GCC

Tehran, Iran – Another attempt to clinch a deal between Iran and Oman to restore some traffic to the Strait of Hormuz has been set back by a lack of regional consensus on the future of the waterway.

Officials from Iran, Iraq and the Gulf Cooperation Council (GCC) nations – minus objecting Bahrain – were scheduled to meet in Oman’s port city of Salalah on Monday to confer on new temporary routes in the Strait of Hormuz amid Tehran’s ongoing hot-and-cold war with the United States.

On Sunday night, the region’s officials announced the postponement of the meeting, without giving a new date. None of the stakeholders gave any indication that the postponement was directly linked to recent Houthi and Iraqi militia attacks on Saudi Arabia.

However, Iran’s Ministry of Foreign Affairs said Saudi objection was the reason for the postponement, without providing further details.

US media outlets Axios and CNN reported that Saudi Arabia had submitted amendments to the Iran-Oman proposal for Hormuz because it had concerns that the wording would establish a new status quo which would be unacceptable to Riyadh.

It comes days after Saudi Arabia shut down its critical East-West oil pipeline – the kingdom’s key route for energy exports – after drone attacks in the area originating from Iraq. US President Donald Trump said these attacks were likely conducted at Tehran’s behest.

Saudi Arabia has also faced repeated attacks by the Houthis, who took control of Yemen’s Red Sea coast over the weekend.

Hours after the Salalah meeting was postponed, the Saudi civil defence issued alerts for Abha, Khamis Mushait, Jazan and Najran in southern and western parts of the kingdom. The Houthis claimed to have fired dozens of ballistic missiles and drones at military facilities in Khamis Mushait, in retaliation for air strikes across Yemen, which it blames on Saudi Arabia.

What comes next?

Iran has said it will engage with the US on the future of the Strait of Hormuz and ending the war only if there are tangible moves to lift Washington’s naval blockade on the country and return to the June memorandum of understanding.

With continued disruptions to the passage of vessels through the strait, Iran has signalled that it intends to continue pursuing the bilateral agreement with Oman over Hormuz, which it said was finalised last month.

“In consultation with Oman, in the next step, we will make a decision on how to announce or register the agreement,” Ministry of Foreign Affairs spokesman Esmaeil Baghaei told reporters during a weekly news conference on Monday.

When the two countries initially advanced the bilateral deal, Trump threatened to bomb Oman if it “gets in the way” of US talks with Iran.

Ali Vaez, deputy director of the Middle East and North Africa programme at the Crisis Group, told Al Jazeera that Tehran wants to use its leverage over Hormuz for regional legitimacy – and ultimately to pressure the US.

“The broader the regional buy-in, the harder it becomes for the US to dismiss the arrangement as an Iranian diktat,” he told Al Jazeera.

GCC states, suffering from a sharp decrease in energy receipts, want ships moving and their economies insulated from a war they neither started nor can end. But Vaez said Washington is unlikely to lift the blockade on Iran even if the region blesses the arrangement between Muscat and Tehran.

“[The US] will find it much harder to sustain a policy that its own partners increasingly see as perpetuating the crisis,” Vaez said

Temporary entry and exit

The Omani-Iranian planned agreement envisions temporary entry and exit routes for commercial vessels in the strait, with Tehran repeatedly stating that this would not mean that the Strait of Hormuz has reopened.

Iran and Oman are the only two countries with territorial waters in the Strait of Hormuz. The proposed inbound corridor reportedly goes through Iranian waters, while the outbound corridor mostly passes through Omani waters, with small parts still in Iranian territory.

During Monday’s scheduled meeting, Iran and Oman were supposed to share precise maps and discuss the details of the routes with GCC members Saudi Arabia, the United Arab Emirates, Qatar and Kuwait, and Iraq, which is outside the bloc. The deal could reportedly include voluntary tolls to fund navigation, environmental protection and search-and-rescue operations.

