Regional Summary
Every Peacemaker’s Other War The most revealing thing about the week was not progress toward an Iran deal but the architecture holding it together — a structure built on states running one track in the open and another out of sight. Pakistan is the starkest case, Saudi Arabia the most consequential, and the gap between what each shows in public and what it does in private is no longer merely diplomatic discretion. It is becoming a liability. Pakistan’s double act was on display. Marco Rubio, the US secretary of state, named it Washington’s chief go-between on Iran, and Field Marshal Asim Munir made his second trip to Tehran in a week, reporting progress toward “a final understanding.” At the same time, Reuters confirmed that Pakistan had deployed a fighter squadron and thousands of troops to Saudi Arabia — the first use of a mutual defence pact with Iran’s principal Gulf adversary. Pakistan was brokering peace between Washington and Tehran while placing forces on the Saudi side of the same conflict. Then, on Eid morning, a Balochistan Liberation Army bomber drove an explosives-laden vehicle into a military shuttle train at Chaman Phatak station, killing at least 24 soldiers and their families returning home for the holiday. Sarfraz Bugti, the Balochistan chief minister, blamed India; the president turned the embarrassment into a victimhood narrative. Both moves have worked before. But the army that cannot protect its own soldiers in Quetta was winning praise that same week for its peace role in Tehran — the contradiction has rarely been this visible, or this widely watched. Saudi Arabia holds the same structure at greater scale. Mohammed bin Salman told the American president to hold off striking Iran, and Faisal bin Farhan, the foreign minister, called counterparts from Cairo to Kathmandu, building support for a Saudi-led calm. None of that prevented Saudi air defences from intercepting three drones from Iraqi airspace on May 17, or Saudi and Kuwaiti forces from striking back inside Iraq against the Iranian-backed militias behind them. Saudi Arabia is the public peacemaker and an active belligerent, keeping one track visible and the other hidden well enough that both audiences are still listening. The week also made clear that money is running short: crude exports fell to their lowest since 2002, the Public Investment Fund’s cash reserves are at a six-year low, and the NEOM population target has collapsed from nine million to 100,000. Mohammed al-Jadaan, the finance minister, called the retreats deliberate. The megaproject fantasy and the peacemaker diplomacy are both about managing appearances as the pressure builds. The UAE showed that restraint, too, can be a second track. After a drone hit the electrical infrastructure at the Barakah nuclear plant — the most provocative single strike of the conflict — Abu Dhabi did not retaliate publicly. It went to the UN Security Council, extracted European condemnations, intercepted six further drones in the following 48 hours, and held its hand. The wording at every turn was precise: the drones were attributed to Iraqi territory and Iran’s militia proxies, not the Iranian state, preserving room for the negotiations the American president described as “largely negotiated” by May 24. The restraint is policy, not passivity. Turkey offers a darker version of the same logic. An Ankara court annulled the Republican People’s Party (CHP) congress on unspecified procedural grounds; riot police enforced the ruling with tear gas and batons within days, triggering a 6% drop on Borsa Istanbul and a record-low lira. When courts have ruled in favour of imprisoned opposition figures, the government has ignored those rulings. The asymmetry is the message. India, meanwhile, is managing rather than choosing: Subrahmanyam Jaishankar, the foreign minister, told Mr Rubio at their joint press conference that India buys energy from whoever sells it cheapest, and that countries other than the United States fit that bill. India’s approach of dealing with all sides — what Washington calls a “trust deficit” — has not changed. If the Iran negotiations close, the visible contradictions will not close with them. Pakistan’s army will still be unable to protect soldiers travelling home for Eid while it brokers great-power peace. Saudi Arabia’s fiscal squeeze and its shadow war will outlast any ceasefire. Turkey’s courts will remain selectively useful to the government. A deal ends the most visible pressure on each of them; it does not repair what is cracking underneath, and what is cracking has been building for longer than this war.Country Summaries
Turkey
Turkey’s government used a court ruling and riot police this week to remove the elected leadership of its main opposition party — an escalation that political scientists call unprecedented since 1946.
