Policy Resilience and Transport Lifelines: Saudi Arabia’s Shield Against the Hormuz Crisis

Saudi Arabia's capital Riyadh (SPA)
Saudi Arabia's capital Riyadh (SPA)
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Policy Resilience and Transport Lifelines: Saudi Arabia’s Shield Against the Hormuz Crisis

Saudi Arabia's capital Riyadh (SPA)
Saudi Arabia's capital Riyadh (SPA)

As the world grapples with unprecedented turbulence fueled by the US-Israeli-Iranian confrontation, and as global supply chains reel from the closure of the Strait of Hormuz, the Saudi economy has emerged as an exceptional model of resilience. This stability is no coincidence; rather, it is the fruit of proactive policies and early investments in diversifying transport arteries and logistics. This strategic integration has allowed the Kingdom to transform its geography from a point of dependency on threatened waterways into an impregnable economic fortress. Through land, sea, and air routes that have become "alternative lifelines," the Kingdom has not only ensured the flow of energy but also secured the region’s needs for food and medicine, cementing its status as a vital logistical hub amidst the surging waves of conflict.

Economic experts believe that the efficacy of Saudi economic policies, coupled with the cultivation of inherent strengths and diverse transport and export options, has contributed significantly to the economy's ability to withstand the repercussions of the ongoing regional conflict.

Policy Efficacy and Strategic Strength

In this context, Fadl bin Saad Al-Buainain, a member of the Shura Council and economic consultant, affirmed that the Saudi economy is characterized by strength, durability, and sustainability. He noted its capacity to adapt to emergency shifts by leveraging its fundamental assets, thereby mitigating the impact of the current crisis despite its high risks.

Al-Buainain emphasized that the sheer depth and scale of the Saudi economy allow it to absorb sudden shocks and even convert them into opportunities to address any emerging shortages. He pointed out that the strategic vision for the oil sector and "qualitative hedging" to ensure supply security have created critical alternatives for oil exports following the closure of the Strait of Hormuz.

According to Al-Buainain, the sustainability of exports has bolstered the reliability of Saudi Aramco and maintained government revenues, while maximizing gains from high oil prices to compensate for any reduction in exported volumes.

Trucks on the highway between Riyadh and Al-Ahsa, about 200 kilometers east of the Saudi capital (AFP)

The Pivotal Role of "Vision 2030"

Al-Buainain underscored the fundamental role of reforms stemming from Saudi Vision 2030 in enhancing economic diversification and strategic hedging across financial and oil sectors. He noted that prudent management, directly overseen by Crown Prince Mohammed bin Salman, served as the first line of defense against the crisis.

He cited S&P Global Ratings' affirmation of the Kingdom’s "A+" credit rating with a "Stable" outlook as the "strongest neutral evidence of economic durability and efficiency." He also highlighted the defensive aspect, stating: "The readiness of the military sectors was the most critical factor in protecting oil installations and achieving economic security," noting that the Kingdom’s Red Sea coastline has been vital in sustaining trade lines and protecting regional commerce.

A Logistical Platform and Humanitarian Responsibility

According to Al-Buainain, the Kingdom has transformed into a global logistics platform, opening its airports and ports as alternatives for neighboring countries. This has guaranteed the sustainability of food and medicine supply chains, providing much-needed stability to Gulf markets. In the energy sector, Saudi Arabia continued to meet customer demands and even offered additional barrels on the spot market, utilizing the East-West Pipeline and overseas storage reserves.

"In the transport and logistics sector, the Kingdom successfully managed the situation of stranded individuals, returning them to their home countries and ensuring the operation of Gulf airlines by opening alternative airports," Al-Buainain added.

He further revealed a massive humanitarian and logistical role played by Saudi ports in the Eastern Province, which provided food, medicine, and fuel to approximately 3,200 stranded ships and 40,000 sailors in the Arabian Gulf following Iranian threats to maritime safety. He stressed that "the Kingdom's humanitarian efforts do not waver, even under the darkest circumstances and in the face of barbaric acts that violate international law."

Stability in the Face of Crisis

For his part, Engineer Abdullah Al-Mobty, Chairman of the Abha Chamber and former Head of the Federation of Saudi Chambers, told Asharq Al-Awsat that the nature of the Saudi economy has made it resilient against the fallout of the US-Israeli-Iranian confrontation. He noted that the Kingdom has shown remarkable stability throughout historical crises thanks to a "clear vision set by the leadership to strengthen the economy through wise methodologies and plans."

