Construction has begun on a high-speed rail line linking Abu Dhabi and Dubai, with trains set to cover the route in 30 minutes at speeds of up to 320km/h when the project completes in 2031.

The 150km line, the UAE's first high-speed rail link, will include 97km of track, 11.2km of tunnels and four stations in the Abu Dhabi section.

It is being built by a consortium comprising Turkish firm Kalyon Construction, UAE-based National Projects and Construction, Trojan Tunneling and China State Construction Engineering Corporation.

The project is being developed by Etihad Rail, which is building a 900km passenger rail network across the UAE valued at $13 billion. Construction is proceeding on schedule, Kalyon said.

The new line will operate at more than 50% faster than existing UAE rail infrastructure, where trains currently run at around 200km/h. The Abu Dhabi-Dubai route will be the first in the country to reach 320km/h.

The announcement comes six weeks after the UAE launched its first intercity passenger rail service, which began operating between Fujairah and Abu Dhabi on June 30.

The Gulf's travel and tourism sector is forecast to shed around 137,000 jobs in 2026 as the US-Iran conflict suppresses visitor demand, with Saudi Arabia and the UAE bearing the heaviest losses, according to the World Travel & Tourism Council (WTTC).

The sector employed approximately 3.2 million people across the six GCC states in 2025, a figure the WTTC expects to fall by 4.3% this year. Saudi Arabia is forecast to lose 69,000 roles, while the UAE faces a drop of 46,000 despite Dubai's continued appeal as a leisure destination. Many UAE hotels have opted to close temporarily during the conflict to carry out refurbishment works.

"This was a temporary aviation and confidence-led disruption, not a demand collapse. The Gulf isn't facing a demand problem so much as a confidence and connectivity one, and those recover far faster," said Hala Matar Choufany, president of the Middle East and Africa at hospitality consultancy HVS, adding that the region's mix of domestic, religious and regional tourism had helped cushion the impact.

Hotel occupancy across the Middle East is down 19% in the year to the end of July, with revenue per available room declining 21%, according to hospitality data firm STR. "Average room rates are holding up to a point," said Philip Wooler, STR's senior director for the Middle East and Africa. "But Dubai is one of the biggest hotel markets in the world so average daily rates are under pressure."

The WTTC estimates the conflict is costing the Middle East's tourism sector $600 million a day. After growth of 5.3% in 2025, the region's travel and tourism activity is forecast to contract by 14.5% this year — the only region globally expected to record a decline. By comparison, tourism in Asia-Pacific and Africa is projected to grow by 5.4%.

The longer-term outlook is more positive. The WTTC forecasts Middle East travel and tourism will expand at a compound annual rate of 6.3% between 2026 and 2036 — faster than any other region. Saudi Arabia is driving much of the investment underpinning that outlook, having committed more than $24 billion to the sector in 2025, a 19.4% increase year on year and more than 2.5 times the UAE's outlay. Global investment in travel and tourism exceeded $1 trillion in 2025 for the first time since 2019.

Malaysia recorded a sharp decline in crude oil imports in March as cargo arrivals from the Gulf whittled down due to the closure of the Strait of Hormuz. 

Crude oil imports from the Gulf region fell 66% on the previous month, after recovering in April supported by a rise in imports from West Asia, the Red Sea and other Southeast Asian countries, according to Lloyd’s List Intelligence. 

Iran’s closure of the Strait of Hormuz has cast a critical spotlight on the waterway, through which a fifth of the world’s oil transits. Nearly 15 million barrels per day (mb/d) of crude oil, equalling 34% of global crude oil trade, passed through the strait last year, according to the International Energy Agency.

Vast majority of the crude oil transiting the waterway was destined for Asia, with China and India receiving a combined 44% of these exports. 

Meanwhile, around 20 mb/d of oil – including crude oil and products – transited the strait in 2025, the agency said. 

The Strait of Hormuz logged increased maritime traffic between July 27 and August 2, with 84 transits up from 45 recorded in the previous week, according to data shared by the maritime data and intelligence company. Non-Iranian-linked traffic also rose modestly as containerships and gas carriers resumed trackable transits.  

The Islamabad Memorandum of Understanding signed between the US and Iran in June granted relief to vessels stranded in the Gulf, reducing trapped mainstream tankers from more than 160 to just 29.

Its collapse last month, however, left a new clutch vulnerable with 65 ships that entered during the MoU period yet to leave the region. 

“Owners and operators remain reluctant to send ships through Hormuz amid continued uncertainty,” Lloyd's List added. 

The US is maintaining its blockade of Iranian ports, with 45 merchant ships having been redirected, two vessels disabled, and two boarded.  

Iran’s Foreign Ministry spokesman said on Wednesday that talks between Tehran and Muscat on the strait have entered their final stage. The negotiations also include plans to establish a new middle corridor in the strait as well as include a service fee. 

Iran is looking to charge transiting between 5%-7% of the price of their cargoes, Reuters reported, citing a senior Iranian official. Oman is discussing fees of around 3%, while Washington is sticking to a no-fee policy.

Saudi Arabia has recorded its first quarterly contraction since the second quarter of 2024 and its steepest decline since the second quarter of 2020, as the US-Iran conflict continues to disrupted shipping activity and weigh on regional economies. 

