Saudi Arabia has posted its biggest quarterly budget deficit since 2018 in a sign of the challenges faced by the Middle East’s largest economy in the wake of the Iran war.

The budget shortfall of 125.7 billion riyals ($33.5 billion) is more than double that for the same period last year.

Despite the kingdom attempting to rein in some of its spending on big-budget projects and splashier investments like LIV Golf, expenditure rose about 20% to $103 billion during the quarter.

While the conflict has caused disruption and damage to some infrastructure, Saudi Arabia has now diverted most of its oil exports to the Red Sea port of Yanbu and is benefiting from the higher oil price, meaning it could see improved revenues and a smaller shortfall for the second quarter if it maintains export levels, Bloomberg reports.

On the UAE’s eastern coast, it was back to wartime footing after Iranian drone attacks set off a fire at the Port of Fujairah’s petroleum storage complex and struck an empty ADNOC oil tanker. But in Abu Dhabi’s ADNEC Centre, it was business as usual at the annual Make It In The Emirates expo.

After Dr. Sultan Al Jaber, the CEO of ADNOC and UAE Minister of Industry and Advanced Technology, opened the four-day show on Monday, tens of thousands of attendees milling through the vast halls and 1,200 exhibitors betrayed precious little concern.

“We are here for the business opportunities basically,” Ravina Kumari, a sales executive at Daman Insurance, told The Circuit’s Omnia Al Desoukie. “I don’t think there is any fear. We don’t feel that.”

The renewed Gulf hostilities, however, sent oil prices higher and global equities lower as the Iranian attacks against U.S. and UAE targets stoked fears of supply disruption through the Strait of Hormuz. Brent crude climbed toward a four-year high.

The UAE, meanwhile, is in talks with the U.S. over a potential currency swap line that would provide it with direct dollar liquidity access in times of crisis, Foreign Trade Minister Thani Al Zeyoudi said on Monday. 

“It’s part of an elite group that the U.S. is having this swap policy with,” Zeyoudi said at the Abu Dhabi conference. “Being part of that group means that transactions… trade, investments between both nations reach ⁠a level where that swap is highly needed, adding the move is “not about bailing out.”

Masdar is bolstering its expansion in the Iberian market with the purchase of another major stake in wind and solar assets.

The Abu Dhabi green energy company has agreed to buy a 49% stake in Spanish energy group Repsol’s largest renewables portfolio, according to a Spanish media report.

The Minerva project includes 13 wind farms and six solar farms, with 706 megawatts of installed capacity, and is valued at about 850 million euros ($996 million).

The deal is in its final stages and is likely to be formalized within weeks, newspaper Cinco Dias reported on Monday.

Masdar has been snapping up European assets, with a strong focus on Spain. In October, it finalized its purchase of a 49.99% stake in a $432 million portfolio of four solar plants from Endesa.

By announcing its decision to leave OPEC last week, the UAE has seized an opportunity to attract more investment and strengthen the economy, ADNOC chief Dr. Sultan Al Jaber says.

“It serves our national interests and long-term strategic objectives, aligns with our industrial, economic, and developmental ambitions, and gives us greater ability to accelerate investment, expand, and create value,” Al Jaber, the state oil company’s Group CEO and the UAE Minister of Industry and Advanced Technology, said today in Abu Dhabi.

Al Jaber spoke at the opening of the annual “Make it in the Emirates” expo, a four-day government-sponsored trade show that promotes domestic manufacturing by offering incentives to attract global companies.

Among the event’s backers are ADNOC, L’imad Holding, International Holding Co., Mubadala and Dubai Islamic Bank.

The UAE’s exit from OPEC, which took effect May 1, was largely connected to its irritation with the oil cartel’s dictating of production quotas across the industry to keep prices high. UAE Energy Minister Suhail Al Mazrouei has said disruptions to oil shipping caused by the current conflict created favorable conditions to leave the organization.

Parting with OPEC “is part of a broader effort to reshape our economy and industrial base through a vision that connects energy, technology, and industry, aligning our resources with national priorities to build a stronger, more resilient economy,” Al Jaber said.

MSC, the world’s largest ocean cargo carrier, is launching a new Europe-Gulf shipping service that uses sea, rail and trucking routes to get around the blockaded Strait of Hormuz.

The new line will run from Antwerp through the Suez Canal to Red Sea ports before moving goods overland across Saudi Arabia, Arabian Gulf Business Insight reports.

The shift comes as the U.S.-Iran blockade has disrupted supply chains and threatened a sea corridor that handles about 20% of global oil and gas flows.

MSC said the hybrid network, which will begin operating May 10, aims to maintain reliable transit times to major Gulf hubs, including Abu Dhabi, Dubai and the Saudi Port of Dammam.

Top Gulf officials and investors will be taking the stage next week at the Milken Institute Global Conference 2026 in Los Angeles as the financial world focuses on the conflict with Iran.

Leading the UAE delegation will be Khaldoon Al Mubarak, Managing Director and Group CEO of Mubadala, joined by Deputy CEO Waleed Al Mokarrab Al Muhairi and Camilla Languille, Co-CEO of the sovereign wealth fund’s private equity platform.

Among other Emirati participants will be Omar Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, and Majid Al Suwaidi, CEO of Altérra.

The conference, which takes place May 3-6 at the Beverly Hilton & Waldorf Astoria Beverly Hills, comes as investors grapple with economic fallout from the Iran war, which has disrupted oil flows and led to record gasoline prices.

The Saudi delegation will include Bandar Al-Khorayef, Minister of Industry and Mineral Resources; Khalid Al-Falih, Minister of Investment; and Reema Bandar Al Saud, Saudi Ambassador to the U.S. Also on the program are Manar Al-Moneef, Chief Investment Officer of NEOM; Princess Noura bint Faisal Al Saud, Founder of Culture House; and Prince Turki Al Faisal Al Saud, Chairman of the King Faisal Center for Research and Islamic Studies.

From Qatar, Ali Al Kuwari, Minister of Finance, and Mohsin Pirzada, Head of Funds at the Qatar Investment Authority, will participate, along with Jasem Al Budaiwi, Secretary-General of the Gulf Cooperation Council.

The Middle East could account for roughly a quarter of global AI infrastructure spending over the next five years, Thiel Capital Managing Director Jack Selby says.

If geopolitical instability forces delays or cancellations of investments in data centers and other large-scale AI projects, the ripple effects could damage the industry’s highly leveraged tech and infrastructure firms, Selby said in a CNBC interview.

“I think markets have underappreciated how important the Middle East region is for CAPEX spending as it relates to AI and AI infrastructure,” Selby said.

“If the Middle East starts taking some of these projects offline,” he said, “the impact on the market could be much, much, much larger than what is currently priced in.”

LIV Golf is seeking new investors after Saudi Arabia’s Public Investment Fund said it will stop funding the league beyond this season because the investment “no longer aligns with its priorities.”

The Saudi sovereign wealth fund, which has poured more than $5 billion into LIV since 2022, has retreated from a range of other costly projects over recent months, including scaling down its desert ski resort at Trojena and the massive cube-shaped Mukaab development in Riyadh.

Beyond LIV Golf, the PIF said in a statement on Thursday that it will continue to provide backing for “current and future investments in various sports as a priority sector.”

U.S. President Donald Trump, who has hosted LIV Golf events at his resorts, called on the PGA Tour to lift its boycott of players who left for the new league’s sky-high compensation packages.