January
Saudi Arabia and UAE launch VAT

The UAE and Saudi Arabia became the first GCC states to introduce VAT on a wide range of products and services on 1 January as Gulf states sought to mitigate the impact of lower oil prices and diversify their economies. The rest of the GCC is expected to introduce VAT over the coming two years. On 6 January, after Saudi citizens voiced concerns, King Salman ordered bonus payments and allowances to civil servants and military personnel.

Aramco becomes joint stock company in move towards IPO

Riyadh changed the status of Saudi Aramco to a joint stock company, in apparent preparation for its planned 5 per cent initial public offering (IPO).

Tadawul announces reforms

Saudi Arabia’s bourse rolled out market enhancements as part of Riyadh’s drive to attract international investors.

UAE’s Adnoc awards feed contracts for offshore gas megaproject

The US’ Bechtel won the front-end engineering and design (feed) contract for the Hail and Ghasha fields. France’s TechnipFMC won the Dalma feed deal.

Turkey makes incursion into Syria

Turkey, led by President Recep Tayyip Erdogan, announced the beginning of a military offensive to capture a portion of northern Syria from Kurdish forces.

February
Donors pledge $30bn for Iraqi economy at Kuwait summit

The Iraqi government received pledges estimated to reach $30bn to help with the country’s reconstruction in the aftermath of the war with radical militants.

Kuwait prioritises infrastructure

Kuwait announced it expected to allocate KD2.5bn ($8.3bn) of its 2018-19 budget to the development of infrastructure, road networks, building the new airport and power generation.

Riyadh receives $107bn from corruption crackdown

Riyadh claims receipt of an estimated SR400bn ($107bn) in settlements from the individuals accused of corruption and detained at the Ritz-Carlton hotel in Riyadh.

Acwa Power wins Saudi Arabia’s first major solar project

Local utilities developer Acwa Power was awarded the contract to develop Saudi Arabia’s first major renewable energy project.

March
Riyadh and UK negotiate terms of $13.8bn defence deal

Saudi Arabia’s Crown Prince and Defence Minister Mohammed bin Salman signed a memorandum of intent to procure 48 Typhoon fighter jets from UK-based firm BAE Systems.

Contractors selected to build Dubai’s Expo 2020 pavilions

The local ASGC was awarded the contract to build the Expo 2020’s Sustainability Pavilion, while local firm Alec won the contract for the construction of the Mobility Pavilion.

US raises the trade war spectre with metal tariffs

President Donald Trump’s imposition of 25 per cent and 10 per cent tariffs on steel and aluminium imports, respectively, ignited fears that retaliation by China or the EU could spark a trade war.

April
Egyptian President Al-Sisi secures expected second term

The results of Egypt’s presidential elections in late March were announced on 2 April, confirming a second term for President Abdul Fattah al-Sisi, with 97 per cent of the vote.

Retaliatory military strikes launched against Assad regime

The US, UK and France ordered the bombing of Syrian military bases on 14 April in response to the sarin attack allegedly by the Bashar al-Assad regime on civilians in Ghouta, a Damascus suburb, a week previously.

Saudi Arabians head to cinemas after nearly 40 years

The Hollywood blockbuster Black Panther made history on 18 April when it became the first film to be screened in a public cinema in Saudi Arabia since 1983.

Oil prices hit new high

Brent crude prices spiked 2.6 per cent to reach $73.93 a barrel on
18 April due to fears that US military action in Syria could prompt further regional, or even global, instability.

May
US withdraws from Iran nuclear deal and reimposes sanctions

On 8 May, President Donald Trump announced the withdrawal of the US from the Iran nuclear deal, which was signed in January 2015 by the five permanent members of the UN Security Council plus Germany and Iran. Trump declared that the full weight of US sanctions would be reimposed.

US relocates embassy to Jerusalem

The US relocated its embassy in Tel-Aviv to Jerusalem, 23 years after the signing by the US Congress of Jerusalem Embassy Act of 1995, breaking decades of convention by US presidents.

Hezbollah makes gains in Lebanon

Shia Islamic group Hezbollah and its political allies made gains in Lebanon’s first parliamentary poll in nine years, winning more than half of the seats in the 6 May ballot.

Kuwait approves wastewater and solid waste PPP projects

Kuwait’s Council of Ministers approved the recommendation for the contract awards for the planned Umm al-Hayman wastewater and Kabd solid waste public-private partnership projects.

June
Riyadh issues the kingdom’s first driving licences for women

Saudi Arabia issued its first driving licences for women, following the lifting of the ban on female drivers on 24 June. A study by global market research and consulting firm Ipsos found that 70 per cent of women in Saudi Arabia were likely to choose to drive.

MSCI upgrades Saudi Arabia to Emerging Market status

MSCI upgraded Saudi Arabia to Emerging Market status from its previous classification of Standalone Market in its Annual Market Classification Review.

UAE to allow full foreign ownership

UAE Vice-President, Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum announced plans on Twitter to allow 100 per cent foreign ownership of companies and 10-year visas for certain highly qualified professionals and investors.

Gulf countries pledge financial aid package for Jordan

Saudi Arabia, Kuwait and the UAE pledged $2.5bn in financial aid to Jordan over the next five years.

July
Saudi Arabia releases draft public-private partnership law

The kingdom’s National Centre for Privatisation issued a 50-page draft law outlining partnerships between the government and the private sector. The law is expected to unlock SR35bn-40bn ($9.3bn-10.7bn) from selling government assets and create 10,000-12,000 private sector jobs.