An Ankara regional appeals court annulled the Republican People’s Party’s (CHP) November 2023 congress on unspecified procedural grounds, stripping Özgür Özel of the party chairmanship and legally reinstating Kemal Kılıçdaroğlu, who lost to Erdoğan in the 2023 presidential election. The party condemned the ruling as a “judicial coup.” When the Supreme Electoral Council (YSK) rejected the party’s challenge, Mr Kılıçdaroğlu’s lawyers petitioned Ankara police to enforce the transfer. On May 24, riot police entered party headquarters with tear gas and batons, forced evacuation, and escorted Mr Kılıçdaroğlu’s team into the building. Berk Esen, a political scientist at Sabancı University, described the action as “unprecedented in our administrative law and political history — no comparable example in Turkey’s electoral system since 1946.”
Mr Özel, before leaving, tore up the enforcement notice. “Those who want to hand the party over to the Justice and Development Party (AKP) have made us leave,” he said, “but they cannot take our struggle.” He then led a march through rain to the Grand National Assembly, where the party’s parliamentary group elected him as group chair — preserving a foothold in parliament. Ekrem İmamoğlu, the imprisoned Istanbul mayor, called the events a “palace coup” from his cell and appealed for national unity. The DEM Party, a Kurdish-aligned opposition force, visited the party in solidarity. The BBC reported that the party’s social media accounts, Facebook administration rights, and financial accounts were simultaneously disrupted.
This matters not just for its severity but for its asymmetry. When courts have ruled to protect opposition figures — as in the cases of Can Atalay and Osman Kavala — the government has ignored those rulings entirely. A regional appeals court ruling that put government-friendly figures in charge of the opposition was enforced within days by police with batons. The state apparatus enforces the rulings it finds useful.
Markets reacted at once. Within hours of the May 21 ruling, Borsa Istanbul fell 6%, triggering a circuit breaker. The lira touched a record low. The central bank sold an estimated $6-7bn in foreign exchange reserves to stabilise the currency; Mehmet Şimşek, the finance minister, convened an emergency committee; and the Turkey Wealth Fund made large equity purchases to prop up the stock exchange. Cevdet Yılmaz, the vice president, described these as “daily market developments.” JPMorgan and HSBC separately began speculating about an emergency rate hike at the central bank’s June meeting. On the same day as the crisis peaked, Fatih Karahan, the central bank governor, tightened credit growth ceilings on consumer, vehicle, and overdraft loans — tightening, not easing — signalling that his orthodox stance has not buckled under political pressure.
The purpose of the annulment remains contested. Reports from sources close to the governing party suggest Mr Kılıçdaroğlu plans to meet Mr Erdoğan and Devlet Bahçeli, the nationalist coalition partner. No independent corroboration exists, and the reporting comes from pro-government circles. But if accurate, it would suggest the ruling was designed not merely to fracture the party but to install a leadership willing to negotiate with the government — to tame it rather than to break it. Mr Özel’s creation of a parliamentary base means the strategy, if that is what it is, has not yet succeeded.
Turkey’s National Intelligence Organisation, working with Syrian counterparts, captured ten ISIS militants in Syria and brought them to Turkey. Among them was Ömer Deniz Dündar, linked to the October 2015 Ankara train station bombing that killed 103 people; another had served as the group’s intelligence chief for Turkey operations. One suspect requested informant status and gave detailed testimony about his 2014 recruitment in Gaziantep. The outlet Artigercek disputed the “capture” framing, suggesting some detainees may have been handed over by Syrian authorities rather than seized by Turkish operatives — a distinction that matters for gauging how far Turkey can operate independently inside Syria. The operation is the most significant counterterrorism action Turkey has documented this week, but it arrived in a week dominated by events at home.
İbrahim Kalın, the intelligence chief, gave a speech declaring the Kurdistan Workers’ Party peace process on track and Turkey a “global crisis-mediator.” Independent reporting from the previous week put the process near a standstill, stalled by the Iran war. Mr Kalın’s optimism reads as political messaging, not evidence of progress. Hakan Fidan, the foreign minister, whose intensive Iran-war diplomacy the previous week had looked like the start of a sustained campaign, did not reappear on that front. One quiet week does not settle Turkey’s role as broker — the domestic crisis likely occupied the president — but the Iran war will not wait.
