As Trump lifts Syria sanctions, Gulf states eye return on investment
Welcome back to Al-Monitor Gulf,
This week in the Gulf, all eyes are on Syria as Donald Trump lifts US sanctions in a bid to accelerate its reintegration — opening the door to Gulf-backed recovery plans.
In today’s edition, we unpack how Qatar and Saudi Arabia are positioning themselves as early movers in Syria’s reconstruction, how Kuwait is bracing for a brutal summer with limited grid capacity, and why Saudi Arabia’s $2 trillion Vision 2030 drive is pulling ahead of the regional pack.
All that and more.
Thank you for reading,
Francesco
Leading this week
President Donald Trump holds up an executive order after signing a series of bills during an event in the East Room of the White House, on June 12, 2025, in Washington. — Chip Somodevilla/Getty Images
In a landmark move, US President Donald Trump on June 30 signed an executive order lifting most American sanctions on Syria, potentially accelerating Damascus’ reintegration into the region. The announcement, anticipated since Trump’s May meeting with Syrian President Ahmed al-Sharaa in Saudi Arabia, reflects the White House’s strategy to align Syria’s transition with the broader Abraham Accords framework, Elizabeth Hagedorn notes.
Why it matters: Gulf countries, especially Qatar and Saudi Arabia, have been laying the groundwork for this moment. Reportedly, both states have already paid off Syria’s $15.5 million debt to the World Bank, unlocking eligibility for reconstruction grants. The two also coordinated closely with US Ambassador to Turkey and special envoy for Syria Tom Barrack, who held recent talks in Riyadh aimed at aligning Syria’s recovery with broader Gulf and US interests, as Adam Lucente reports.
Zoom in: Signs of economic momentum are emerging. In late May, Syria signed a $7 billion power generation deal with a Qatari-led consortium. Earlier this month, a delegation from the International Monetary Fund visited Damascus for the first time since 2009. On June 24, Syria’s energy minister held a videoconference with Qatari and Jordanian officials to discuss transporting Qatari gas via Jordan to Syria and potential investment backed by the Qatar Fund for Development.
Despite diplomatic traction, Syria’s challenges remain daunting. At the time of Assad’s fall in December 2024, over 90% of Syrians lived below the poverty line. Reconstruction will cost an estimated $250-400 billion. But for Gulf states, a gradual reintegration of Syria into the international order could help to stabilize a potential investment destination.
Between the lines: The sanctions rollback is widely seen as a US bid to incentivize Syria-Israel normalization — a political win for Washington and possible trigger for broader Arab engagement with Israel. So far, key Arab holdouts like Saudi Arabia have tied any future normalization with Israel to tangible steps toward Palestinian statehood.
What’s next: Israeli Prime Minister Benjamin Netanyahu is expected in Washington next week for further talks. Plus, a Gaza ceasefire and path toward Syria-Israel normalization are now both in play. These are developments that the Gulf capitals will follow closely.
Keep reading:
- Trump signs executive order ending decades-old Syria sanctions
- US envoy, Saudi Arabia coordinate Syria support amid Abraham Accords push
Other top stories
The United Arab Emirates' Foreign Minister Abdullah bin Zayed arrives at the BRICS summit in Kazan on Oct. 23, 2024. (Photo by MAXIM SHEMETOV/POOL/AFP via Getty Images)
🌐 UAE ramps up BRICS coordination ahead of Rio summit
UAE Foreign Minister Sheikh Abdullah bin Zayed chaired the BRICS Steering Committee meeting on June 29, reviewing initiatives across climate, finance, energy and culture. With its first summit as a full BRICS member set for July 6-7 in Brazil, Abu Dhabi is positioning itself as a key Global South voice in shaping multipolar institutions.
☀️ Kuwait’s heat wave stresses fragile power grid
Soaring summer temperatures topping 47 degrees C have pushed Kuwait’s power grid to the brink. With a projected shortfall of 1.6 gigawatts, authorities are racing to add gas-fired capacity and import 800 megawatts from Qatar and Oman. But lingering distrust between Gulf states complicates deeper integration. As peak demand looms, officials face urgent choices between reform, import dependence and sustainability.