Saudi’s gross domestic product slid 4.8% from April through June this year, driven by a 24.7% decline in oil activities, according to flash estimates issued by the kingdom’s General Authority for Statistics.

The oil sector slump and widespread implications of the regional conflict have triggered a sharp reversal from  3% growth logged in the previous quarter.   

Oil activities, which include extraction and refining of crude oil and natural gas, contributed negatively to real GDP growth by 5.4 percentage points. The overall decline was partially offset by a nominal rise in government (0.9%) and non-oil activities grew (0.6%).

Seasonally adjusted real GDP also decreased 4.9% quarter-on-quarter in Q2, led by a 21.5% slump in oil activities.

The estimate comes on the heels of the International Monetary Fund’s 2026 Article IV consultation report issued Wednesday, extoling the Gulf’s largest economy on its economic resilience during the current conflict, backed by strong fundamentals, diversified oil and logistics infrastructure. 

The IMF projected the kingdom’s economy to expand by 1.7% in 2026, against a 1.1% prediction in its World Economic Outlook report issued earlier this month. The fund’s growth projections for next year remained unchanged at 5.5%.

Saudi Aramco shuttered its 400,000-barrel-per-day Jazan refinery on July 27 following damage from an attack, according to a Reuters report.

The facility, which sustained damages to its integrated gasification combined-cycle complex and an oil storage area, is expected to resume operations by August 15.  

Aramco share price fell 1% on July 28, closing at 26.3 Saudi riyals, shedding 0.26 Saudi riyals per share from the previous day’s close of 26.56 Saudi riyals. 

Inflation is expected to rise modestly to 2.2%, the IMF has said, with higher shipping and insurance costs partly offset by subdued rent inflation and price caps on some fuel and food items. 

A modest reduction in the non-oil primary deficit is appropriate in 2026, it added, while backing fiscal consolidation and Vision 2030 reforms for sustained growth and diversification. 
 

The UAE's free trade negotiations with the European Union are advancing more slowly than talks with other partners, with the bloc's insistence on including non-trade issues identified as the key obstacle, the country's foreign trade minister has said.

The seventh round of negotiations with the EU has concluded, minister Thani bin Ahmed Al Zeyoudi said this week, adding that the EU's approach of linking trade deals to corporate sustainability reporting and labour standards "will not work with us." Several other countries, including the US, have raised similar objections to the EU's stance.

"The slow pace stems from the EU insisting on including non-trade matters," Al Zeyoudi said, a position that has drawn criticism from multiple trading partners engaged in separate negotiations with Brussels.

The comments came as Al Zeyoudi confirmed the UAE is continuing talks with at least 20 countries on comprehensive economic partnership agreements (CEPAs). Negotiations with Rwanda, Ghana and Zambia have reached their final stages, while talks with Bangladesh and Peru are making good progress.

The UAE has concluded 37 CEPAs to date, 18 of which are already in force. Non-oil foreign trade rose 13% year on year in the first half of 2026 to $517 billion, despite four months of geopolitical disruption stemming from the US-Israeli war with Iran. Non-oil trade with fully implemented CEPA partners reached $82.7 billion, including $52.8 billion in imports and $18 billion in non-oil exports.

Al Zeyoudi also said the UAE is working to develop logistics infrastructure and trade corridors to strengthen resilience against global supply chain disruptions.

The United States and Saudi Arabia have signed a civil nuclear cooperation agreement that would allow the kingdom to enrich uranium domestically and use American technology to develop its nuclear programme, in a deal that stops short of the safeguards typically required to prevent weapons proliferation.

The agreement, known as a 123 Agreement, does not include the gold-standard non-proliferation provisions found in comparable accords, nor does it require Saudi Arabia to adopt the International Atomic Energy Agency's additional protocol, which grants inspectors broader powers to investigate undeclared nuclear activity. The deal must pass a 90-day congressional review before entering into force.

The Department of Energy described the pact as a peaceful nuclear cooperation agreement that will create a decades-long, multibillion-dollar partnership. However, President Donald Trump cast doubt on its future shortly after signing, saying the deal would be conditional on Saudi Arabia joining the Abraham Accords to normalise ties with Israel — a step Riyadh has said it will not take without a credible roadmap to Palestinian statehood.

The agreement is understood to permit Saudi Arabia to enrich uranium domestically and reprocess spent nuclear fuel. Saudi Arabia has long maintained it will not sign the IAEA's Additional Protocol, citing national sovereignty — a position that analysts say aligns with the current US administration's scepticism of intergovernmental bodies.

Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, has previously stated that the kingdom intends to use its domestic uranium resources across the entire nuclear fuel cycle and ultimately export uranium products. Some experts question whether a nuclear programme is necessary given Saudi Arabia's existing energy assets.

The timing of the agreement raises additional questions as the US - Iran conflict, which was based on Trump's insistence on preventing Iranian nuclear weapons development, continues. 

Gulf states have explored nuclear energy for decades, but only the UAE has operationalised a plant. The Barakah facility in Abu Dhabi, which came online in 2020, now supplies around a quarter of the country's electricity, though a drone strike in May damaged an electrical generator just outside its inner perimeter.