Bahrain, which has borne the brunt of Iranian attacks since the US-Israel war on Iran started at the end of February, said it would not participate in the forum since it would amount to “appeasement”. The Tasnim news outlet, affiliated with Iran’s Islamic Revolutionary Guard Corps (IRGC), claimed Israel pushed Bahrain to refuse participation.

How does Yemen fit in this picture?

The latest diplomatic movement comes after days of explosive developments in Yemen, when the Houthis, officially known as Ansar Allah, essentially took control of the Bab al-Mandeb strait and the Red Sea after a lightning offensive against government forces.

Thomas Juneau, assistant professor in the Graduate School of Public and International Affairs at the University of Ottawa, said the Houthi advances represent a significant gain for Iran. Its Yemeni allies’ position in the Red Sea offers Iran an important new bargaining chip in future negotiations with the US.

“The Houthis are not a simple arm of Iranian foreign policy. They operate largely based on their own interests, and do not take and execute Iranian commands,” he told Al Jazeera. “But Houthi and Iranian interests are largely, if not always fully, aligned. They cooperate closely on the basis of those shared interests.”

Juneau sees the ability for Iran and the Houthis to potentially partially block traffic in the Strait of Hormuz and the Bab al-Mandeb – two of the world’s most crucial maritime bottlenecks – would give them tremendous influence over the global economy, and thus the US.

The Houthis are trying to seize the opportunity to “institutionalise the de facto reality of their veto on maritime traffic” in the southern Red Sea and replicate partial Iranian success in doing the same in the Strait of Hormuz, Juneau said.

Iran has stressed that their allies’ gains in the Red Sea cannot be separated from the Saudi-led blockade and attacks on Houthi areas in Yemen since 2015.

“We know very well that continued war between Islamic countries in the region only has one winner, and that winner is no one but the Zionist regime, which is after persisting tensions and conflict in our region and between Islamic countries,” Iranian spokesperson Baghaei said.

RIYADH: Gulf and Muslim organizations on Saturday condemned a drone attack on Saudi Arabia’s East-West oil pipeline, expressing solidarity with the Kingdom and warning that the strikes represented a dangerous escalation threatening regional security and vital infrastructure.

The Gulf Cooperation Council (GCC), Muslim World League (MWL), Organization of Islamic Cooperation (OIC), Qatar and Bahrain issued statements early Saturday after several drones originating from Iraqi territory targeted the pipeline in the Riyadh and Madinah regions, causing injuries and material damage.

GCC Secretary-General Jasem Mohamed Albudaiwi condemned the attack “in the strongest terms,” describing it as “a dangerous escalation and an unacceptable threat” to Saudi Arabia’s security, territorial integrity and vital installations. He said the attack was also a “flagrant violation” of international law.

Albudaiwi reiterated the GCC’s categorical rejection of actions targeting Saudi Arabia’s security, stability and national assets. He called on the Iraqi government to intensify its efforts and take “necessary, decisive measures” to prevent its territory from being used as a launchpad for attacks, stop such operations and deter their recurrence.

He reaffirmed the GCC’s “complete and steadfast solidarity” with Saudi Arabia and its support for measures the Kingdom takes to protect its security, sovereignty, facilities, citizens and residents.

Qatar likewise condemned the attack “in the strongest terms,” saying the targeting of civilian and economic facilities was a “flagrant violation of international law” and a dangerous escalation that could undermine regional security and stability.

Qatar’s Foreign Ministry commended what it described as Saudi Arabia’s responsible approach in supporting the Iraqi government’s efforts to prevent its territory from being used to launch attacks against Saudi Arabia and neighboring countries. It expressed full solidarity with the Kingdom and support for measures to protect its sovereignty, security and facilities.

Bahrain’s Foreign Ministry also strongly condemned the attack, describing it as a flagrant violation of international law, the UN Charter and the principles of good neighborliness. It said the targeting of vital civilian facilities threatened the security of energy supplies.

