RIYADH: Saudi Arabia and the UAE are expected to lead a fresh wave of Gulf project awards in the second half of 2026 as governments press ahead with major investment plans despite higher shipping, insurance and construction costs linked to the Iran conflict.
A recent report by Abu Dhabi Commercial Bank cited by Asharq Bloomberg says the pipeline of projects awaiting award remains substantial, led by the Arab world’s two largest economies.
Monica Malik, ADCB’s chief economist, said project data for the second quarter showed investment activity had remained resilient despite the conflict’s impact on the region.
“The data continues to indicate a strong willingness to progress with key development plans,” she wrote in the report.
The conflict has also strengthened the case for new investment in trade infrastructure, supply chains and logistics continuity, particularly projects aimed at reducing reliance on the Strait of Hormuz.
“Regional developments have reinforced the importance of building greater resilience by diversifying routes for key exports (including hydrocarbons and chemicals),” Malik said.
“We expect projects linked to these initiatives to become more visible toward end-2026 and into 2027.”
In the UAE, expected awards include more than $10 billion in contracts for the expansion of Dubai’s Al Maktoum International Airport, as well as a $10 billion award for the second phase of the TA’ZIZ industrial chemicals zone in Abu Dhabi’s Al Ruwais Industrial City.
Several oil and gas contracts are also expected to come to market.
In Saudi Arabia, transport is likely to be a major driver of project activity during the second half. The report cited the possible award in the third quarter of Riyadh Metro’s Line 7, a project valued at about $15 billion.
The value of contracts awarded across the Gulf Cooperation Council fell 26.1 percent in the second quarter from the previous three months. However, awards were still 32 percent higher than a year earlier and broadly in line with levels recorded in the fourth quarter of 2025, according to the report.
Saudi Arabia recorded a jump in awards during the second quarter, tentatively pointing to progress in the next phase of the Kingdom’s investment program, Malik said.
The UAE recorded the highest absolute value of awards in the Gulf during the first half of 2026.
The report said investment activity was supported by raw-material inventories, alternative transport routes and regional production of critical building materials, allowing most projects to remain broadly on schedule.
Some tenders have been delayed, however, as rerouting, shipping, fuel and insurance costs push up construction prices.