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- Turkey’s central bank tightens credit limits and intervenes in currency markets amid political shock — The Central Bank of Turkey lowered credit growth ceilings on May 23 across consumer, vehicle, and overdraft categories as a routine tightening step. Separately, on May 21-22 — the same day as the court ruling against the Republican People’s Party — Borsa Istanbul fell 6%, triggering a circuit breaker, the central bank intervened with an estimated $6-7bn in foreign exchange sales to stabilise the lira, and Mehmet Şimşek, the finance minister, held an emergency committee meeting. Analysts at JPMorgan and HSBC began speculating about a rate hike at the central bank’s June meeting; the Turkey Wealth Fund made large equity purchases to stabilise the stock market.
Notes
Notes
Court ruling ousts CHP leader Özel, police storm party HQ, political crisis escalates across the week
May 18–24, 2026
MİT captures 10 ISIS militants in Syria including Ankara train station bombing suspect; MİT chief Kalın speaks on Turkey's crisis-mediation role
May 22–24, 2026
TCMB tightens credit growth limits and intervenes in currency markets amid political shock
May 22–24, 2026
Saudi Arabia
The American president confirmed this week that Saudi Arabia had talked him out of striking Iran — naming Mohammed bin Salman and the Gulf monarchies as those who asked him to hold off, and putting years of private diplomacy on the presidential record.
He described shelving “a very major attack” on Iran after Gulf allies asked “if we could put it off for two or three days.” Faisal bin Farhan, the foreign minister, welcomed the pause, urged Tehran to act on it, and said Saudi Arabia was “awaiting Iran’s response.” Mr bin Farhan then called counterparts in Egypt, Kuwait, Qatar, Syria, Iran, Portugal, and Nepal, building support for a Saudi-led effort to calm tensions. The Syria call was the most telling: Saudi normalisation of the post-Assad transitional government is advancing quietly, extending Riyadh’s influence into territory Iran once dominated. The week also brought a concrete result: a Gulf Co-operation Council-UK free trade agreement, signed in London by Jassim Al-Budaiwi, the council’s secretary-general, and Chris Bryant, Britain’s trade minister, after four years of negotiations, covering $53 billion in annual trade across goods, services, digital trade, and financial services.
The diplomacy rests on a military build-up proceeding alongside it. Reuters, citing five independent officials, reported that Pakistan has deployed 8,000 troops, a squadron of roughly 16 JF-17 fighters, two drone squadrons, and a Chinese HQ-9 air-defence system to Saudi Arabia under a confidential mutual defence pact signed in September 2025. Saudi Arabia finances the deployment; Pakistan operates the equipment. The pact provides for up to 80,000 Pakistani troops if needed. Pakistan’s defence minister implied it “encompasses all military means” — language pointing toward a nuclear umbrella without confirming one. Saudi Arabia is now the first Arab Gulf state operating under a formal mutual defence arrangement with a nuclear-armed power. The deployment fills gaps Saudi Arabia cannot close on its own: Chinese-origin air defence, jointly manufactured fighter aircraft, and an extended deterrent the US-Saudi relationship has never formally provided.
On May 17th, Saudi air defences intercepted and destroyed three drones entering from Iraqi airspace. The Ministry of Defense warned it reserves “the full right to respond at the appropriate time and place.” Iraq denied knowledge of launches from its territory. Al-Monitor and the Wall Street Journal, drawing on analysis by the Foundation for Defense of Democracies, confirmed that Iranian-backed Shia militias based in Iraq are behind the bulk of attacks on Saudi Arabia and Kuwait, and that both countries have conducted multiple counter-strikes inside Iraq. A separate drone attack on the UAE’s Barakah nuclear plant on May 19th was also traced to Iraq. Saudi Arabia is at once the public peacemaker and an active belligerent — a position it holds by keeping one track in plain sight and the other hidden.
NEOM formally halted The Line until at least 2030, postponed the Trojena ski resort — scheduled to host the 2029 Asian Winter Games — and cancelled the €1.4 billion Webuild high-speed rail contract, the company’s second NEOM cancellation in two months. The Line’s population target has collapsed from 9 million to 100,000. Mohammed al-Jadaan, the finance minister, offered this gloss on the reversals: “if we announce something and we need to adjust it… or cancel it, we will without blinking” — the highest-level acknowledgment yet that cutting back the megaprojects is deliberate policy. NEOM will redirect roughly $3 billion to developing Oxagon as a port and data-centre hub: the real value of a Red Sea coastal position once the grand schemes are cut away.
