AGP Executive Report

Mecca Defense Pact: Saudi Arabia, Türkiye and Pakistan signed the “Mecca Joint Defence Agreement,” pledging that an attack on one will be treated as an attack on all, raising questions about how far the commitment could pull them into future crises as Iran-war fallout deepens. Iran-US Tensions & Hormuz: Iran and Oman discussed a framework to reopen Strait of Hormuz with agreed passage coordinates, while shipping and energy markets stayed jittery; ADNOC said at least 15 of its ships have been attacked in the strait since the conflict began. Gaza Human Toll: UNICEF said at least 300 Palestinian children have been killed in Gaza since the October 2025 ceasefire, warning that promises are not translating into action. Maritime Security: India said 4,052 seafarers were evacuated from the Gulf amid security concerns, and warned companies to apply strict ISPS measures and avoid risky routes. Economic Spillovers: The Middle East conflict is blamed for weaker growth and tighter finances in parts of the region, including a Philippines slowdown and reduced MSME lending, while fuel prices there may see rollbacks if oil volatility eases. Energy Diversification: India’s LPG supply shifted as the US became its biggest LPG source after Hormuz disruptions, with domestic production ramped up to protect consumers.

Mecca Joint Defence Pact: Saudi Arabia, Türkiye and Pakistan signed the “Mecca Joint Defence Agreement,” with a mutual-defense clause saying an attack on one is an attack on all, as the region faces rising Iran-linked and Houthi-related threats. Saudi Security Warning: Saudi officials said an attack in Najran wounded 11 civilians and warned of possible coordinated strikes on civilian infrastructure, including energy sites, ports and airports. Hormuz Diplomacy Pressure: Talks to reopen the Strait of Hormuz are framed as close but politically hard, with Iran and the U.S. still divided over control of the waterway. Markets & Costs: Dubai stocks edged up while Abu Dhabi slipped as investors stayed cautious on renewed Middle East escalation; in parallel, easing tensions are expected to bring diesel and gasoline rollbacks of about P5 per liter in the Philippines. Energy Supply Shifts: China’s Sinopec increased purchases of Russian oil to offset reduced Middle East supplies, highlighting how the conflict is reshaping global refining flows. Local Flashpoint: Israeli settlers attacked a Bedouin community east of al-Taybeh near Ramallah, injuring a foreign activist and escalating violence in the West Bank.

Yemen War Escalation: Iran-backed Houthis launched missile and drone attacks that killed at least 58 Saudi-backed Yemeni government troops, with Saudi officials also reporting civilian injuries in Najran. Strait of Hormuz Diplomacy: Iran and Oman reportedly agreed on outlines for a 60-day reopening of the Strait of Hormuz, with routes split near Iran and Oman and no transit fees—though Iran says insecurity factors remain. US-Iran Standoff: Trump said the war with Iran “has got to end pretty soon,” called the strait “sort of open,” and reiterated claims about US missile supply while analysts warn any exit is a “menu of bad options.” Regional Energy Threats: Iran warned Gulf states that any new US attack would be met with strikes on regional energy infrastructure. Markets & Shipping: Oil rose on renewed Hormuz-deal hopes but uncertainty persists; global shipping groups urged the UN and IMO to oppose proposed Strait of Hormuz transit fees. Business & Trade: Pakistan’s trade deficit widened over 25% to $3.95bn in July as imports rose, with energy prices tied to Middle East tensions driving the bill.

Hormuz Diplomacy: Iran and Oman are nearing a deal to reopen Strait of Hormuz shipping by splitting control into two lanes, with Tehran pushing for a northern route under its supervision and Muscat overseeing the southern part—an effort that could ease months of disruption but leaves sovereignty disputes unresolved. Energy Shockwaves: Crude prices rose as Iran warned Gulf states over attacks, while markets tracked the risk of renewed escalation that could tighten supply through the chokepoint. Regional Aviation Moves: Etihad and Qatar Airways plan to resume daily flights to Bahrain and Kuwait from Aug. 8 after weeks of suspension tied to regional tensions, while Emirates keeps Florida cuts and still pauses Bahrain/Kuwait services. Kuwait-Iran Fallout: Kuwait ordered the closure of the country’s only Iranian private school, suspending new admissions for the coming academic year. Iraq Security Policy: Iraq’s State Administration Coalition reiterated that after Sept. 30 all weapons must remain under state control, warning armed activity outside government authority will be treated under anti-terrorism law. Business/Markets: Turkish Airlines reported $197m Q2 profit, citing capacity management and cargo strength despite Middle East disruptions.