Total leaves Iran after failing to secure US sanctions waiver

French energy giant Total quit its business in Iran after failing to negotiate a waiver deal with the US that would have exempted it from impending sanctions and allowed it to continue business with Tehran.

Russia on shortlist for Saudi Arabia’s first nuclear power project

Russian state nuclear company Rosatom was reported to have been shortlisted to participate in the tender for Saudi Arabia’s first nuclear power plant.

August
Bids submitted for $1.5bn upstream project in the UAE

Commercial bids from five contractors were submitted for the contract for Adnoc Onshore’s Bu Hasa integrated field development project. MEED Projects estimated that the project was worth approximately $1.5bn. The scheme was tendered in November 2017.

Saudi Aramco considers bond sale to fund Sabic acquisition

Saudi Aramco was reported to be considering tapping the international bond market for the first time to finance the acquisition of petrochemicals giant Saudi Basic Industries Corporation (Sabic).

Economic sanctions on Iran restart

The US reimposed limited currency and industrial sanctions on Iran.

Oman completes gas appraisal

Petroleum Development Oman completed appraisal work on the gas discovery it announced in March.

September
Saudi Arabia completes $1.1bn sukuk issuance

The kingdom’s Finance Ministry announced that it had completed an issuance worth SR4bn ($1.1bn) under the government’s Saudi riyal-denominated sukuk programme.

Prequalification starts for multibillion-dollar airport deal

Dubai Aviation Engineering Projects (DAEP) received prequalification documents for the estimated AED10bn ($2.7bn) contract to build the substructure for Concourse 1 and the West Terminal building at Al-Maktoum International airport. DAEP was also prequalifying firms for design and supervision consultancy services.

Saudi Arabia’s Public Investment Fund closes $11bn loan

The kingdom’s Public Investment Fund (PIF) completed an $11bn international syndicated loan on 17 September, marking its first borrowing. PIF said the loan was the “first step in its strategic, medium-term debt funding programme”.

October
Death of Saudi journalist results in diplomatic crisis for the kingdom

Reports emerge of the death of Washington Post journalist Jamal Khashoggi inside Saudi Arabia’s consulate in Istanbul on 2 October, triggering a diplomatic crisis for the kingdom.

Riyadh asserts Khashoggi killing was ‘rogue’ operation

Riyadh said on 21 October that Saudi journalist Jamal Khashoggi was killed in a rogue operation by officers operating without the knowledge of the royal court.

Kuwait to borrow $52bn to finance new oil projects

Kuwait Petroleum Corporation (KPC) was reported to be looking to borrow KD16bn ($52.7bn) to finance its capital spending programme over the next five years. KPC plans to boost Kuwait’s oil production capacity to 4.75 million barrels a day (b/d) by 2040, up from 3.2 million b/d, and expand its downstream refining industry.

IMF predicts Saudi Arabia’s economy will grow in 2018

The IMF upgraded its growth forecasts for Saudi Arabia, despite downgrades to the overall projections for the Middle East and the rest of the world. The IMF announced it expects the Saudi economy to grow 2.2 per cent in 2018 and 2.4 per cent in 2019, with improvement “driven by a pickup in non-oil economic activity and a projected increase in crude oil production in line with the revised Opec Plus agreement”.

Consultancy team submits lowest bid for Dubai Metro extension

A team comprising UK-based firms Atkins and Grimshaw, the US’ Parsons and France’s Egis submitted the lowest bid for the study and design of extensions to the Green and Red lines of the Dubai Metro.

Riyadh’s Public Investment Fund announces new Red Sea project

Saudi Arabia’s PIF released details of plans to build a high-end tourism destination on the northern Red Sea coast. Known as Amaala, the project will be developed on three sites between Dibha and Alwajh.

November
US grants allies six-month waiver from Iran oil sanctions

Following the reimposition of oil sanctions on Iran on 5 November, the US government produced a temporary waiver allowing eight countries to continue importing Iranian petroleum products for a six-month period. The list of countries included US allies Turkey, Italy, India, Japan and South Korea.

Riyadh to revisit Aramco IPO in 2021

Saudi Aramco CEO Amin Nasser said the kingdom would reconsider part-privatising Saudi Aramco after the state energy giant completes its acquisition of a majority stake in petrochemicals and metals producer Sabic.

Chinese firm to implement Saudi Landbridge project

Saudi Railway Company signed a memorandum of understanding with China Civil Engineering Construction Company to implement the Saudi Landbridge project on the first day of the Future Investment Initiative in Riyadh.

Kuwait to spend $25bn on new downstream projects

State-refiner Kuwait National Petroleum Company announced plans to spend $25bn on new downstream projects over the next 20 years.

December
Malaysian energy firm signs long-term agreement for Aramco work

Malaysia’s Sapura Energy announced that its subsidiaries Sapura Fabrication and Sapura Saudi Arabia had been selected by Saudi Aramco to become part of its long-term agreements pool of offshore contractors.

Opec-plus deal fails to raise crude oil prices

The oil production cut agreement reached in Vienna on 6-7 December by members of Saudi Arabia-led oil producers’ group Opec and 11 of its allies, headed by Russia, has yet to deliver a significant improvement to crude prices.

Warring parties agree to UN-brokered truce agreement

The Saudi-led Arab coalition and Houthis have agreed to a ceasefire in Yemen during UN-led talks held in Sweden. The ceasefire covers the Red Sea port city of Hudaydah, and includes other measures aimed at ending fighting in the country and relieving the humanitarian crisis.