Al-Mobty attributed this resilience to Riyadh’s role as a "reliable strategic depth," maintaining the best possible economic position even during a war of this magnitude. He noted that Saudi Arabia views proactive planning and foresight as an integral part of its commitment to the nation and its citizens' interests.

Trucks loaded with goods wait to cross into Qatar at the Salwa border crossing in eastern Saudi Arabia (AFP)

Land Transport Solutions

Al-Mobty emphasized that the Kingdom has never been an advocate of war; instead, its vision focused on creating strategic alternatives. He pointed to the Kingdom's ability to bypass the Strait of Hormuz by pumping crude via the Red Sea and securing the delivery of essential supplies to Gulf states through existing infrastructure.

"One of the immediate results we witnessed was the efficiency of the Saudi land transport sector," Al-Mobty stated. "It responded instantly and with massive capacity to cover the needs of the UAE and neighboring countries, both in passenger transport and securing supply chains. This proved the Kingdom’s success in turning its geographical location into an economic fortress for the region."

The Capacity to Absorb Shocks

Abdullah bin Zaid Al-Mulihi, CEO of Saudi Techno Excellence Company, stressed that the effectiveness of the Kingdom's plans in managing economic, trade, and investment sectors has granted it an exceptional ability to face the massive challenges currently paralyzing global and regional economies.

Al-Mulihi explained to Asharq Al-Awsat that Saudi economic policies are designed with high flexibility to absorb crises, citing the Kingdom's historical resilience during the 2008 global financial crisis. He noted that policies promoting diversification and advanced infrastructure, including land and sea ports, have optimized the Kingdom's unique geography.

"The multiplicity of transport and export options is what achieved this strategic resilience," Al-Mulihi said. He added that the Saudi land transport sector has become the "driving engine" of the region's economy, experiencing a strong boom as it secures the movement of goods and people, particularly to the UAE, reinforcing the sector as a primary pillar in confronting the current crisis.



US Stocks Dip on Mixed Earnings as Markets Monitor Iran

A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York on March 24, 2026.  (Photo by ANGELA WEISS / AFP)
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York on March 24, 2026. (Photo by ANGELA WEISS / AFP)
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US Stocks Dip on Mixed Earnings as Markets Monitor Iran

A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York on March 24, 2026.  (Photo by ANGELA WEISS / AFP)
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York on March 24, 2026. (Photo by ANGELA WEISS / AFP)

Wall Street stocks retreated from records early Thursday as markets digested a trove of mixed earnings reports and monitored the latest dynamics between the United States and Iran.

Analysts cited profit-taking after both the S&P 500 and Nasdaq shrugged off a jump in oil prices to finish at records on Wednesday.

About 10 minutes into trading, the Dow Jones Industrial Average was down 0.4 percent at 49,311.39, AFP reported.

The broad-based S&P 500 dipped 0.2 percent to 7,126.19, while the tech-rich Nasdaq Composite Index declined 0.3 percent to 24,588.07.

David Morrison, senior market analyst at FCA, called Thursday's early trading action "a mild bout of profit-taking triggered by some worrying reports of hostile action between the US and Iran," according to a note.

The US Defense Department said its forces boarded a vessel in the Indian Ocean that was transporting oil from Iran, while President Donald Trump announced on social media that he ordered the Navy to "shoot and kill" boats placing mines in the Strait of Hormuz.

Iran vowed it would keep the strait closed to all but a trickle of approved vessels for as long as the United States blockaded its ports.

Among companies reporting results, Tesla fell 1.7 percent and Lockheed Martin dropped 3.7 percent, while American Airlines jumped 4.9 percent.


What Does the Inclusion of Saudi Bonds in the J.P. Morgan Index Mean?

Saudi woman walks at the Saudi stock market in Riyadh - Reuters
Saudi woman walks at the Saudi stock market in Riyadh - Reuters
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What Does the Inclusion of Saudi Bonds in the J.P. Morgan Index Mean?

Saudi woman walks at the Saudi stock market in Riyadh - Reuters
Saudi woman walks at the Saudi stock market in Riyadh - Reuters

Saudi Arabia’s debt market is set for a strategic shift in early 2027, following J.P. Morgan’s announcement that local-currency bonds will be included in its global emerging markets bond index. The move represents a vote of confidence in the Kingdom’s structural reforms and is expected to open the door to substantial capital inflows that will help finance major economic transformation projects.