Red Sea Energy Shock: Oil jumped back above $80 after Houthi claims of an attack on a Saudi tanker, reviving fears for Red Sea shipping and Middle East supply routes. Hormuz Deal Watch: Iran says it has made a breakthrough with Oman on a new Hormuz shipping route, while markets also weigh US-Iran talks and the risk of renewed disruption. Oman Environmental Risk: NGOs warn a Russian “shadow fleet” tanker is leaking near Oman’s nature reserve, with satellite imagery showing an expanding slick and fears of a long, severe spill. US Sanctions Update: The US delisted an Iraqi IRGC-linked airline (Fly Baghdad) from OFAC’s SDN list after a review, while keeping the CEO sanctioned and noting sanctions could return. Fed Inflation Pressure: Fed Governor Lisa Cook told Anchorage she’s ready to raise rates if inflation stays “too high,” as Middle East conflict and energy shocks remain a key variable. Regional Diplomacy: R-4 foreign ministers (Egypt, Pakistan, Saudi Arabia, Türkiye) reaffirmed support for a two-state solution for Palestinians in Amman. Security Readiness: Reports say US air-defense interceptors are heavily depleted, raising Gulf allies’ concerns about coverage for potential Iranian retaliation.

Israel-Hezbollah: UN says 821,077 people have started returning to homes in Lebanon after a lull, while 360,000+ remain displaced as US-sponsored talks in Rome run until Thursday. Gaza Diplomacy: Hamas official Basem Naim says the group is still waiting for Nikolay Mladenov’s response on the Phase 2 roadmap, warning against “procrastination and escalation.” Hormuz Watch: US, Iran and Oman signal progress toward an interim Strait of Hormuz deal, but terms stay unclear as shipping security remains fragile. Red Sea Pressure: Oil markets steadied after a two-day slide as Houthi claims of attacks on Saudi shipping revived risk. Energy & Trade: Reports say ship traffic through Hormuz and Bab el-Mandeb stayed almost stable, even as the wider crisis keeps global costs jittery. Humanitarian Fallout: UN/WFP warns El Niño could push 49 million more into acute food insecurity by next year. Local Impact: Iraq may delay July public salaries if Hormuz disruptions keep squeezing oil revenue.

Strait of Hormuz Diplomacy: Iran and Oman say they’re making progress on a plan to reopen the Strait of Hormuz, with ships entering via an Iranian-controlled route and exiting via an Oman-controlled one—though any final deal appears tied to the U.S. lifting its blockade on Iran’s ports. Markets & Energy: Optimism around a possible interim Hormuz arrangement helped push Wall Street to record highs while oil slid as Brent dipped below $80; currency traders also pointed to easing Middle East risk. Shipping & Security: Despite the talks, the strait remains dangerous, with reports of continued attacks on vessels and ongoing disruption to regional maritime traffic. Economic Spillovers: The Middle East crisis is feeding into higher energy and fertilizer costs, worsening food-security risks across Asia as El Niño threatens drier conditions. Corporate Impact: Refiners and energy firms are seeing mixed effects—Petron reported lower profits as war-driven costs rose, while Suncor and other producers benefited from stronger crude and refining margins. Social & Tech Notes: QNB partnered with Qatar’s Autism Parents Platform to support inclusion efforts, while Naver is pushing robot services into Saudi Arabia’s smart-city plans.

Hormuz Diplomacy Watch: US Treasury Secretary Scott Bessent said Washington could reach a deal with Iran “today or tomorrow” to reopen the Strait of Hormuz, while Qatar says mediation efforts are still ongoing and draft proposals are circulating. Shipping & Security: Transit remains subdued, with only nine ships reported passing Hormuz on Monday and a vessel coming under fire near Oman, keeping insurers and traders on edge. Energy Prices: Oil slid about 4% to a three-week low as hopes of de-escalation grew, but analysts warn renewed strikes could quickly push fuel costs higher again. Kuwait’s Workaround: Kuwait is discussing a multi-country crude pipeline to bypass Hormuz, linking options via Saudi Arabia to Red Sea or Oman routes, or directly to Fujairah. Iraq Power Supply: Dana Gas and Crescent Petroleum began gas deliveries from the Khor Mor field to Iraq’s Ministry of Electricity, aiming to support Kirkuk power generation. Lebanon Politics: Hezbollah leader Naim Qassem threatened action against supporters of dialogue with Israel and urged Lebanon to restore internal unity and sovereignty. Cyber Risk: IBM put the average 2026 data breach cost in the Middle East at $8 million, with AI-enabled attacks driving up losses.

