Gulf and Red Sea Regions

Saudi Arabia is keen to strengthen its partnernships with Hong Kong and mainland China, the Saudi communications and IT minister Abdullah Al-Swaha said on Sunday (2 July). Speaking at the "One Gateway Shared Vision — Hong Kong x Saudi Arabia" event in Hong Kong, Abdullah Al-Swaha said closer collaboration would help boost the Kingdom’s Vision 2030 reform agenda, a strategic framework to reduce Saudi Arabia's dependence on oil and diversify its economy, and develop public service sectors such as healthcare, tourism, education, infrastructure and recreation. "Hong Kong and Saudi Arabia are going through very promising transformations, where both economies are financial hubs in their own regions. We have an opportunity to build an innovation bridge, to leapfrog into the future with an innovation-based economy," he said. A "pro-partnership and pro-openness" Saudi Arabia was willing to do business with "any partner that can comply with our security and regulatory requirements," he said. Saudi authorities would look to work closely with Hong Kong across a range of sectors, including health sciences and biotechnology, environmental, cloud computing, artificial intelligence and smart cities, he said. Al-Swaha's visit to Hong Kong the Arab-China Business Conference held in Riyadh last month, at which Saudi Investment Minister Khalid Al-Falih said the Kingdom could serve as China’s gateway to the Arab world.

The United Arab Emirates (UAE) and Qatar have become the latest Gulf countries to resume diplomatic ties in a string of diplomatic rapprochements in the region. Qatar's Ministry of Foreign Affairs announced the decision in a tweet on Monday (19 June), adding that embassies and consulates would reopen and resume work on the same day. The restoration of ties "represents the will of both countries’ leaders to strengthen joint Arab collaboration and achieve the aspirations of both peoples," the ministry said in a statement. The UAE’s Foreign Minister Sheikh Abdullah bin Zayed Al-Nahyan and his Qatari counterpart Sheikh Mohammed bin Abdulrahman Al-Thani, who is also the Prime Minister, exchanged congratulations on the return of embassies, with both officials hailing the restoration of ties as heralding a “new stage of cooperation and partnership” that confirms the deeply rooted relations that bind both countries, according to a statement on Emirates News Agency (WAM). The current regional trend was in large part set in train by the announcement on 10 March that Saudi Arabia and Iran would restore diplomatic ties that had been broken since 2016.

Arab League countries and China have signed some 30 deals that total $10bn. This came on the first day of the 10th Arab-China Business Conference taking place in the Saudi capital Riyadh, on 11-12 June. The 30 investment agreements cover a wide range of areas, including technology, renewables, agriculture, real estate, minerals, supply chains, tourism, and healthcare. According to the Saudi Investment Ministry, the Saudi government also signed deals with a number of Chinese entities in areas such as automotive research, development, manufacturing and sales, development of tourism and other apps, and production of rail wagons and wheels in Saudi Arabia. The biggest deal reached totalled $5.6bn, and was struck between Saudi Arabia's Investment Ministry and Human Horizons, a Chinese developer of autonomous driving technologies and manufacturer of electric cars. Saudi Arabia and Hong Kong-based Android developer Hibobi Technology Ltd signed a $266 million deal to develop tourism and other apps.

Iran has reopened its embassy in the Saudi capital of Riyadh on Tuesday (6 June), the Saudi outlet Al Arabiya reported on Tuesday. The agreement to reopen embassies in each other's respective capitals was struck on 10 March in Beijing, re-establishing diplomatic ties that had been broken for years. You can read more about the 10 March agreement here. “We consider today an important day in the relations of the Islamic Republic of Iran and the Kingdom of Saudi Arabia,” Iranian Deputy Foreign Minister Alireza Bigdeli told a flag-raising ceremony, adding that “the cooperation between the countries is entering a new era.” At a meeting with his Saudi counterpart Prince Faisal bin Farhan Al Saud in Cape Town last Friday (2 June), Iranian Foreign Minister Hossein Amir-Abdollahian expressed satisfaction with the "good progress made in bilateral ties". The two foreign ministers were meeting in South Africa on the sidelines of the “Friends of BRICS” summit. The next BRICS summit between Brazil, Russia, India, China and South Africa will take place in Johannesburg in August. Meanwhile, the opening of the Iranian consulate in Jeddah is expected to take place on Wednesday (7 June).

The group of oil producing countries, OPEC+, has pledged oil output cuts amid flagging global oil prices. Following the announcement made on Sunday (4 June) after a meeting of OPEC+ in Vienna, Brent crude oil rose by as much as 2.4% before settling at around $77 a barrel in Asia trading on Monday. In accordance with the agreement struck, Saudi Arabia announced that they would cut daily barrel production from 10 million barrels per day (bpd) to 9 million bpd in July, as well as extending their volunatary cut in oil production of 500,000 bpd until December 2024. Russia's 2023 quota currently stands at around 10.5 million bpd, but in 2024 will reduce to approximately 9.3 million bpd, consisting of a reduction of 650,000 barrels per day as well as the voluntary cut of 500,000 bpd. Brent crude oil rose by as much as 2.4% before settling at around $77 a barrel. Global oil prices spiked following Russia's full-scale invasion of Ukraine in February 2022. Since then, however, prices have fallen to pre-February 2022 levels. In an attempt to shore up global oil markets, OPEC+ have announced a couple of rounds of cuts in oil production. In October 2022, OPEC+ agreed to cut production by two million bpd, about 2% of global demand.