Gulf

1. An expanding theater
2. Gulf earnings diverge
3. MBZ’s Berlin visit
4. Mubadala buys Luckin
5. Dubai Holding’s new office

Kuwait is going medieval on diesel thieves.

Houthis complicate war

A month after Pakistan joined Saudi Arabia and Türkiye in a mutual defense pact, Pakistani officials have reportedly gone to Iran at Riyadh’s behest to press Tehran to rein in the Houthis, Reuters reported. The Iranian-backed militia has struck military and energy targets in Saudi Arabia, near the Yemeni border, prompting dozens of counterstrikes from Saudi forces in Yemen on Wednesday, and the group has disrupted shipping in the Bab al-Mandeb Strait.

The metastasizing Iran war, and tit-for-tat US and Iranian strikes in the Strait of Hormuz, have pushed oil above $100 a barrel. Saudi Arabia, a key price stabilizer in the market as a major exporter, is running out of ways to get crude out. It shipped 3.2 million barrels a day last month, the lowest level in at least nine years, according to data from Kpler.

US President Donald Trump appears committed to maintaining the US blockade in Hormuz until Iran reaches an agreement with Washington, a Pakistani diplomat told Reuters, while Qatar is trying to bring both sides back to negotiations. While Trump said the war could wrap up “immediately” after the mid-term elections, top advisers, including the vice president and secretary of state, have reportedly privately warned the conflict may persist until the end of his term, according to The Wall Street Journal.

— Kelsey Warner

Saudi, Abu Dhabi firms outperform in war

Corporate profits in the second quarter revealed a widening divide between Gulf economies six months into the Iran war. Listed companies in Saudi Arabia and Abu Dhabi are growing quickly, benefiting from higher oil prices and their ability to keep energy exports flowing, while firms in Bahrain, Dubai, and Qatar were still profitable but are feeling the impact of disruption to trade, travel, and gas exports. Aramco alone had $32.3 billion in net profit in the second quarter, around 43% of the region’s $74.8 billion in listed-company profits, according to KAMCO Invest, a Kuwait-based asset manager.

Kuwait was an outlier last quarter. The country has been hit hard by Iranian strikes and hasn’t exported much oil since March, but earnings growth rose sharply, reflecting a lower base and one-off gains in banking and telecoms rather than broader economic strength.

— Mohammed Sergie

MBZ in Germany to strengthen ties

UAE President Sheikh Mohamed bin Zayed is expected to leave a state visit to Germany with several billion dollars’ worth of deals spanning development, energy, and technology. UAE Minister of State Lana Nusseibeh said the agreements would mark the opening of a new stage in relations with Europe’s largest economy.

“A stronger UAE–Germany relationship can help connect European industrial and technological strengths with capital, energy, and growth opportunities across the Gulf, Asia, and Africa,” Nusseibeh said in Berlin on Wednesday. She didn’t provide specifics about the deals but said they would be “a statement of intent about our future.” Gulf countries are stepping up efforts to broaden their strategic alliances and seek deeper ties with trading partners at a time marked by widespread geopolitical unrest and strained supply chains.

Mubadala buys into China’s favorite coffee

Abu Dhabi sovereign wealth fund Mubadala has taken a stake in China’s Luckin Coffee as part of a $1 billion investment alongside private equity firm Centurium Capital. Mubadala has been one of the world’s most active sovereign wealth funds, a run that has continued despite the Iran war.

The Luckin investment, which will give Mubadala a significant minority stake in China’s biggest coffee chain, adds to growing economic ties between the two nations. Mubadala has invested more than $20 billion in China across more than 100 deals since 2015.

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed visited Beijing in April for talks on expanding bilateral economic and diplomatic relations. While Chinese investment flows are growing, the US still accounts for 44% of Mubadala’s $385 billion of assets under management and US tech firms have become crucial to the UAE’s ambitions to be a global AI leader.

— Matthew Martin

Dubai goes big on offices

Dubai Holding, the investment company owned by Dubai’s ruler, signed the largest construction contract in its history to build a new headquarters beside the emirate’s de facto seat of government, Emirates Towers. The 5 billion dirham ($1.4 billion) headquarters, a circular building designed by SOM, the architecture firm behind the Burj Khalifa, will add a novel shape to Dubai’s skyline when it opens in 2029, with 754 branded residential units in a pair of towers expected a year later. The contract went to China State Construction Engineering Corporation, the Chinese state builder with more than 110 projects across the Gulf, where Chinese firms continue to win some of the region’s biggest building jobs.

United Airlines CEO Scott Kirby believes America needs “a flag carrier.” Now he is betting regulators will let him create one. On this week’s episode of The CEO Signal, presented by PwC, Kirby argues that airlines are not commodities and that greater scale could benefit customers — even as he acknowledges a fundamental obstacle to consolidation: “We can’t get it done without a willing partner, and we don’t have one.”

As a former card counter, Kirby applies poker logic to business, embracing calculated risks. He tells Penny and Andrew why United gambled on expanding its fleet during Covid, why CEOs “don’t have to be totally right,” and why their job is not to work hard, but “to think hard.”

Checking In

• Wizz Air is returning to the UAE a year after shutting its Abu Dhabi base, with 12 routes and 49 weekly flights planned across Dubai, Abu Dhabi, Jeddah and Amman. The low-cost carrier quit in 2025, blaming geopolitical instability and engines that struggled in the Gulf heat. — The National

Economy

• Saudi Arabia’s main business lobby is studying ways to bring outsourced jobs back to the kingdom, including in accounting, call centers, consulting, and IT. The country spent about 8 billion riyals ($2.13 billion) on imported professional and management consulting services in the first quarter. — Arab News

Real Estate

• Dubai developer Azizi is entering northern neighbor Sharjah with a 30 billion dirham ($8.2 billion) master community of more than 10,000 residential units. The company has announced a total of $107 billion across three emirates since March. — Enterprise News

Retail

• Majid Al Futtaim, the Dubai-based conglomerate that owns some of the region’s largest malls, said operating profit rose 25% in the first half of the year as revenue stayed broadly flat. Real estate development projects drove revenue growth, while retail was the weak spot, declining 4% due to “more challenging conditions, particularly in the UAE,” in an acknowledgment of the impact of the Iran war.

Kuwait is taking a page from Qatar’s playbook: When a vehicle is used to break the law, crush it. Authorities flattened 21 tankers and trucks seized in two cases involving the theft, transport, and resale of subsidized diesel. Some owners had knowingly leased their vehicles for the scheme, according to Kuwait’s interior ministry.

Qatar did the same for reckless driving two years ago, feeding a Toyota Supra into a car crusher after its driver was filmed doing donuts on a highway. As with the Qatari case, the Kuwaiti decision boggles the mind, especially when tankers could be used to ferry valuable crude rather than becoming scrap. Perhaps it’s a warning shot to our future AI overlords.

— Mohammed Sergie