Strait of Hormuz Tensions: A projectile hit a freighter near Oman in the Strait of Hormuz; UKMTO says the origin is unclear and urges vessels to stay alert, coming after a similar “incident” reported nearby. US-Iran Diplomacy vs. Threats: Trump says talks with Iran are under way and calls it Tehran’s “last chance,” while Iran denies direct US negotiations and says only discussions with Oman on Strait management are progressing. Shipping and Energy Pressure: Gold steadied as traders watched Hormuz talks; oil prices held after earlier slides, with both sides signaling negotiations to restore shipping are ongoing. Regional Security Industry: The Pentagon signed a framework deal to boost Patriot and THAAD missile production, citing pressure on US stockpiles amid Middle East conflicts. Markets React to De-escalation: Tokyo opened mixed as crude fell on peace hopes, while yen intervention concerns lingered; Asian equities broadly rose as oil eased. Cost of Living Fallout: South Africa announced fuel-price adjustments effective 5 August, citing Brent moves and supply constraints tied to global conflicts, while Ghana ordered a diesel margin cut to cushion consumers. Cyber and Business Risk: IBM says average data breach costs in the Middle East hit $8m in 2026, as AI-enabled attacks raise stakes for firms operating across the region.

Iran-US Diplomacy: Trump says new talks to wind down the Iran war start Monday afternoon, after he called off a “massive attack” urged by Gulf allies; Iran’s state media denies direct negotiations, while Tehran says it’s discussing shipping arrangements with Oman. Markets & Energy: Oil slid more than 6% on de-escalation hopes, lifting stocks and easing yields; the Strait of Hormuz remains the key pressure point for trade and energy flows. Gaza & Regional Fallout: Israel struck Gaza over the weekend as hospitals reported deaths, while Turkey accused Netanyahu’s government of undermining peace efforts. Cyber & Business Impact: IBM put the average Middle East data-breach cost at $8m in 2026, with AI-enabled attacks rising; South African factory sentiment also fell on war-fear demand worries. UAE-UK Trade: UAE and UK officials discussed expanding non-oil trade and investment links, with UAE non-oil now ~80% of the economy. Industry & Travel: Marriott flagged a sharp Middle East revenue drop even as global results held up; Trenchless Middle East heads to Riyadh in December.

US-Iran Diplomacy: Trump says the US will pause major strikes if a rapid deal is reached to curb Iran’s nuclear activity and reopen the Strait of Hormuz; Iran says talks with Oman are nearing completion, while markets react to the easing risk. Strait of Hormuz Tensions: UKMTO reports a new explosion near a tanker off Oman, with crews safe, as shipping remains sensitive to any change in passage status. Oil & Markets: Brent and WTI slide on hopes of peace, but volatility stays high; OPEC+ also approved a September rollback of “voluntary” cuts (~188,000 bpd) even as Hormuz disruption risk lingers. Gaza Developments: Gaza hospitals report 17 deaths in Israeli strikes, even after Trump’s announcement that Hamas agreed to disarm and Israel would halt attacks and withdraw—skepticism remains. Regional Security Posture: Gulf allies are reportedly pressing Washington for stronger air-defense guarantees as the standoff continues. Travel & Travel Docs: VFS Global reiterates it only handles visa intake/biometrics, not approvals, and highlights anti-fraud safeguards amid rising demand. Local Fallout: Australia’s fuel excise discount ends, pushing petrol above $2 a litre and triggering warnings of possible price gouging.

Iran-US Crisis & De-escalation: Trump says he canceled planned U.S.-Israel strikes on Iran, tying any pause to a “rapid deal” that would reopen the Strait of Hormuz; Iran rejects claims of an agreement and says the strait remains closed, while Tehran warns it will respond “decisively and proportionately.” Regional Diplomacy: Saudi Crown Prince MBS urged Trump to prioritize dialogue and avoid wider conflict, after calls involving Iran, Saudi, Pakistan and Türkiye. Public Safety Warnings: U.S. embassies across the Middle East urged Americans to “consider departing” or be ready to leave amid “unforeseen escalation,” warning of possible flight cancellations and airspace closures. Gaza & Israel Fallout: Israeli strikes in Gaza continued as U.S. political support for Israel shows strain inside Democratic ranks. Energy Shock Watch: Europe faces a winter gas squeeze as Hormuz tensions disrupt shipments; OPEC+ agreed in principle to a small September quota hike, while markets track oil price swings. Aviation & Business Notes: Bahrain Airport appoints Ahmed Janahi as CEO; new direct flights from India expand connectivity.