The fiscal pressure shows up in the numbers. Joint Organisations Data Initiative data confirmed Saudi crude exports fell to 4.974 million barrels a day in March — the lowest since the series began in January 2002 — even as the East-West pipeline ran at its 7 million barrels-a-day maximum. Aramco produced 7.76 million barrels a day in March; the gap represents barrels stranded by the Hormuz closure, with no pipeline fix available at that volume. Saudi Arabia also raised fuel oil imports 86% year-on-year in April as gas-fired power generation declined, adding import costs against higher revenues. The Public Investment Fund (PIF) raised $7 billion in its largest-ever single bond sale, drawing $23.8 billion in orders across three tranches. The 30-year tranche priced 40 basis points wider than PIF’s pre-war January 2025 benchmark — the war premium is built into the yield curve and has not moved. PIF’s cash reserves sit at roughly $15 billion, a six-year low. Its US equity portfolio has fallen from a peak of $25.6 billion to $12 billion as the fund locks in an 80% domestic, 20% international investment split.
The clearest signal on OPEC+ came not from Riyadh but from Abu Dhabi. Anwar Gargash, the UAE’s diplomatic adviser, confirmed that the Emirates’ OPEC withdrawal was the result of a three-year strategic review — a decision to maximise revenues before the energy transition, framed as entering the “autumn of the hydrocarbon age.” The departure predated the Iran conflict and, on that timeline, is not reversible under different regional conditions. Saudi Arabia’s OPEC+ leadership now rests on a more compact grouping — Iraq, Kuwait, Algeria, Kazakhstan, Russia, Oman — with fewer internal incentives for the quota-busting that defined the UAE’s final years in the organisation.
Aramco and the French firm Pasqal inaugurated Saudi Arabia’s first quantum computer — a 200-qubit system at Aramco’s Dhahran data centre, offered to enterprises and universities as a cloud service. It is a modest but concrete step in the localisation drive that now forms Vision 2030’s working core: Oxagon for port and data infrastructure, quantum computing at Dhahran, airport expansion in Riyadh — the residue of ambition after fiscal reality has done its filtering.
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- Saudi Arabia drives Gulf diplomatic effort to restrain US-Iran war and secure ceasefire deal — Faisal bin Farhan, the foreign minister, conducted an intensive week of diplomacy — phone calls with counterparts in Qatar, Egypt, Syria, Kuwait, Portugal, Nepal, Iran, and others — publicly praising the American president’s decision to pause strikes on Iran and urging Tehran to seize the diplomatic opening. Mohammed bin Salman, the crown prince, was also cited by the president as among the Gulf leaders who personally asked him to hold off on imminent bombing. Saudi Arabia’s mediating posture was prominent in global coverage of the US-Iran conflict. (english.aawsat.com)
- Drone attacks launched from Iraqi airspace intercept Saudi Arabia, testing Gulf security — Saudi Arabia’s Ministry of Defense announced on May 17th that air-defence forces intercepted and destroyed three drones entering its airspace from Iraq, warning it reserves the right to respond. Iraq denied knowledge of launches from its territory and initiated investigations. Saudi Arabia and Kuwait condemned the attacks, and the Gulf Co-operation Council declared Saudi security inseparable from collective Gulf security. A separate drone attack on the UAE’s Barakah nuclear plant from Iraq on May 19th drew Saudi condemnation. (reuters.com)
- Aramco and Pasqal launch Saudi Arabia’s first quantum computer and regional cloud platform — Saudi Aramco, in partnership with French quantum computing firm Pasqal, inaugurated Saudi Arabia’s first quantum computer — a 200-qubit system housed at Aramco’s Dhahran data centre — and launched the Middle East’s first commercial quantum-computing-as-a-service platform. Planned applications include port logistics optimisation, CO2 storage, and well placement. Aramco’s venture capital arm Wa’ed Ventures had invested in Pasqal in 2023. (stocktitan.net)
- PIF withdraws from LIV Golf as AI subsidiary HUMAIN signs McKinsey and Accenture — Saudi Arabia’s Public Investment Fund confirmed it would end funding for LIV Golf after the 2026 season following an estimated $5–8 billion investment since 2022, with Yasir Al-Rumayyan, the fund’s governor, stepping down as LIV chairman. LIV is now seeking $350 million in new investment with a reduced ten-event schedule and player equity stakes. The same week, HUMAIN, PIF’s AI subsidiary, announced enterprise partnerships with McKinsey and Accenture, signalling a strategic shift from sports soft power to domestic technology. (cnbc.com)
