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• 
  Iraq’s reform window narrows

  2 June 2026

  Commentary
  John Bambridge
  Analysis editor

  Iraq enters mid-2026 with the most expansive projects pipeline in its post-2003 history, with more than $420bn in planned and active work, but an increasingly narrow fiscal margin within which to deliver it.

  The cumulative pipeline builds on a 2025 performance that witnessed a record $17bn in contract awards in the power and water sector and looks forward to a construction industry forecast to expand at 4.8% annually through 2028. In the energy sector, the Gas Growth Integrated Project is advancing towards its 2028 commissioning, while the country’s North-South logistics expansion remains in active procurement.

  The pipeline is very real, but the conditions that were expected to fund it no longer exist in the wake of the Iran war.

  April oil exports ran 90% below the previous year’s monthly average as Strait of Hormuz transit remained effectively suspended. The IMF projects Iraq’s real GDP to contract by 6.8% in 2026 – the sharpest regional revision after Qatar. Even before the conflict, Iraq’s reserves were falling by about $10bn every year. The three-year budget framework expired in 2025 with no 2026 successor in place, leaving forward-looking spending uncertain. Ali Al-Zaidi was sworn in as prime minister on 14 May with fragile coalition support and nine cabinet portfolios still unfilled.

  The structural collision is between an infrastructure ambition built for 4 million barrels a day of exports and a fiscal reality running at a fraction of that. Iraq’s oil revenue funds over 90% of the federal budget. An exports collapse of the scale now visible will strip more from the budget in months than any reform programme can replace in years. And some of the production lost may not return. Many of Iraq’s southern fields have been running at reduced rates rather than fully shut in – the better strategy for preserving well integrity – but the longer the downtime, the higher the share of capacity that may not recover in the coming months. The revenue base on which Iraq’s pipeline was assembled is not just suspended; some of it is structurally imperilled.

  The current situation will force reform. Every Iraqi government since 2014 has faced reform pressures, but 2026 has not just tested the underlying assumptions; it has shattered them. Past reform programmes attempted to optimise governance amid volatile oil revenues; the current one must contend with existential risk to the revenue base.

  Al-Zaidi’s first task will not be the budget or the Hormuz crisis in isolation; it will be to convert a fragile mandate into the policy leadership and governance necessary to sustain the projects pipeline. The window for this is open, but it will not stay open long.

  

   

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  MEED’s June 2026 report on Iraq includes:

  > 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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  John Bambridge
• 
  Saudi firm to build Al-Henakiyah solar IPP grid link

  1 June 2026

  

   

  Saudi Services for Electro Mechanic Works has won the main contract to build a 380kV overhead transmission line in Saudi Arabia’s Medina region, according to market sources.

  The project includes the construction of a 354-kilometre-long overhead transmission line that will connect the Al-Henakiyah 3 solar independent power producer (IPP) to several main substations and export power from the plant into the national transmission network.

  The scheme is being developed by Saudi Energy, formerly Saudi Electricity Company.

  The scope covers the supply and erection of transmission towers and foundations, as well as associated grid interface and termination works.

  The Al-Henakiyah 3 solar IPP is part of Saudi Arabia’s wider pipeline of utility-scale solar projects being developed under the Public Investment Fund’s (PIF’s) renewables programme, which runs parallel to the National Renewable Energy Programme (NREP), now in its seventh round.

  In 2025, the PIF outlined plans to advance second- and third-phase extensions to five existing solar plants, including Al-Henakiyah, totalling 9GW of additional capacity.

  According to official documents, the negotiation process for the directly-awarded concessions was due to start last year.

  Saudi Services for Electro Mechanic Works, meanwhile, is continuing to advance several transmission line projects for Saudi Energy.

  In June 2025, it was appointed as the main contractor to build a separate 380kV overhead transmission line linking the 2GW Afif 1 solar IPP to the national grid.

  Works on this project are not expected to be completed until at least 2027.

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  > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

  

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  Mark Dowdall
• 
  Petrofac completes sale of Abu Dhabi business unit

  1 June 2026

  UK-headquartered Petrofac has completed the sale of Petrofac Emirates, a business unit it established in Abu Dhabi in 2008.

  The unit has been bought by a consortium of financial investors led by the New York-headquartered hedge fund Mason Capital Management and UK-based asset management firm Pearlstone Alternative.