US-Iran Escalation: The US State Department and multiple embassies across the Middle East urged Americans to “consider departing” or be ready for rapid evacuation as Iran warns of decisive retaliation and the Strait of Hormuz remains a flashpoint. Regional Security Alerts: Advisories cited possible flight cancellations, temporary airspace closures, and wider targeting of US interests abroad, with Iran described as “unpredictable.” Energy & Shipping Pressure: Iran threatened to tighten blockade measures and warned energy sites could be targeted if strikes expand, while Kuwait reported destroying hostile drones and shipping risks kept markets on edge. Gaza Diplomacy Under Strain: Hamas signaled readiness to begin disarmament under a US-brokered ceasefire framework, but analysts flagged major hurdles—especially verification and Israeli withdrawal conditions. Saudi-Houthi Front: Reports say Saudi Arabia is preparing a major push against the Iran-backed Houthis to protect Red Sea shipping lanes. Markets & Costs: Oil prices stayed elevated on conflict fears, feeding into fuel-price pressure and broader inflation worries.

US-Iran Escalation: The US warned Americans in Israel, Iraq and Jordan to consider leaving or be ready to depart as Iran is described as “unpredictable,” with possible missile/drone attacks, flight cancellations and airspace closures. Kuwait on Alert: Kuwait said it intercepted multiple Iranian drones targeting “vital” installations and hit civilian vehicles on Bubiyan Island, with debris causing damage but no casualties. Lebanon-Israel Tensions: Lebanon’s President Joseph Aoun condemned Israeli blasts near the Beaufort castle as a “direct threat” to a recent deal, while Israel said it destroyed Hezbollah “terror tunnels” using about 700 tonnes of explosives. Strait of Hormuz Risk: A tanker carrying LNG was reportedly struck near the Strait of Hormuz as Washington pushes to reopen the waterway; Iran has not claimed responsibility. Gaza Deal Hurdles: Trump called the Gaza disarmament roadmap a “big step,” but both Hamas and Israel signaled major obstacles remain. Energy Markets: Oil prices rose on Middle East developments, underscoring how quickly the region’s conflict is feeding into global supply fears.

Gaza Ceasefire Talks: Hamas says it has agreed to disarm under a Trump-brokered roadmap, including handing weapons to a Palestinian governing committee and a gradual Israeli withdrawal—while Israel has not confirmed withdrawal unless disarmament is “genuine,” leaving key hurdles ahead. Iran Pressure & Strikes: The White House signals Trump is weighing fresh major strikes on Iran as it presses for Strait of Hormuz reopening; Iran’s Revolutionary Guard claims attacks on tankers, and oil markets react to renewed escalation fears. Regional Security Shift: Saudi Arabia joins US strikes on Iran-backed militias in Iraq for the first time since the war began, marking a move from restraint to retaliation. Shipping & Energy Costs: UN chief Guterres calls for an end to fighting and full restoration of navigation rights around Hormuz and Bab el-Mandeb; meanwhile, Red Sea security worries keep logistics firms like Ethiopia’s ESL rerouting or adding feeder services. Markets & Daily Pressure: Oil prices swing with the conflict; in the Philippines, investors cite Middle East tensions and record debt as stocks slip, while a Senate bill would cap power rates during emergencies.

Maritime Security: Saudi Arabia is pushing a 14-country maritime alliance to safeguard key shipping and energy routes, as Houthi threats in the Red Sea and pressure around Bab el-Mandeb add to wider Middle East shipping risk. Oil & Prices: Despite renewed fighting, oil markets are balancing higher risk with signs of increased Strait of Hormuz “oil shuttling” flows; Brent slipped to around $88 while still tracking a roughly 20% monthly gain, and UK petrol hit an Iran-war high at 160p/litre. Corporate Impact: Major oil firms posted windfall profits as U.S.-Iran tensions disrupted shipments; Exxon and Chevron results underscored how consumers and airlines absorbed higher fuel costs. Travel Disruption: Travel tech and airlines felt the strain: Amadeus beat profit forecasts but cut its 2026 revenue outlook after Middle East conflict hit bookings and air traffic, while Air France-KLM cargo benefited from reduced capacity and high-tech demand. Human Toll & Economy: India reported 16 nationals killed (including 10 seafarers) and 75 injured; Egypt secured $1.8bn IMF funding, saying it weathered Iran-war fallout better than expected. Diplomacy & Ceasefire: Hamas said it agreed to a staged disarmament roadmap tied to Israel’s withdrawal, but implementation hinges on Israeli compliance. Regional Politics: Iran escalated complaints to Bulgaria over U.S. refueling aircraft basing, warning it could make Bulgaria a party to the conflict.