- PIF in talks to sell minority Newcastle United stake for stadium funding — Saudi Arabia’s Public Investment Fund is in talks with potential investors to sell a minority portion of its 85% stake in Newcastle United, primarily to fund a new stadium projected to cost over £1 billion. Sources say the fund retains a long-term commitment to the club and will remain majority shareholder, with the stake sale intended to bring in institutional capital for the stadium rather than signal a withdrawal. (reuters.com)
- Aramco Q1 2026 earnings show higher revenue and profit; Hormuz closure strains oil export logistics — Saudi Aramco reported higher revenue and profit in Q1 2026, supported by stronger crude prices, with its downstream earnings before interest and taxes sharply improving. Separately, Amin Nasser, Aramco’s chief executive, warned publicly that if the Strait of Hormuz does not reopen by mid-June, global supply disruptions will persist into 2027, while noting Aramco could reach its maximum 12 million barrels-a-day capacity within three weeks of reopening. The East-West pipeline had been running at its 7 million barrels-a-day maximum throughout Q1. (ad-hoc-news.de)
- OPEC+ seven core members signal modest July production increase despite Hormuz disruptions — Seven principal OPEC+ member states are reported to be converging on a small increase in oil production targets for July — approximately 188,000 barrels a day — ahead of their June 7th meeting, despite ongoing disruptions to oil supply flows from the Iran war and partial Strait of Hormuz closure. Coverage appeared primarily in Arabic-language media. (alrasheedmedia.com)
- UAE withdraws from OPEC to maximise oil output before energy transition, reshaping Gulf oil dynamics — UAE officials confirmed that Abu Dhabi’s decision to withdraw from OPEC — announced weeks earlier — was the product of a three-year strategic study aimed at maximising oil production revenues before the global energy transition. Anwar Gargash, the UAE’s diplomatic adviser, stated the Emirates views itself as entering the ‘autumn of the hydrocarbon age.’ The move has strategic implications for Saudi Arabia’s leadership of OPEC+. (reuters.com)
- King Salman International Airport construction advances with new contractor selections — Construction of King Salman International Airport in Riyadh — part of a $100 billion aviation expansion under Vision 2030 — advanced into a new phase, with airside infrastructure packages under way including runway and taxiway works. Middle East Economic Digest reported the airport development company selected three contractors for apron early contractor involvement. The project is central to Saudi Arabia’s logistics strategy, including a FedEx partnership. (constructionreviewonline.com)
- Aramco in talks to acquire stake in Turkish OYAK energy affiliate GüzelEnerji — Saudi Aramco entered talks with OYAK, Turkey’s Army Mutual Assistance Institution, over possible investment in fuel distributor GüzelEnerji, as Aramco continues to explore downstream market entry points in Turkey. The discussions are described as preliminary with multiple partnership options under review. (turkiyetoday.com)
Notes
Notes
Saudi Arabia drives Gulf diplomatic effort to restrain US-Iran war and secure ceasefire deal
May 18–24, 2026
Drone attacks launched from Iraqi airspace intercept Saudi Arabia, testing Gulf security
May 17–20, 2026
Pakistan secretly deploys 8,000 troops and fighter jets to Saudi Arabia under defence pact
May 18–20, 2026
Aramco and Pasqal launch Saudi Arabia's first quantum computer and regional QCaaS platform
May 18–24, 2026
Hajj 2026 season begins with Saudi military deployment around Mecca, record pilgrim arrivals
May 18–24, 2026
Saudi Cabinet chaired by King Salman affirms Kingdom will not hesitate to protect its security
May 19, 2026
FairSquare report documents severe labor abuses of Nepali migrant workers in Aramco supply chain
May 21–24, 2026
Aramco Q1 2026 earnings show higher revenue and profit; Hormuz closure strains oil export logistics
May 21–23, 2026
OPEC+ seven core members signal modest July production increase despite Hormuz disruptions
May 21–22, 2026
UAE withdraws from OPEC to maximize oil output before energy transition, reshaping Gulf oil dynamics
May 18–22, 2026
Saudi March crude oil exports hit record low as Hormuz disruption forces East-West pipeline rerouting
May 20–21, 2026
PIF raises \$7 billion in record bond sale, trims US equity portfolio to \$12 billion
May 18–22, 2026
King Salman International Airport construction advances with new contractor selections
May 19–21, 2026
Other
United Arab Emirates
A drone struck the electrical infrastructure at the Barakah nuclear plant last week, the most provocative attack of the Iran conflict — and the UAE did not strike back.
