Saudi Arabia draws Gulf business as war rattles region, Reuters reports

Sara Amini flew from Dubai to Riyadh to see where Gulf businesses were still spending, and what she found captured a bigger paradox: even as war has unsettled the region, Saudi Arabia is drawing business because investors see it as the Gulf’s safest growth platform.

Restaurants in the capital were busy, companies were still talking about expansion, and capital was moving toward the kingdom rather than away from it. That pull has strengthened as Saudi Arabia’s strong domestic consumer base and its efforts to reroute crude oil and logistics through Red Sea ports have made the country look less exposed to the Strait of Hormuz, even as conflict fears have hit other Gulf economies harder.

The Saudi economy is hardly untouched. Gross domestic product shrank 1.5% in the first quarter of 2026 from the previous three months as oil activity declined. Yet the non-oil private sector has been recovering. The Riyad Bank Saudi Arabia Purchasing Managers’ Index rose to 52.8 in May from 51.5 in April, a sign of expansion that followed a March reading of 48.8, the first contraction since August 2020. The rebound pointed to stronger output and new orders, firmer domestic demand and the restart of delayed projects.

That resilience is also showing up in business behavior. Companies are seeking stability in Saudi Arabia, and demand for fund establishment and local capital has increased, suggesting that money is being repatriated from other Gulf states. In a region where investors are reassessing risk by the day, Saudi Arabia is benefiting from scale, liquidity and the sense that its economy can absorb shocks better than its neighbors.

The kingdom’s broader strategy is reinforcing that shift. The Public Investment Fund approved its 2026-2030 strategy on April 15, 2026, moving from rapid growth to sustained value creation, greater investment efficiency and stronger governance, with more private-sector participation. The fund said its Vision portfolio will help catalyze domestic ecosystems spanning tourism, travel and entertainment, advanced manufacturing, industrial and logistics, clean energy and renewable infrastructure, urban development and NEOM. Compared with the earlier megaproject-heavy push, the new approach is more selective and more return-focused, with emphasis on sectors such as tourism, industry, AI and logistics.

Saudi Aramco has added another layer of support. The company said its East-West Pipeline reached its maximum capacity of 7.0 million barrels per day in the first quarter of 2026, helping exports move through the western side of the kingdom. Aramco also reported adjusted net income of $33.6 billion and a base dividend of $21.9 billion for the quarter. For now, conflict in the Gulf is redirecting business toward Saudi Arabia. The test will come if the war widens enough to shake the very trade routes and confidence that are currently working in the kingdom’s favor.