  In a statement, Petrofac said the sale was completed after the satisfaction of all required conditions and approvals.

  The business unit was originally founded with a strategy to provide engineering, design, procurement and construction services for oil, gas, refining, petrochemical and renewable energy projects.

  Petrofac Emirates has engineering and construction (E&C) capability and includes E&C teams based in the UAE and India.

  In its latest statement, Petrofac said: “Petrofac Emirates encompasses Petrofac’s core E&C capability in the UAE.

  “The transaction positions Petrofac Emirates as a strong, self-sustaining company with no funded debt on its balance sheet and substantial growth opportunities.”

  Leadership role

  Under current plans, Tareq Kawash, who has been the group chief executive of Petrofac since April 2023, will become the chief executive of Petrofac Emirates to lead the E&C business through its next phase under new ownership.

  Kawash has over 30 years of international leadership experience at engineering procurement and construction (EPC) companies.

  Prior to working at Petrofac, he was a senior vice-president at McDermott International.

  Following the completion of the sale, Afonso Reis e Sousa will step down as group chief financial officer of Petrofac.

  Commenting on the sale of Petrofac Emirates, Kawash said: “The completion of this transaction marks an important milestone for Petrofac Emirates and the beginning of an important new chapter for the business.

  “Under our new ownership structure, with a focused platform for growth, we are well-positioned to build on our track record, strengthen our long-standing customer relationships and pursue new opportunities across the wider Mena region.

  “The transaction is not the destination; it is the platform from which we move forward with confidence, discipline and ambition.”

  Sam Read, a partner at Mason, said: “Our mission is to empower Petrofac Emirates to achieve its strategic goals, capitalise on new market opportunities, and leverage significant growth potential in the dynamic energy EPC sector.

  “Petrofac Emirates has market-leading capabilities and an unmatched track record of delivering for its customers, and we look forward to partnering with the company to help drive continued success.”

  The sale of Petrofac Emirates follows the completion of the sale of Petrofac Asset Solutions in April.

  In December, it was announced that US-based CB&I had entered into a sale agreement to buy the unit.

  Petrofac’s asset solutions unit provides operations, maintenance and decommissioning services for onshore and offshore energy assets.

  In a statement, CB&I said that the acquisition would strengthen its portfolio with “a complementary reimbursable contracting model business, delivering predictable cash flow and enhancing service capabilities”.

  Restructuring disruption

  Amid Petrofac’s dramatic restructuring, there has been disruption to progress at some of the company’s projects.

  In March, MEED reported that Petrofac, along with its partner China Huanqiu Contracting & Engineering Corporation (HQCEC), had stopped work on a petrochemicals project in Algeria, valued at approximately $1.5bn.

  The news about the Algeria project came just over two weeks after MEED reported that Petrofac had also stopped work on an oil project in Libya and cut staff in the North African country.

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  Wil Crisp
• 
  Chinese-Saudi joint venture to build 18GWh battery storage plant

  1 June 2026

  China-headquartered ZOE Energy Storage has announced it has signed a joint-venture agreement with a Saudi partner to develop a battery energy storage system (bess) manufacturing facility in the kingdom.

  The facility will be developed in two phases. The first phase will have an annual production capacity of 6GWh and is scheduled to begin operations in the first quarter of 2027.

  A second phase will increase the total production capacity to 18GWh.

  In a statement, ZOE said the manufacturing facility will cover 150 acres and will be built to European manufacturing standards.

  The location and the partner involved have not been publicly disclosed.

  The Saudi facility will be the Chinese company’s second overseas manufacturing base, following a 6GWh energy storage system manufacturing facility in Hungary. This was developed with Energy Pro Hungary and began operations in October 2025.

  Under Saudi Arabia’s Vision 2030 objectives, the kingdom plans to deploy 130GW of renewable energy capacity and 48GWh of energy storage and achieve 50% clean power generation.

  In May, Saudi Arabia’s principal buyer, Saudi Power Procurement Company, received statements of qualification from firms seeking to build, own and operate a second group of bess projects with a combined power capacity of 3GW.

  The programme comprises six independent storage provider projects with a total capacity of 3GW, equivalent to 12,000 megawatt-hours based on a four-hour storage duration.