That choice defines the week. Rather than respond militarily, the UAE routed everything through institutions: an emergency UN Security Council session on May 19, where Rafael Grossi, the director general of the International Atomic Energy Agency (IAEA), warned that a direct hit on the plant “could result in a very high rate of radioactivity to the environment”; a formal demand that Iraq “immediately and unconditionally halt and prevent all acts of aggression” from its soil; and a four-capital European tour by Abdullah bin Zayed, the foreign minister, who extracted public condemnations from the UK, Germany, Luxembourg, and the Czech Republic. The wording was equally precise — attributing the drones to Iraqi territory and Iran’s militia proxies rather than to the Iranian state directly, preserving room for peace negotiations that, by May 24, the US president was describing as “largely negotiated.”
The decision not to retaliate publicly was itself a signal. The UAE invoked “full sovereign, legal, diplomatic, and military rights to address any threat,” intercepted six further drones in the 48 hours after the initial strike, and then did nothing visible. That pattern — invoke, intercept, abstain — confirms the UAE’s restraint is policy, not improvisation. It held under the hardest test of the conflict.
Even as the UAE kept working through institutions, peace negotiations lurched forward. The shift from “massive life support” on May 17 to “largely negotiated” a week later is the sharpest shift since the ceasefire. Iran’s Foreign Ministry described the talks as both “very far and very close” — a formulation that maps genuine ambiguity rather than disguises it. Hormuz control remains the central sticking point: Washington wants the strait fully open; Tehran is seeking a supervision zone. US Central Command reported the naval blockade had stopped 89 commercial vessels since mid-April, though traffic last week doubled from the week before.
The most notable development was quiet. Mohammed bin Zayed, the UAE president, and Mohammed bin Salman, the Saudi crown prince, participated in the same Oval Office call convened by the American president — alongside Tamim bin Hamad Al Thani, Qatar’s emir, Recep Tayyip Erdogan, Egypt’s president, Jordan’s king, Bahrain’s king, and Pakistan’s army chief. The two Gulf rivals have not been reported speaking since their falling-out; here they sat in the same US-convened meeting. That does not repair the rupture. It maps its ceiling: bilateral hostility stops short of blocking joint participation in meetings the Americans convene.
Sultan Al Jaber, the chief executive of the Abu Dhabi National Oil Company (ADNOC), told an Atlantic Council audience that even if the conflict ended tomorrow, full Hormuz flows would not return before the first or second quarter of 2027, and that getting back to 80% of pre-conflict levels would take at least four months. He confirmed the West-East Pipeline — bypassing Hormuz to double export capacity through Fujairah — is 50% complete and being accelerated toward 2027 on the direct orders of Crown Prince Khaled bin Mohamed. When finished, the pipeline will handle roughly 3 million barrels per day. Hormuz normally carries 20 million. The infrastructure gap is structural and will remain so.
Anwar Gargash, the presidential adviser, gave the clearest public explanation yet of why the UAE left OPEC: the decision was three years in the making, rooted in the view that the world is approaching “the autumn of the hydrocarbon age.” The old OPEC quota of roughly 3.5 million barrels per day capped a country capable of producing 4.85 million — a 38% ceiling now removed. “If you have the ability to produce and generate income and use that income in other investments, that’s what you should do,” Mr Gargash said.
Those other investments continued. Mubadala, a state investment company, committed $650 million — with a further $850 million from a multilateral consortium including the World Bank Group’s International Finance Corporation (IFC) and the Inter-American Development Bank Group’s BID Invest — to begin construction of a sustainable aviation fuel biorefinery in Bahia, Brazil, part of a broader $12.5 billion biofuels ambition there, with production expected from 2029. Core42, the sovereign cloud subsidiary of G42, an artificial-intelligence and technology conglomerate, closed $550 million in structured trade finance with HSBC to build AI infrastructure across the US and Europe. Both are done deals, not term sheets: capital committed, construction beginning.