In a note, J.P. Morgan said the move follows a series of reforms to improve foreign investor access and enhance local market capabilities.

The bank added that Saudi sukuk, Shariah-compliant debt instruments that function similarly to bonds, with a remaining maturity of up to 15 years, will be eligible for inclusion in the Government Bond Index-Emerging Markets (GBI-EM), the most widely tracked benchmark of its kind, with $233 billion in assets tracking it.

J.P. Morgan said eight sukuk issues would be eligible for inclusion, with a total value of $69 billion.

The Kingdom’s inclusion in the index is expected to boost liquidity and demand for sovereign debt, contributing to lower borrowing costs.

In September, J.P. Morgan had placed Saudi Arabia on “Positive Index Watch,” paving the way for its eventual inclusion in the GBI-EM.

Commenting on the decision, Saudi Finance Minister Mohammed Al-Jadaan told Bloomberg that the move reflects continued confidence in the Kingdom’s economic transformation trajectory. He said the inclusion marks a new milestone in Saudi Arabia’s integration into global financial markets, adding that its immediate impact will be seen in broadening and diversifying the investor base and supporting long-term capital inflows into the domestic debt market, thereby strengthening the resilience and stability of the national economy.

The Significance of the Index

The importance of J.P. Morgan’s index lies in its role as a benchmark guiding major global fund allocations, particularly passive funds that track indices automatically. With an expected weighting of around 2.52 percent, Saudi bonds will become a core component of international investor portfolios, increasing government bond liquidity and reducing borrowing costs over the long term, a critical factor for the Kingdom’s economy.

Passive funds play a key role in ensuring steady inflows. Trillions of dollars globally are managed through such funds. Once Saudi Arabia is included in the index, these funds will purchase Saudi bonds to remain aligned with it. Unlike active investors, they do not rapidly buy or sell based on daily news or market sentiment, but continue to hold bonds as long as they remain in the index, providing significant stability to the Saudi debt market. Their participation also ensures a constant base of large-scale buyers, facilitating bond trading at any time.

Reforms That Paved the Way

This inclusion is the result of a series of regulatory reforms highlighted by the bank in its note. Saudi Arabia has improved international investor access by linking to the global Euroclear system, expanding its network of primary dealers to include international banks, and facilitating cross-border settlement and trading. These measures have enhanced legal certainty and transparency, making the Saudi debt market an attractive and secure destination for foreign capital.

Financial Stability Amid Regional Challenges

Beyond its economic dimensions, the move carries strategic significance amid ongoing geopolitical tensions in the region. Increased inflows into local bonds are expected to strengthen the government’s ability to manage any economic fallout from regional instability. It underscores the resilience and attractiveness of the Saudi economy, demonstrating its capacity to attract quality investment and secure the financing needed for its development plans regardless of external challenges.


S&P Warns African Sovereign Credit Rating Risks Likely to Worsen

Central Bank of Egypt building (A.P.)
Central Bank of Egypt building (A.P.)
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S&P Warns African Sovereign Credit Rating Risks Likely to Worsen

Central Bank of Egypt building (A.P.)
Central Bank of Egypt building (A.P.)

S&P Global Ratings warned on Thursday that the risks to African sovereign credit scores were likely to worsen the longer the Middle East war drags on.

The ratings agency said that higher fuel and fertilizer import costs would increase inflation and fiscal strains for countries, "potentially leading to rating pressure".

Egypt, Mozambique and Rwanda are among the "most exposed" the agency said, although Egypt's deep domestic capital markets and Rwanda's high levels of concessional debt provide some offset, according to Reuters.

Less exposed are net-oil exporters Nigeria, Angola and Congo-Brazzaville as well as Morocco, due to stronger foreign-currency reserves.

S&P's "base case" assumed that the conflict will peak and that the Strait of Hormuz will gradually reopen but related disruptions will likely persist for months. A resumption of hostilities and a more prolonged conflict would present a greater threat to many African sovereigns.

The ratings agency said it expected Africa's borrowing costs to increase due to war's impacts and as a result of global risk aversion.

S&P in recent weeks kept Egypt's credit rating on a "stable" outlook and affirmed ratings for Morocco, Ghana and Mozambique.