  The main contract tender is expected to be issued in the coming months once firms are formally prequalified.

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  > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

  

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  Mark Dowdall
• 
  Middle East stocks recover unevenly

  1 June 2026

  

   

  The combined market capitalisation of the MEED Top 100 largest listed companies in the Middle East and North Africa rose to $3.73tn in mid-May 2026, against $3.48tn a year earlier – a 7.2% gain that recovers most of the value lost in the prior two years’ editions. The aggregate is not the story.

  Saudi Aramco recovered by $181bn, rising from $1.64tn to $1.82tn and providing substantial support to the aggregate Top 100 valuation. The broader movements in the list differentiated along sectoral lines, with key trends including the continued growth of regional banks, the upward repricing for fertiliser and logistics names amid the Hormuz crisis, and the correction of Saudi mid-tier stocks as valuation peaks have failed to hold.

  Oil and gas reweights

  Aramco’s share price recovered from about SR25 to SR30, lifting the company’s market cap by 11% and raising the oil and gas sector’s share of the list back to 54.5%. 

  The company reported first-quarter 2026 net profit of $32.5bn, up 25%, on revenue of $115.5bn – giving it a price-to-earnings ratio of about 18, in line with the Saudi market average as of April. 

  Aramco’s diversion of crude to Yanbu through its 7 million-barrels-a-day West-to-East pipeline has supported a higher volume of sales at the now elevated prices compared to its Gulf peers, the exports of which have been more seriously affected by the blockade of the Strait of Hormuz.

  Other Saudi names also benefiting from this combination of ongoing access through Yanbu and energy repricing produced the cleanest gains, with Rabigh Refining more than doubling in value to $11.7bn despite a $1.1bn loss, Ades Holding rising 40% to $5.8bn, Luberef rising 28% to $5.8bn and Yansab also seeing double-digit returns. 

  In the UAE, by contrast, Adnoc Gas has remained broadly flat at $66.7bn, with its Q1 2026 net income dropping 15% and conflict damage estimates indicating that full capacity will not be restored until 2027. Borouge meanwhile held, while Adnoc Drilling and Adnoc Distribution gained by 14% and 8%, respectively. 

  There was some slippage in the petrochemicals sub-cluster, with Saudi Basic Industries Corporation (Sabic) posting a net loss of $6.96bn and sliding 3%, alongside a 2% slide for the energy sector-adjacent Industries Qatar.

  Banking and industry

  The banking sector, which accounts for 33 of the 100 entries and 18% of the list by value, expanded by an aggregate 6.3% in absolute terms. Al-Rajhi Bank, the largest banking entry at $107.9bn, reported FY2025 net profit up 26% to SR24.8bn ($6.6bn); total assets passed SR1tn for the first time and Q1 2026 net profit rose a further 14%. 

  Emirates NBD, up 23% year-on-year to $47.1bn, reported FY2025 record profit before tax of AED29.8bn ($8.1bn) and likewise crossed AED1tn in total assets. 

  Kuwait Finance House also rose by 19%, Abu Dhabi Commercial Bank 19% to $28.7bn and Saudi National Bank 11%. Qatar National Bank stalled and slid 1%, while several smaller banks saw gains. Egypt’s Commercial International Bank rose 74% to $8.4bn off a depressed base, Jordan’s Arab Bank meanwhile rose 55%, Oman’s Bank Muscat by 52% and RakBank by 32%. 

  Several sectors have gained significantly owing to their direct exposure to the Iran conflict’s supply-chain repricing, including logistics, fertilisers and mining. 

  Logistics firms in the list gained 44% in absolute terms, with Saudi Arabia’s Bahri reporting Q1 2026 net profits up 303% year and revenue up 129%. 

  Marsa Maroc, the Casablanca-listed port operator, also entered the list at $6.6bn, up 85% on an African expansion that spans 34 terminals across 20 ports following a Liberia management deal signed in February. 

  Adnoc Logistics rose 32% to $11.6bn, while Air Arabia, the Sharjah-based low-cost carrier, joined the list at $6.1bn as it absorbed redirected long-haul flows. Nakilat, the Qatari liquefied natural gas shipping operator, was the sector’s sole softener, down 12% on slower throughput.