Bahrain affirmed its full solidarity with Saudi Arabia, stressing that the Kingdom’s security and stability were “an integral part” of Bahrain’s own security and stability. It also recognized Saudi Arabia’s right to take all necessary measures under international law to protect its sovereignty, security, facilities, citizens and residents, and expressed wishes for a speedy recovery for those injured.

The Bahraini ministry called for preventing the territory of any country from being used as a launching pad for attacks against neighboring states. It voiced support for Iraq’s efforts to prevent a recurrence and urged the international community to assume its responsibilities in confronting attacks aimed at harming energy security and destabilizing regional security and stability.

The Muslim World League also strongly condemned the strikes. Its secretary-general, Sheikh Mohammed bin Abdulkarim Al-Issa, described the attacks as “treacherous criminal attacks” that violate religious values, laws, international norms and humanitarian principles.

Al-Issa said the league, its bodies and global councils, as well as Muslims under its umbrella, stood in full solidarity with Saudi Arabia in measures taken to deter the attackers, preserve its security and sovereignty, and protect citizens and residents.

The OIC also strongly condemned the attack, Al-Ekhbariyah said in a post on X.

Temporary shutdown

The Saudi Energy Ministry said Friday that the pipeline had been temporarily shut down as a precaution after multiple attacks Thursday morning. Several people were injured and received medical treatment, while emergency and specialized technical teams were deployed to secure the pipeline and assess its condition.

The Saudi Foreign Ministry said the drones were launched from Iraq and that Riyadh had decided not to retaliate at this stage following a request from Iraqi Prime Minister Ali Al-Zaidi.

Saudi Arabia said it would give the Iraqi government an opportunity to take the necessary measures to prevent attacks launched from Iraqi territory against the Kingdom and neighboring countries, while reserving the right to take all measures necessary to protect its sovereignty, security, facilities, citizens and residents.

Iraq condemned attacks threatening Saudi security and stability and ordered an urgent investigation into the militia responsible and parties supporting it. Baghdad said its territory and airspace would not be allowed to serve as a launchpad for attacks against any country.

The pipeline shutdown comes as the East-West route has assumed greater importance amid the wider regional conflict and threats to shipping through the Strait of Hormuz. The roughly 1,200-kilometer pipeline carries Saudi crude from fields in the Kingdom’s east to the Red Sea port of Yanbu, providing an alternative route that bypasses Hormuz.

The attack also followed a series of strikes by Iran-backed Houthi forces in Yemen against Saudi civilian and energy infrastructure. Earlier in the week, attacks targeted Abha, Khamis Mushait, Jazan and Najran, causing fires at oil facilities and temporarily disrupting some operations, according to the Saudi Energy Ministry. Those attacks wounded 73 civilians, including women and children.

The latest pipeline attack has heightened concerns over the security of Saudi Arabia’s energy infrastructure at a time when regional hostilities are threatening multiple routes for Gulf oil exports.

RIYADH: Companies listed across the Gulf Cooperation Council posted a record $74.8 billion in net profits in the second quarter of 2026, up 31.3 percent year on year, driven by gains in the energy and banking sectors, according to an analysis.  

In its latest report, Kamco Invest said the rise in net profit also reflected higher average crude oil prices amid the regional geopolitical situation, which more than offset a decline in crude oil exports from the region. 

Compared with the previous three months, net profit of listed companies in the GCC region increased 10 percent. 

The strong figures underscore the resilience of GCC corporates even as geopolitical tensions and regional disruptions continue to weigh on investor sentiment. The gains also highlight the continued importance of energy to Gulf corporate earnings, even as governments pursue economic diversification and non-oil sectors expand.  

In its report, Kamco stated: “At the country level, the increase in profits mainly reflected double-digit y-o-y growth in profits for Kuwait, Saudi Arabia, Abu Dhabi and Oman and 4.9 percent growth in profits for companies listed on Dubai Exchange.  

It added: “On the other hand, Qatari and Bahraini companies reported decline in quarterly profits by 20 percent and 0.4 percent, respectively.” 