One development remains unconfirmed but logged. Deutsche Welle, citing a Middle East Eye report based on two unnamed US officials, reported that Israel and the UAE agreed to establish a joint defence fund for weapons procurement during a covert visit by Israel’s prime minister to Abu Dhabi — a visit the UAE has denied occurred. The American ambassador to Israel separately confirmed that Israel loaned the UAE aerial defence weaponry. If the fund report is ever confirmed, it would represent the most formal expression of a covert defence relationship that has been documented, piecemeal, since April.
A peace deal, if it materialises, would reduce the immediate threat. It would not resolve the Hormuz damage timeline, the rupture with Saudi Arabia, or the shape of the Iran relationship once the guns stop. The UAE has spent this week building the diplomatic record — in New York, London, Berlin, Luxembourg, Prague — that will matter when those questions come due.
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- Modi visits UAE; MBZ and Modi witness signing of major ADNOC-India energy agreements including 30 million barrel strategic reserve deal — Narendra Modi, India’s prime minister, visited Abu Dhabi as the first stop of a five-nation tour, meeting Mohammed bin Zayed, the president. In the presence of both leaders, ADNOC signed two strategic collaboration agreements with Indian partners covering expanded crude oil storage in India’s strategic petroleum reserves (up to 30 million barrels), LNG supply to Hindustan Petroleum Corporation, and LPG cooperation. The visit was framed as deepening the Comprehensive Strategic Partnership during a period of Iran-driven energy insecurity. (lngindustry.com)
- ADIA marks 50th anniversary with leadership statements and first 2026 board meeting chaired by Tahnoun bin Zayed — The Abu Dhabi Investment Authority (ADIA) marked its 50th anniversary this week. Chairman Tahnoun bin Zayed chaired the first 2026 board meeting with Mansour bin Zayed and Crown Prince Khaled bin Mohamed present, reviewing 2025 performance and Q1 2026 results. Multiple Abu Dhabi leadership figures issued statements on ADIA’s strategic role in the emirate’s financial resilience, with Sheikh Hamed bin Zayed, ADIA’s managing director, providing institutional remarks. (emirates247.com)
- Mubadala-backed Acelen secures $1.5 billion to begin construction of Brazil sustainable aviation fuel biorefinery — Mubadala Capital’s Brazilian subsidiary Acelen Renováveis announced $1.5 billion in financing — $650 million from Mubadala and $850 million from a multilateral lending consortium including BNDES (Brazil’s national development bank), the World Bank Group’s International Finance Corporation (IFC), and BID Invest — to begin construction of a sustainable aviation fuel and renewable diesel biorefinery in Bahia, Brazil. The plant is expected to produce one billion litres annually from 2029 and is part of Mubadala’s stated $12.5 billion five-biorefinery ambition for Brazil. (constructionreviewonline.com)
- Mubadala Energy backs $13 billion Commonwealth LNG project on US Gulf Coast — Mubadala Energy, which holds a 24.1% stake in the Caturus platform, joined a $9.75 billion project financing package for the Commonwealth LNG export facility in Cameron Parish, Louisiana, as Caturus reached a positive final investment decision. The full project is valued at roughly $13 billion and is described as the latest sign of growing Gulf investor interest in US energy infrastructure. (semafor.com)
- ADNOC Distribution posts 21% Q1 profit growth and announces partnership with Americana Restaurants for up to 200 quick-service restaurant outlets — ADNOC Distribution, part of the Abu Dhabi National Oil Company (ADNOC), reported record Q1 2026 earnings before interest, taxes, depreciation and amortisation (EBITDA) of $307 million and net profit of $210 million, up 20.7% year-on-year, driven by non-fuel retail growth. The company also announced a partnership with Americana Restaurants to open up to 200 quick-service restaurants across ADNOC service stations in the UAE, Saudi Arabia, and Egypt. (menafn.com)
- First ADNOC LNG tanker exits Strait of Hormuz bound for India since the war began — An ADNOC Logistics & Services tanker, the Al Hamra, was spotted transiting the Strait of Hormuz with an LNG cargo bound for western India — the first India-bound LNG shipment through Hormuz in roughly three months since the Iran war began. ADNOC had reportedly sent two earlier shipments to Japan and another destination but had disabled Automatic Identification System (AIS) transponders on tankers near its Das Island facility. (economictimes.indiatimes.com)
- UAE Central Bank launches anti-fraud operations centre and orders banks to strengthen authentication beyond one-time passwords — The Central Bank of the UAE issued new guidance ordering financial institutions to move beyond single-factor authentication methods such as one-time passwords (OTPs), creating a central Anti-Fraud Operations Centre. The central bank also issued guidance on responsible AI use in financial services and set a June 30, 2026 compliance deadline for digital brand protection requirements under an existing 2025 notice.