  Mining and fertiliser entries sit alongside the logistics gainers. Jordan Phosphate Mines is the cleanest single expression of the post-Hormuz repricing visible on the list – up 127% year on year to $13.2bn, as the World Bank’s April 2026 Commodity Markets Outlook projects fertiliser prices to rise nearly 31% in 2026. 

  Maaden rose 23% to $65.3bn after FY2025 net profit jumped 156%, backed by record phosphate production; high aluminium output; and rising silver, copper and aluminium prices linked to artificial intelligence, data centre, solar and electric vehicle demand. 

  Morocco’s Managem also entered the list at $19.7bn, having almost tripled in value in the past two years on cobalt, silver and copper prices and African expansion. 

  Sabic Agri-Nutrients rose 44% on a 30% 2025 net profit increase, while Fertiglobe rose by 40% – both potentially anticipating a 60% forecasted rise in urea prices.

  Property and other trends

  The direction of the property and real estate sector has been uniformly downward. The Iran conflict has driven both a slump in UAE property sales and prices and a similar tourism-adjacent correction in Saudi Arabia. Both the Mecca-focused Umm Al-Qura and Jabal Omar development firms have seen their valuations slashed by more than a third, while Makkah Construction & Development slid by 15%. 

  The UAE’s Emaar Properties and Dar Al-Arkan and Qatar’s Ezdan Holding have also all seen slides of more than 15%. Kuwait’s Mabanee, which rose by 22%, is the one exception in the sector.

  In Saudi Arabia’s mid-tier, Acwa Power shed 29% in value even as its revenue rose 18% and its net income 5.4%. Elm Company likewise shed 33%, Dr Sulaiman Al-Habib 19% and the Saudi Tadawul Group 21%. 

  Mouwasat Medical Services, MBC Group, Nahdi Medical and Saudi Logistics Services fell out of the list entirely on the same trajectory. Each had reported FY2025 earnings rises before the decline. What corrected was the valuation, not the operations.

  Acwa Power’s trailing four-quarter average price-to-earnings ratio was 166x, and even after this year’s decline sits at 88x against the Saudi market average of 17.8x. Elm sits at 26x, Al-Habib at 33x, Saudi Tadawul Group at 42x – all rich by any comparable benchmark.

  Many of these entries have fallen away from their peak valuations as the cooling of the gigaproject programme since early 2025 has undermined sentiment. 

  One example that sits on the same axis from the UAE side is Abu Dhabi National Energy Company (Taqa), which fell by 28% from $95.3bn to $69.0bn despite a 6% net income rise, even as capital expenditure also expanded by 50%.

  There are now nine entries from Morocco’s Casablanca bourse against six a year ago, with an aggregate value of $74.7bn, up from $50.8bn. Industrial contractor Societe Generale des Travaux du Maroc,entered via a December 2025 initial public offering (IPO). Several Moroccan stocks have also slipped, however, including Taqa Morocco, down 42%; Maroc Telecom, down 18%; Banque Populaire, down 13%; and Bank of Africa, down 10%.

  There has been a similarly divergent trend among 2024 IPO entrants. While OQ Exploration & Production rose 68% to $10.1bn and is now the largest stock on the Muscat Securities Market, the UAE’s Talabat – 2024’s second-largest IPO at $9.2bn – has corrected 33% to $6.1bn.

  The Multiply Group has been replaced on the list through its November 2025 merger into 2PointZero Group, which now sits in the top 30 entries at $19.6bn.

  Regional repricing

  Four trends underpin the list’s 7.2% recovery. The conflict has repriced specific cohorts sharply higher – logistics up 44%, mining and fertilisers up 43%, the Yanbu refiners returning, and Aramco recovering to $181bn – with gains contingent on the Strait of Hormuz remaining closed.

  Regional banks have maintained last year’s momentum, with assets crossing trillion-unit thresholds and loan books supported by project activity. Six names have posted double-digit gains that are unlikely to reverse if conditions normalise.

  Saudi mid-tier stocks have corrected largely on valuation rather than operations, despite many reporting earnings growth through 2025, as confidence in gigaproject-driven growth has weakened. Property has also softened in the region as conflict has reduced routine and religious tourism.

  The 12-month outlook depends on whether Hormuz reopens, whether Saudi mid-tier valuations stabilise, and whether banking expansion holds under broader repricing.

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  John Bambridge