Industry observer Tony Hallside, CEO of STP Partners, said the record $74.8 billion profit figure reflected strength beyond the headline number. “Higher oil prices clearly provided a major tailwind, with energy-sector profits rising more than 40 percent, but earnings growth across several other sectors shows that corporate activity remains resilient.”  

He added: “For investors, that breadth is arguably more important than the record number itself.”  

Aggregate revenues for GCC-listed companies rose 17 percent year on year to $381.6 billion in the second quarter and 8.1 percent quarter on quarter. 

Excluding Saudi Aramco, revenue growth for the rest of the region remained in double digits at 11.4 percent. 

Saudi Arabia leads growth 

Saudi-listed companies accounted for the bulk of the gain in the region, with aggregate net profits rising 36.7 percent to $45.3 billion from $33.2 billion a year earlier. 

Energy, banking and materials together made up 92 percent of Saudi earnings in the quarter. 

Saudi Aramco’s net profit increased 42 percent year on year to $32.4 billion, supported by a 19 percent rise in total revenue as realized crude prices climbed from $66.7 a barrel in the second quarter of 2025 to $108.1 a barrel in the second quarter of this year. 

Saudi Arabia’s banking sector net profits increased 8.3 percent to $6.6 billion from $6.1 billion, supported by strong lending growth and resilient operating income. 

Al Rajhi Bank reported $1.9 billion net profit, up from $1.6 billion, driven by a 13.7 percent increase in net income from financing and investments and a 13.3 percent rise in total operating income. 

Saudi National Bank recorded a 7.5 percent increase in net profit to $1.8 billion, mainly supported by a 1.6 percent rise in income from financing and investments. 

“Saudi Arabia remains the earnings engine of the GCC market. Aramco was clearly a major contributor as higher crude prices lifted energy earnings, but the more interesting figure is that Saudi-listed company revenues still grew around 11 percent excluding Aramco,” said Hallside.  

He noted that it points to “broader corporate momentum and gives investors more evidence that the opportunity set in Saudi equities is widening beyond the traditional energy story.”   

Wider regional outlook  

Kuwaiti companies recorded the largest percentage increase, with net profits almost doubling to $3.1 billion, partly reflecting the absence of large losses from discontinued operations that weighed on Agility in the year-earlier quarter. 

Abu Dhabi profits rose 41.8 percent year on year to $14.7 billion. Dubai-listed firms grew 4.9 percent to $6.9 billion. 

Qatari companies saw profits fall 20 percent to $2.9 billion, while Bahraini firms declined 0.4 percent to $572 million. Omani companies rose 24.2 percent to $1.4 billion. 

In the first half of 2026, aggregate net profits for GCC-listed companies rose 23.1 percent, or $26.8 billion, to $142.81 billion. The increase was led by almost 30 percent growth in Abu Dhabi and Saudi Arabia, followed by a 14.6 percent rise in Oman. Kuwaiti and Dubai-listed companies registered high single-digit growth, while Qatar and Bahrain recorded declines of 11.6 percent and 0.2 percent, respectively. 

Sectoral outlook  

Sector performance was mixed but broadly positive. Energy profits jumped 41.6 percent year on year to $36.2 billion in the second quarter. 

Food, beverage and tobacco more than doubled to $3.9 billion. Real estate, materials, capital goods and transportation also posted higher profits. 

Banks reached a record $17.8 billion, up from $16.6 billion, with six of seven country aggregates higher. Telecom recorded modest growth. Utilities, food and staples retailing, and media and entertainment declined. 

“What stands out is the divergence within the GCC. Kuwait, Saudi Arabia, Abu Dhabi and Oman all delivered double-digit profit growth, while Qatar and Bahrain saw declines. That tells investors this remains a market where country and sector selection matters,” said Hallside.  

He noted that banks and telecoms continued to grow, albeit more moderately, while energy, real estate, materials and transportation were stronger. “The GCC cannot be treated as one homogeneous equity market; earnings drivers are becoming increasingly differentiated,” Hallside added.