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• 
  Israeli offensive leaves Beirut in limbo

  5 June 2026

  

   

  Lebanon is being held in economic and political limbo by Israel’s open-ended offensive in the south, which has killed more than 3,500 people since March and is characterised by strategic objectives that offer no clear end in sight.

  Political leaders in Tel Aviv are justifying the operation on the grounds of eliminating Hezbollah – a far‑fetched goal against a dispersed guerrilla organisation, as with Hamas in Gaza – while ignoring overtures from Lebanon’s leadership for a ceasefire.

  The recently formed Lebanese government, meanwhile, continues to look impotent: unable to secure its territory from Israeli incursions or Hezbollah activity, and unable to deliver on promises of stability, reform, IMF funding and reconstruction.

  Echoes of the past

  The overarching shape of Israel’s military campaign is ominously familiar, echoing the 1978, 1982, 1985 and 2006 Israeli invasions of southern Lebanon – all entailing creeping encroachment without strategic resolution.

  Since fighting resumed on 2 March 2026, Israeli forces have gradually pushed north, crossing north of the Litani for the first time since the 2006 Lebanon war and seizing Beaufort Castle above Nabatieh on 31 May.

  Israeli Prime Minister Benjamin Netanyahu has framed the goal as establishing a “security zone” – the same term and concept Israel used to justify the occupation of a roughly 800-square-kilometre belt of southern Lebanon from 1985 to 2000.

  That occupation was a debacle for Israel’s military and ended in unilateral withdrawal.

  Israeli analysts are already drawing the modern parallels as the cost of holding ground in southern Lebanon rises, driven by Hezbollah’s deployment of cheap fibre‑optic first‑person‑view (FPV) drones that inflict a steady drip of Israeli casualties and losses.

  As with Russia in Ukraine, Tel Aviv is being tactically embarrassed by the advent of these fibre‑optic drones, which are immune to jamming and – of particular concern to Israeli forces – are too small to be reliably detected and intercepted by conventional counter‑drone systems.

  This leap in Hezbollah’s operational threat – based on cheap technology that can be locally assembled – has sharply raised the price of maintaining a military presence in the country.

  In an attempt to exact a retaliatory price, Israel’s air strikes rose by 110% between 19-22 May and 23-26 May as Hezbollah’s drone successes accumulated, according to conflict monitor Acled. But the underlying tactical dilemma remains.

  Israeli politicians, irate at the situation, have demanded escalation and intensified strikes on civilian areas, including in Beirut  – only to face US pushback.

  Tehran as the lever

  Planned strikes on Beirut, including on 3 June, have been held off in recent weeks under pressure from Washington after Tehran made Lebanon a bargaining chip in its wider negotiations with the US, repeatedly suspending talks following Israeli escalation in the Levant country.

  Tehran has also gone further than walkouts, warning it could respond directly if Israel strikes Beirut – adding an explicit threat of retaliation to diplomatic pressure.

  With a Gulf ceasefire and the reopening of the Strait of Hormuz both riding on the outcome, Washington is strongly motivated to keep Israel from striking Beirut.

  In this way, Iran is one of the few powers wielding any leverage over Israel’s actions in Lebanon – even if that leverage is a source of discomfort for Lebanon’s leaders, for whom Tehran’s clout contrasts starkly with their own lack of influence.

  That protection nevertheless remains narrowly tied to the Lebanese capital, with Washington turning a blind eye to Israel’s ongoing destruction of civilian infrastructure in Lebanon’s south.

  Within the border belt that Tel Aviv has dubbed the “yellow line” – amounting to about 7% of Lebanese territory – Israeli forces have accelerated the demolition of villages since the April truce and barred residents from returning.

  More than a million people, overwhelmingly Shia from the south and the Bekaa, have been displaced since March, and UN human-rights experts have pointed to the blanket evacuation orders and levelling of housing as mirroring Israel’s conduct in Gaza.

  The Lebanese state remains trapped in inaction, partially of its own making. Beirut was initially close to indifferent to renewed strikes on Hezbollah, whose unilateral re-entry into the war it had condemned for endangering the state.

  But as the strikes have shifted methodically towards civilian areas, Beirut’s restraint satisfies no one: the domestic audience wants protection, while Israel and the US want decisive Lebanese army action against Hezbollah.

