Happy Monday everyone!

It’s a turbulent start to the week across the Middle East as regional stock markets saw their steepest drop since 2020, rattled by fears of a global trade war and plunging oil prices. Jordan finds itself at the center of the storm, facing a potential economic hit as the region’s most exposed economy to U.S. tariffs. Meanwhile, Dubai is pushing forward with major infrastructure investment, announcing an eight-lane bridge over Dubai Creek to ease congestion and fuel growth.

Let’s dive in!

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Middle East Markets See Biggest Crash Since 2020 Amid Trade War Fears and Oil Price Slump

📰 What is it about?

• Equity markets across the Middle East suffered their steepest drop since 2020 on Sunday, driven by global trade war fears and a collapse in oil prices.

• Saudi Arabia’s benchmark index plunged up to 6.1%, while markets in Qatar and Kuwait dropped more than 5.5%. Egypt also saw a 3.3% drop on Sunday.

• The losses followed a global market rout, triggered by U.S. President Donald Trump’s historic tariff hikes and China’s retaliatory measures, fueling fears of a broader trade war.

• Energy giant Saudi Aramco lost over $90 billion in market value during the selloff.

💡 Why it matters?

• Middle East markets are highly sensitive to global sentiment, and this downturn underscores how trade tensions and commodity volatility ripple through regional economies.

• The 13% plunge in Brent crude last week adds pressure to oil-dependent countries like Saudi Arabia, Iraq, and Kazakhstan, which need prices above $90 per barrel to sustain fiscal balance, according to the IMF.

• A potential prolonged oil slump poses risks to GCC budgets and economic diversification plans, especially Saudi Arabia’s Vision 2030 and its mega-projects.

• “We have seen this correlation in past crises — from the global financial crash to Covid,” said Fadi Arbid of Amwal Capital, highlighting the region’s vulnerability to external shocks.

• Despite the economic strain, Arbid noted the 10% U.S. tariff on GCC exports is unlikely to have a major direct impact, citing strong political ties with Washington.

🔜 What’s next?

• A planned visit to Saudi Arabia by President Trump — potentially his first international trip since returning to office — could shape future U.S.-GCC economic relations.

• Regional investors will closely watch OPEC+ moves and upcoming trade negotiations, as both energy markets and foreign policy decisions will determine near-term market direction.

• Without a rebound in oil prices or resolution to trade tensions, the region’s economic transformation efforts may face delays or budgetary constraints.

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Markets

Jordan Faces Harsh Economic Blow as U.S. Tariffs Hit Region’s Most Exposed Economy

📰 What is it about?

• Jordan, the Middle East’s most export-reliant country on the United States, is facing a significant economic shock due to a new 20% U.S. tariff on its exports.

• Despite a Free Trade Agreement (FTA) in place since 2001, which removed duties in 2010, Washington has imposed tariffs under a new global trade policy announced by President Trump on April 2.

• According to a report by BMI (Fitch Solutions), the tariffs will weigh heavily on Jordan’s economy, with growth projected to slow from 2.2% in 2024 to 2.1% in 2025, and a current account deficit expected to widen to 7.4% of GDP.

• Jordan’s exports to the U.S. account for 6.6% of its GDP and nearly 28.4% of its total exports, including garments, jewelry, fertilizers, and pharmaceuticals.

💡 Why it matters?

• Jordan’s vulnerability to U.S. tariffs is compounded by the recent cut-off of USAID funding earlier this year, adding stress to an aid-dependent economy and hurting support programs for refugees and vulnerable populations.

• Though Jordan’s 20% tariff rate is lower than those for countries like Iraq (39%) and Syria (41%), the kingdom is uniquely exposed due to its deep trade reliance on the U.S.

• The Middle East and North Africa (MENA) region is entering a period of economic uncertainty, with several countries now subject to steep new tariffs:

  • Egypt, Morocco, Lebanon, Gulf nations: 10%,

  • Tunisia: 28%,

  • Algeria: 30%,

  • Libya: 31%.

• The WTO warns the tariffs could shrink global trade by 1% in 2025, reversing earlier projections.

🔜 What’s next?

• The UN and WTO have raised alarms over the “significant trade diversion” and disproportionate impact on low-income and vulnerable economies, calling for urgent international cooperation over confrontation.

• The economic strain on Jordan could derail reforms and projects tied to its long-term economic resilience strategy, unless new trade deals or relief mechanisms are implemented.

• With U.S. trade deficits largely caused by 10 major economies, the UNCTAD urges the U.S. to reconsider tariffs on smaller developing nations like Jordan that bear minimal responsibility for global imbalances.

• For now, Washington’s stance remains firm, but calls for tariff exemptions or revised agreements are expected to intensify in diplomatic channels, especially from the Levant and North Africa.

Dubai to Build Eight-Lane Bridge Over Dubai Creek to Ease Traffic and Support Growth

What is happening?

• Dubai’s Roads and Transport Authority (RTA) has announced a new eight-lane bridge over Dubai Creek, designed to ease traffic congestion between Deira and Bur Dubai.

• The bridge will:

  • Span 1,425 metres, with four lanes in each direction.

  • Connect Infinity Bridge to the Port Rashid Development Area.

  • Cost Dh786 million and support 16,000 vehicles per hour.

  • Include pedestrian and cycling paths with elevator access.

  • Rise 18.5 metres above the creek, with a 75-metre-wide navigational channel for vessels.

• The project also includes 2,000 metres of road extensions to integrate with surrounding areas like Dubai Islands and Bur Dubai.

Why it matters:

• The bridge is part of a larger infrastructure push as Dubai prepares for rapid population growth, targeting 5.8 million residents by 2040 (currently over 3.9 million).

• It reflects the emirate’s commitment to sustainable urban mobility, providing multi-modal transit options (cars, bikes, pedestrians).

• This project supports Dubai’s 2025–2027 budget plan, where 46% of the Dh86.26 billion 2025 spending is allocated to infrastructure, including roads and public transport systems.

• The bridge complements recent projects like the Sheikh Zayed Road-Mall of the Emirates bridge, opened in January, aiming to cut travel times and reduce congestion in key urban zones.

What’s next?

• Construction will begin soon, with timelines to be announced.

• RTA will continue to roll out new projects to match urban expansion, as Dubai gears up for massive economic and population growth over the next 15 years.

• Expect more mobility innovations, road upgrades, and smart infrastructure investments to future-proof the city’s transport system.

🔍In other news…

• Saudi Commerce Minister: Commercial Register, Trade Names Laws to Facilitate Business.

• OPEC Fund approves over US$600 million in new financing to strengthen connectivity, human capital, economic resilience.

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