pursuit of lower energy prices and gain favourable negotiating positions for the GCC states. Items on this docket range from civilian nuclear and drone programmes through to the approach to Iran and the Gaza-Israel question.

  Saudi Arabia’s non-oil GDP remains high, showing the resilience of the kingdom when facing economic headwinds. Specifically, the kingdom has kept up its streak of strong non-oil purchasing managers’ index performances. 

  With the GCC exhibiting stable conditions as the world moves towards uncertainty and erecting trade barriers, the region’s overall competitiveness could be enhanced. This is especially true in the case of the real economy, where investments still have a mostly local rather than international reliance. 

  Overall, the short-term story relates to oil – and namely to the capital flows that oil brings, which fund economic diversification expenditures in the GCC. 

  Although lower oil prices are a key detractor for the region, the story is far from being all bad news. 

  Improved geopolitical relations and opportunities arising from the positioning of the GCC states allows them to exploit emerging gaps in markets that were previously dominated by economies that have been targeted with tariffs.

   

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• 
  South Korea eyes UAE high-speed rail project

  18 April 2025

  A senior delegation including South Korea’s Land Minister Park Sang-woo arrived in the UAE on 16 April to discuss collaboration on the UAE high-speed rail (HSR) project.

  According to media reports, the delegation was scheduled to meet with the UAE’s Minister of Energy and Infrastructure Suhail Mohamed Al-Mazrouei on Friday to discuss bilateral cooperation in the transport and infrastructure sectors, with a focus on the high-speed railway project connecting Abu Dhabi and Dubai.

  The delegation visit will conclude on 19 April.

  “The ministry has formed a public-private sector team which includes the state-run Korea National Railway, Korea Railroad Corporation, Hyundai Rotem and Posco for the UAE railway project bid,” the media reports added.

  The team has been invited to bid for the project after passing the prequalification stage.

  In January, MEED exclusively reported that the UAE’s Etihad Rail had tendered a contract to design and build the civil works and station packages for the railway line connecting Abu Dhabi and Dubai.

  The proposed HSR programme will be constructed in four phases, gradually adding further connectivity to other areas within the UAE.

  The first phase involves the construction of a railway line connecting Abu Dhabi and Dubai, which is expected to be operational by 2030.

  The second phase will involve the development of an inner-city railway network with 10 stations within Abu Dhabi city.

  The third phase of the railway network involves the construction of a connection between Abu Dhabi and Al-Ain.

  The fourth phase involves the development of an inter-emirate connection between Dubai and Sharjah.

  The 150-kilometre (km) first phase of the HSR will stretch from the Al-Zahiyah area of Abu Dhabi to Al-Jaddaf in Dubai.

  The project’s civil works have been split into two packages – Abu Dhabi and Dubai – comprising four sections. The scope of these sections includes:

  • Phase 1A: Al-Zahiyah to Yas Island (23.5km) 
  • Phase 1B: Yas Island to the border of Abu Dhabi/Dubai (64.2km)
  • Phase 1C: Abu Dhabi/Dubai border to Al-Jaddaf (52.1km)
  • Phase 1D: Abu Dhabi airport delta junction and connection with Abu Dhabi airport station (9.2km)

  The rail line will have five stations: Al-Zahiyah (ADT), Saadiyat Island (ADS), Yas Island (YAS), Abu Dhabi airport (AUH) and Al-Jaddaf (DJD).

  The ADT, AUH and DJD stations will be underground, while ADS will be elevated and YAS will be at grade.

  The overall construction package also includes provisions for the rolling stock, railway systems and two maintenance depots.

  The high-speed project will slash journey times between the UAE’s two largest cities and economic centres. The journey time between the YAS and DJD stations will be 30 minutes.

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  Yasir Iqbal
• 
  WEBINAR: Mena Power Projects Market 2025

  18 April 2025

  Register now

  Date & Time: 29 April 2025 (Tuesday) at 11:00 AM GST

  Agenda:

  1. Summary of historical power project sector performance: generation and T&D

  2. Breakdown of performance by sub-sector, fuel type (conventional, nuclear, renewables) and country

  3. Summary of 2024 market performance plus outlook for 2025 and beyond 

  4. The main drivers 

  5. Key awarded projects: generation and T&D 

  6. The top clients and contractors 

  7. Key future projects: Generation and T&D 

  8. Battery energy storage system plants future outlook

  9. Market risk assessment (EPC capacity, costs, tariffs, supply chain, OEM, etc.)

  10. Q&A session

  Hosted by: Jennifer Aguinaldo, MEED's energy and technology editor

  Jennifer Aguinaldo leads MEED’s power, water and technology sectors coverage. She focuses on policies, projects and capital investments in clean and renewable energy, power generation, water desalination, treatment & reuse, AI, smart cities, digitalisation, energy transition and hydrogen.  