  Yet the Lebanese army – still adhering in spirit to the November 2024 ceasefire framework and loath to move seriously against Hezbollah for fear of stoking civil war – has remained aloof from the conflict.

  Parliament speaker Nabih Berri, who is close to Hezbollah and maintains dialogue with the group, says it would honour a genuine ceasefire if only Washington could deliver one.

  But repeated attempts to shore up the ceasefire have remained conditional on the Lebanese army stepping up to rein in Hezbollah, while failing to guarantee an end to Israel’s destruction of civilian structures in areas it is occupying.

  On 3 June, a fourth round of US‑mediated trilateral talks produced a fresh ceasefire announcement, hailed in Washington as a step towards comprehensive peace.

  Yet its conditions – a complete halt to Hezbollah fire, the group’s withdrawal south of the Litani and Lebanese army control of undefined “pilot zones”– merely reiterate past failed protocols. The declaration was unsigned by Hezbollah and unenforceable by Beirut.

  Within hours, Hezbollah leader Naim Qassem rejected the declaration, stating that any ceasefire must cover the south and begin with Israeli withdrawal, not Hezbollah’s.

  Both Israeli strikes and Hezbollah attacks have continued since the ostensible deal.

  Recovery on hold

  The economic cost to Lebanon, meanwhile, compounds by the day. The country entered 2026 already in crisis: cumulative GDP down close to 40% since 2019, the pound down 98%, public debt at 150% of GDP, and reserves as low as $11bn as of June 2025.

  The government of President Joseph Aoun and Prime Minister Nawaf Salam staked its credibility on a long‑deadlocked IMF programme finally unlocking external support. The war has upended this, driving away investment and delaying reform.

  The World Bank’s November 2024 assessment – covering only the previous round of fighting, before the March resumption – placed the economic cost at $14bn and recovery needs at $11bn, figures that the current war is now inflating by the day.

  Lebanon’s Bank Audi has warned of zero growth this year if the war continues, versus a pre‑escalation projection of reconstruction‑led recovery. Tourism, historically a fifth of the economy and the engine of the 2024 rebound, has been the biggest casualty.

  Looking ahead, no reconstruction can be financed while the destruction continues, and no IMF programme can advance while the state cannot ensure stability.

  Iran’s leverage may be keeping the bombs off Beirut, but the south’s entrenchment as a war zone is only deepening – with hopes for recovery receding further with every village levelled.

  While the costly occupation is imposing a rising political price on the Israeli government that may, in time, bring it to an end, this will be little consolation for those displaced – many of whom now have no communities to return to, and homes built over decades that are gone.

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  John Bambridge
• 
  Iraq’s economy stalls amid oil exports impact

  5 June 2026

  Download the PDF

  

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  MEED’s June 2026 report on Iraq includes:

  > COMMENT: Iraq’s reform window narrows
  > GOVERNMENT: Al-Zaidi takes Iraq’s premiership under US shadow
  > BANKING: Financial challenge tests Iraq’s resolve
  > ECONOMY: Iraq enters era of resilience, reform and rising risks 
  > OIL & GAS: Iraqi oil and gas sector in crisis
  > POWER & WATER: Focus shifts to delivery of Iraq utilities expansion
  > CONSTRUCTION: Momentum builds in Iraq’s post-war construction sector

  To see previous issues of MEED Business Review, please click here

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  MEED Editorial
• 
  Oman opens bids for 1GW battery storage advisory role

  4 June 2026

  Oman’s Authority for Public Services Regulation (APSR) has opened technical bids for a consultancy contract supporting a planned 1,000MW/four-hour battery energy storage system (bess) project.

  The tender seeks independent regulatory, technical and commercial validation services for the scheme. The project is planned with a rated capacity of 1,000MW and a storage duration of four hours, equivalent to 4,000 megawatt-hours (MWh) of energy storage.

  According to a tender board notice, technical bids were opened on 25 May.

  Thirteen companies submitted proposals including:

  • Afry Management Consulting (Sweden)
  • CESI Middle East (Italy)
  • DNV Dubai Branch (Norway)
  • Engineering Systems Group (Kuwait)
  • ILF Consulting Engineers (Austria)
  • Innovision Engineering Consultancy (UAE) 
  • Mott MacDonald (UK)
  • Sargent & Lundy Abu Dhabi (US)
  • Surbana Consultants Dubai Branch (Singapore)
  • Tractebel Engineering Consultancy (Belgium)
  • TUV Rheinland (Germany)
  • Universal Consulting Engineering (Egypt)
  • WSP International (Canada)

  As previously reported, APSR issued the request for proposals in April as part of wider plans to increase the share of renewable energy in the sultanate.