👑 Qatar, Spain affirm ties on UN development sidelines
Qatar’s Emir Sheikh Tamim bin Hamad Al Thani met Spain’s King Felipe VI on June 30 in Seville during the UN’s Conference on Financing for Development (FFD4). Their talks focused on bilateral ties and multilateral strategies to close the global development gap. The Emir’s presence — alongside leaders like French President Emmanuel Macron and South African President Cyril Ramaphosa — highlights Doha’s growing interest in shaping the future of international aid and finance.
🎭 Saudi Arabia and China elevate cultural cooperation
As part of the 2025 Saudi-Chinese Cultural Year, Riyadh and Beijing signed an executive program on June 29 to deepen collaboration in heritage, research and education. The deal, inked in Diriyah, underscores Riyadh’s bid to globalize its cultural soft power under Vision 2030 and China’s growing soft power push in the Arab world to strengthen non-Western partnerships beyond traditional trade and energy ties.
Defense brief
An Iraqi air force F-16 fighter aircraft is displayed during an air show at the Balad Air Base north of Baghdad on April 24, 2024, (Photo by AHMAD AL-RUBAYE/AFP via Getty Images)
🇮🇶 Iraq signs $118M deal to maintain F-16 fleet
Iraq has awarded a $118 million contract to US firm V2X (formerly Vectrus, a global player in mission support and AI-integrated systems) to support its F-16 fighter jets, reinforcing the country’s struggling air fleet amid persistent maintenance challenges. Announced on June 30, the five-year deal — part of the US Foreign Military Sales program — covers base operations, logistics and life support at Martyr BG Ali Flaih Air Base in southern Iraq. Baghdad operates 34 F-16C/Ds, which were acquired from Lockheed Martin between 2014 and 2017, but only a handful remain mission-ready after US contractors pulled out in 2020. With this new deal, Iraq hopes to restore combat readiness while deepening ties with American defense firms.
Economic brief
🛢️ Oil prices stabilize as OPEC+ weighs output hike
Brent crude settled around $67.64 per barrel on June 30, down from $80 during the Israel-Iran war. OPEC+ is expected to raise production by 411,000 barrels per day in August, ahead of its July 6 meeting, adding pressure amid weak global demand. May output rose slightly, though gains were curbed by quota-cutting states — both Saudi Arabia and the UAE kept increases below their allowances.
💼 Aramco, ADNOC slow $60B acquisition spree
Saudi Aramco and Abu Dhabi’s ADNOC — among the world’s major crude producers — are scaling back global M&A plans, shifting focus to dividends as oil revenue dips. The two have announced over $60 billion in deals since 2022. Oil's recent slide to $67 per barrel has forced a pause, especially on high-profile gas and petrochemical buys.
📉 Saudi PIF profits plunge 60% in 2024
Saudi Arabia’s Public Investment Fund reported a 2024 profit of $6.9 billion — down from $14.5 billion in 2023 — as soaring inflation, high interest rates and costlier gigaprojects take a toll. Assets rose 18% to $1.15 trillion, but impairments and revised targets at Neom signal growing strain. Despite diversification goals, oil still makes up 60% of government revenue.
💸 UAE fund invests $100M in Trump crypto venture
Abu Dhabi’s Aqua 1 Foundation fund bought $100 million of World Liberty Financial’s $WLFI token, the crypto venture launched by Trump’s family. The non-tradable token grants governance rights and aims to build a blockchain ecosystem. Critics warn of ethical risks amid growing UAE-Trump business links.
☀️ Saudi Arabia’s ACWA Power approves $1.9B rights issue
ACWA shareholders greenlit a 7.1B riyal ($1.9 billion) rights issue on July 1 to fund clean energy expansion across China, Malaysia, Turkey and the Gulf. Of the proceeds, 75% to 85% will support greenfield projects, part of a strategy to triple assets under management by 2030.
Figure of the week: $2 trillion
Gulf states’ Vision 2030 investment push
GCC countries have committed over $2 trillion to Vision 2030 projects, Al Arabiya reports, with Saudi Arabia leading the charge. The kingdom has already met 93% of key performance indicators and completed or launched 85% of its 1,500+ initiatives. From Neom to digital governance, Saudi Arabia is setting the regional pace for economic transformation as the Gulf shifts from oil to knowledge-based growth.