  She brings with her over 10 years of experience as an information technology journalist and industry analyst in Asia and the Middle East, and five years as senior analyst and associate consultant at MEED Insight covering IT, telecoms, energy, education and transport, among others.

  Click here to register

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13720224/main.gif

  Jennifer Aguinaldo
• 
  WEBINAR: An audience with Roshn Group

  18 April 2025

  Register now

  Date & time: 23 April 2025 (Wednesday) at 2:00 PM GST

  Agenda: 

  Together with Ed James, head of content and research at MEED, hear directly from Iain McBride, executive director – commercial, Roger Fatovic, executive director – programme management, and Waleed Bawaked, senior director – strategy and planning, from the Roshn Group on their procurement and development vision.

  Learn how your company can participate in its current and future procurement opportunities.

  Specifically, the webinar agenda will cover: 

  1. A detailed overview of Roshn Group’s gigaprojects, its masterplan, progress and the several billion dollars worth of construction work awarded to date 

  2. Key details on the Group’s projects pipeline including specific procurement opportunities, future materials and equipment demand, and how companies can register and help deliver the iconic giga development 

  3. An in-depth discussion with Roshn Group on its requirements, vendor registration and procurement processes, and contracting frameworks 

  4. Live Q&A session 

  Hear directly from the leadership team at Roshn Group on: 

  1. Overview of Roshn Group, the leading multi-asset class real estate developer 

  2. The Masterplans: Discover how Roshn Group is developing multiple master planned projects across the kingdom 

  3. The Opportunities: Learn about specific project opportunities  

  4. Traditional and Innovative Building Methods for a Sustainable Future: Explore how Roshn Group is using sustainable materials and technologies to minimise environmental impact 

  5. Roshn Group as a Preferred Partner: Gain insights into Roshn Group's procurement strategy, designed to foster strong partnerships in the industry. 

  6. Looking Ahead: Opportunity for the sector: Learn about the vast opportunities for collaboration and investment in Roshn Group’s vast development projects, with billions in works to be procured.

  Click here to register for the webinar

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  MEED Editorial
• 
  Site works begin on W Hotel in Ras Al-Khaimah

  18 April 2025

  

   

  Site works have begun on the W Hotel and residences project on Ras Al-Khaimah’s Al-Marjan Island. 

  The excavation works have started and are being undertaken by the local firm Shine Square Building Contracting.

  The hotel will have 300 rooms and is expected to open in the first quarter of 2027.

  Local firm Al-Gafry Engineering Consultant is the project’s lead consultant.

  Thailand-based Blink Design Group is the project’s architect and interior design consultant.

  In 2023, MEED reported that US-based hotel operator Marriott International had signed an agreement with Indian real estate developer Dalands Holding and master developer Marjan to develop a W Hotel on Ras Al-Khaimah’s Al-Marjan Island.

  The companies declined to comment on the construction timelines and the budget.

  W Hotel Al-Marjan Island will be Marriott International’s fourth property in the UAE, following W Dubai The Palm, W Dubai Mina Seyahi and W Abu Dhabi Yas Island.

  Over the years, Al-Marjan Island has attracted some high-profile hospitality projects. The most notable include the Bab Al-Bahr Resort, Hampton by Hilton Resort, Double Tree, Radisson Hotel and Movenpick Resort. 

  Ras Al-Khaimah real estate market 

  The real estate market in the UAE’s northern emirate of Ras Al-Khaimah has undergone a transformation in recent years, with transactions reaching AED6.4bn ($1.74bn) in 2024 – an 805% increase on the AED711m recorded in 2020. 

  Several key drivers have fuelled this growth, most notable of which is the establishment of an estimated $2.5bn Wynn Resorts integrated development on Al-Marjan Island. 

  Since the Wynn Resorts announcement, real estate demand in the emirate – especially on Al-Marjan Island and in the areas around it – has skyrocketed. Major local and international residential and hotel developers, including local firm Rak Properties, Abu Dhabi’s Aldar, Dubai’s Emaar Properties and US-based Wow Resorts, have since launched high-end projects that have increased the appeal of real estate in the emirate.

  Looking ahead, the Ras Al-Khaimah real estate market should remain robust, with schemes worth over $9bn in the pipeline.

  Further growth is expected as a result of infrastructure enhancements, including improved road networks and international flight connectivity, which have supported the growing real estate market by making the emirate a more convenient place to live and work.

  ---

  MEED’s May 2025 report on the UAE includes:

  > GOVERNMENT & ECONOMY: UAE looks to economic longevity
  > BANKING: UAE banks dig in for new era
  > UPSTREAM: Adnoc in cruise control with oil and gas targets
  > DOWNSTREAM: Abu Dhabi chemicals sector sees relentless growth
  > POWER: AI accelerates UAE power generation projects sector
  > CONSTRUCTION: Dubai construction continues to lead region
  > TRANSPORT: UAE accelerates its $60bn transport push

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13719781/main.jpg

  Yasir Iqbal