  The sultanate’s first utility-scale solar photovoltaic (PV) plant integrated with battery energy storage (Ibri 3) entered construction at the beginning of the year, comprising a 500MW solar PV plant and a 100MWh bess system.

  Last month, state offtaker Nama Power & Water Procurement Company signed a power-purchase agreement with local firm O-Green for Oman’s first round-the-clock renewable energy project.

  The company is also seeking consultants to provide separate environmental, social and governance and legal advisory services.

  Renewable energy is expected to increase from 4% of the generation mix in 2024 to 30% by 2030, driving the push for more utility-scale storage projects.

  Over roughly the same period, demand is forecast to double, reaching 10 terawatt-hours by 2031.

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  READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

  GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

  Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:

  > AGENDA: Gulf races to reroute trade > EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity > CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends > MARKET FOCUS: Iraq’s reform window narrows  > MEED TOP 100: Middle East stocks recover unevenly > OIL & GAS: Insurers will only cover a fraction of war damage to oil and gas facilities > LEADERSHIP: Building the infrastructure that makes net zero possible > LEGAL:  Saudi Arabia’s foreign property ownership milestone > TRADE DEAL: UK-GCC trade deal talks conclude

  To see previous issues of MEED Business Review, please click here

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  Mark Dowdall
• 
  Building around the strait

  4 June 2026

  Commentary
  Colin Foreman
  Editor

  The closure of the Strait of Hormuz has turned a lingering, and previously unlikely, threat into reality in 2026. The shutdown of the maritime chokepoint, which is about 33 kilometres wide at its narrowest point, has plunged the global economy into crisis, with fuel prices spiking and fears of energy shortages growing. While diplomatic efforts are under way to resolve the disruption, the GCC’s geographic Achilles heel remains.

  The closure has also highlighted the importance of alternative logistics and energy corridors. Saudi Arabia’s East-West pipeline has enabled the export of 7 million barrels a day of oil from the Gulf coast across the kingdom to the Red Sea, while the UAE has rapidly scaled up operations at Fujairah and directed Adnoc to accelerate development of its 520km West-East pipeline.

  Others have had fewer options. Geographically constrained states such as Kuwait recorded zero crude exports in April, reflecting their near-total dependence on shipping oil through the Strait of Hormuz.

  For the projects market, the crisis is already having, and will continue to have, a significant impact. Ongoing projects are struggling with disrupted supply chains and resulting cost escalation, while future spending is likely to be diverted towards schemes that improve the GCC’s access to markets outside the Gulf.

  For the projects market, the crisis is already having, and will continue to have, a significant impact

  For oil and gas exports, proposed pipeline routes would run south from Kuwait through Saudi Arabia and the UAE and into Oman, enabling shipments from expanded ports on the Arabian Sea. For goods entering the region, the GCC railway scheme has taken a step forward, with procurement starting in May.

  These projects will cost tens of billions of dollars and will take years to complete, which means the events of 2026 will shape the region’s infrastructure priorities for the coming decade.

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  READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

  GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

  Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:

  > AGENDA: Gulf races to reroute trade > EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity > CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends > MARKET FOCUS: Iraq’s reform window narrows  > MEED TOP 100: Middle East stocks recover unevenly > OIL & GAS: Insurers will only cover a fraction of war damage to oil and gas facilities > LEADERSHIP: Building the infrastructure that makes net zero possible > LEGAL:  Saudi Arabia’s foreign property ownership milestone > TRADE DEAL: UK-GCC trade deal talks conclude

  To see previous issues of MEED Business Review, please click here

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  Colin Foreman
• 
  Fitch cuts global airport outlook on Iran war

  4 June 2026

  Fitch Ratings has revised its global airport sector outlook to ‘deteriorating’ from ‘neutral’, warning that disruption linked to the Iran conflict is creating a more challenging operating environment for airports and airlines and clouding traffic visibility into 2026.

