GULF WEEKLY: Hormuz transits and East-West flows pick up, Saudi pre-budget statement, Qatar’s GDP contracts by -15%

GULF COUNTRIES - Report 02 Oct 2026 by Justin Alexander

A skimmable summary overlaid with our analysis and links. Headlines:

* Ongoing Qatari mediation produced a new proposal but has not yet bridged the US-Iran differences.
* Trump has ordered a third aircraft carrier to the region, adding to fears of a post-election escalation.
* Oil and LNG Hormuz transits picked up sharply in September, despite attacks, including five this week.
* The East-West pipeline is already back to about 6m b/d capacity, although the Houthi threat remains.
* MBS received the UAE’s VP Sheikh Mansour, in a signal of efforts at UAE-Saudi rapprochement.
* The Saudi finance ministry forecasts a -3.6% GDP decline this year, sharper than rating agencies.
* It projects the fiscal deficit at -5% of GDP, with spending 9% above budget, and plans -3.5% of GDP in 2027.
* The Saudi current account fell back into a deficit in Q2, at -2.8% of GDP, on weaker oil exports.
* Abu Dhabi’s manufacturing index contracted by -22% q/q in Q2, led down by chemicals and metals.
* Passengers thwarted the hijack of a flydubai flight to Israel. Netanyahu earlier visited Abu Dhabi.
* The Premier League ruled that UAE-owned Manchester City breached financial fairness rules.
* Qatar’s GDP contracted by 14.7% in Q2, with a 51% oil contraction but resilient 2.6% non-oil growth.
* Qatar’s inflation jumped sharply, to 3.9% in July, the second-highest in the Gulf, and was rebased.
* Kuwait’s oil output reportedly fell by -10% in September, and it has suffered several tanker attacks.
* S&P affirmed Oman at BBB- and raised its forecast for the fiscal surplus to 4.8% of GDP.
* Bahrain’s Q2 current account surplus crashed to 0.3% of GDP, and there were record portfolio outflows.
* There was an encouraging surge in foreign card transactions in Bahrain by 49% m/m in August.
* Databank updates: Saudi fiscal, Qatar GDP, Saudi and Bahrain BoP, Qatar and Bahrain inflation. Oman, UAE and Saudi forecasts.

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