  In a note issued on 3 June, Fitch said the conflict has increased uncertainty over “regional airspace availability, airline operations and travel demand”, with implications for route stability and the quality of traffic flows. While most airport operators’ traffic and earnings have remained broadly stable so far this year, the ratings agency expects a softer macro backdrop, a less favourable passenger mix and weaker non-aeronautical revenues to increase sector risks over the next 12 to 18 months.

  The revised outlook is particularly relevant for the Gulf, where major airports have built business models centred on international connectivity, long-haul flying and transfer traffic. Fitch said the disruption is particularly affecting airports with exposure to transfer passengers and internationally connected airline networks — categories that include the region’s largest hubs.

  Hub exposure

  Although the agency did not name Gulf airports specifically, its analysis implies that hubs reliant on long-haul corridors and complex network connectivity are more exposed to “rerouting risk, changing airline capacity decisions and weaker visibility on international demand”. For Gulf operators, that risk is compounded by the potential for further airspace restrictions and ongoing uncertainty around the availability of key flight paths linking Asia, Europe and parts of Africa.

  At the same time, the agency noted that some “Asia-Pacific airports have benefited from the redistribution of transit and long-haul traffic” away from disrupted Gulf hubs. Any sustained diversion of connecting passengers would be material for Gulf airports because duty-free, retail and food and beverage spending is typically stronger among international transfer travellers than point-to-point passengers.

  Fitch’s change of outlook also reflects a broader slowdown in the sector’s growth trajectory. Global passenger growth was strong in 2025 and early 2026, but the pace has started to cool from the post-pandemic recovery period. Fitch pointed to the International Air Transport Association’s latest projection of “4.9% passenger traffic growth in 2026”, a deceleration versus 2025, with early-2026 monthly data showing the slowdown already under way.

  Fitch also warned that non-aviation revenues could come under pressure, particularly where passenger mix shifts away from high-spending travellers. The agency expects a “low single-digit decline in nominal retail revenue for European airport operators” this year, highlighting how quickly discretionary spend can soften when operating conditions turn more volatile.

  Fuel availability and pricing is another risk. Fitch said there is rising uncertainty about jet fuel availability, especially in Europe due to disruption to Middle East supply, potentially increasing airline costs and encouraging capacity reductions. The agency expects fuel reserves to cover the summer months in Europe, even if the Strait of Hormuz remains effectively closed, but warned that winter operations could be more challenging if disruption persists.

  Higher airfares and fuel surcharges could also weigh on near-term demand, Fitch added — a headwind for Gulf airports that have benefited in recent years from strong leisure demand and the restoration of long-haul travel.

  Fitch expects airport performance to become more uneven, with point-to-point leisure airports typically better positioned than large hubs reliant on transfer traffic and international corridors. The ratings agency cited European examples, contrasting airports such as Barcelona or Venice with Heathrow and the Paris airports.

  The same dynamic could play out in the Middle East: airports with a large share of local origin-and-destination demand may be relatively insulated compared with major connecting hubs whose business models depend on stable long-haul routings and predictable network planning by global airlines.

  The risks for the Gulf’s aviation sector were highlighted again on 3 June when Iranian drones struck Terminal 1 at Kuwait International airport, causing significant structural damage. The incident was the third major drone strike on the hub in recent months. On 1 April, a drone strike hit fuel tanks managed by Kuwait Aviation Fuelling Company, sparking massive fires. On March 28, another multi-drone raid severely damaged the airport’s primary radar systems.

  Other airports in the region have been damaged since the conflict began, including Dubai International airport, Zayed International airport in Abu Dhabi and Hamad International airport in Doha.

  ---

  READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

  GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

  Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:

  > AGENDA: Gulf races to reroute trade > EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity > CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends > MARKET FOCUS: Iraq’s reform window narrows  > MEED TOP 100: Middle East stocks recover unevenly > OIL & GAS: Insurers will only cover a fraction of war damage to oil and gas facilities > LEADERSHIP: Building the infrastructure that makes net zero possible > LEGAL:  Saudi Arabia’s foreign property ownership milestone > TRADE DEAL: UK-GCC trade deal talks conclude

  To see previous issues of MEED Business Review, please click here

  https://image.digitalinsightresearch.in/uploads/NewsArticle/17105933/main.jpg

  Colin Foreman