Notes
Notes
Drone strikes near Barakah nuclear plant, UAE blames Iran-linked Iraqi militias and launches global diplomatic response
May 17–21, 2026
MBZ participates in Trump-led multilateral call with Gulf and Muslim leaders as US-Iran peace deal nears
May 19–24, 2026
ADNOC CEO warns Hormuz flows won't normalize until mid-2027, accelerates Fujairah bypass pipeline
May 19–24, 2026
UAE exits OPEC after nearly 60 years; presidential adviser says decision took three years and reflects end-of-oil-era strategy
May 18–22, 2026
Modi visits UAE, MBZ and Modi witness signing of major ADNOC-India energy agreements including 30 million barrel strategic reserve deal
May 18–23, 2026
Foreign Minister Abdullah bin Zayed conducts European tour covering London, Berlin, Luxembourg, and GLOBSEC Prague to build support after Barakah attack
May 18–24, 2026
ADIA marks 50th anniversary with leadership statements and first 2026 board meeting chaired by Tahnoun bin Zayed
May 21–22, 2026
Mubadala-backed Acelen secures \$1.5 billion to begin construction of Brazil sustainable aviation fuel biorefinery
May 21–22, 2026
G42 subsidiary Core42 raises \$550 million from HSBC to scale AI cloud infrastructure in US and Europe
May 21, 2026
UAE-Saudi Arabia rift deepens as new Gulf alliance blocs form over divergent Iran war approaches
May 18–21, 2026
ADNOC Distribution posts 21% Q1 profit growth and announces partnership with Americana Restaurants for up to 200 QSR outlets
May 13–22, 2026
India
Marco Rubio came to India to repair a relationship that independent analysts described as carrying a “trust deficit at its lowest point in over two decades” — and Subrahmanyam Jaishankar, the foreign minister, used their joint press conference to tell him plainly that India buys its energy from wherever it can get it cheapest.
That exchange defines the week. Mr Rubio’s four-day visit — meetings with Narendra Modi in Kolkata, Mr Jaishankar at Hyderabad House, and Ajit Doval, the national security adviser, on May 24 — produced results: renewal of the 10-year Major Defence Partnership framework, an underwater domain awareness plan, and confirmation of a Quadrilateral Security Dialogue foreign ministers meeting for May 26. Mr Rubio said that American ties with Pakistan and China were “not at the expense of the strategic alliance with India.” The American president called in live to the US Embassy’s 250th Independence Day celebration to praise Mr Modi and extend a White House invitation. Yet Mr Jaishankar’s formula — “dependable, multiple and cheap energy sources… the US fits the bill in many respects, so do some other countries” — delivered in Mr Rubio’s presence, signalled that India is managing the relationship, not repositioning around it. The February 2026 Russian oil purchase constraints that produced the trust deficit in the first place remain; the multi-alignment strategy that generated them is intact.
The most consequential moment of the week may prove to be a remark Mr Rubio made at that same press conference: there was “a possibility that the world will get some good news in the next few hours” about the Iran war. Regional reporting indicated the US was nearing an Iran agreement while talks continued in India, with the American president flagging progress separately. If a deal comes through, it would simultaneously ease India’s Hormuz exposure, potentially revive the Chabahar port access severed five weeks ago, remove the core conflict that prevented India from producing a joint communiqué as 2026 BRICS chair, and partially unwind the energy-driven pressure on the rupee. Confidence is low — sources are thin, the deal had not been confirmed by the close of the analysis window, and American deal signals in this period have not always held — but the stakes are high enough to watch closely.
The week’s diplomacy extended well beyond Mr Rubio’s visit. Mr Modi completed the Norway and Italy legs of his five-nation European tour, chairing the third India-Nordic Summit in Oslo with all five Nordic prime ministers and meeting Sergio Mattarella, Italy’s president, at the Quirinal Palace in Rome. At a Rome forum on food security, Mr Modi cited India’s development of some 3,000 climate-resilient crop varieties over the past decade, placing India within the global food security system. Nikos Christodoulides, Cyprus’s president, made a state visit to New Delhi. One notable absence: the India-US interim trade agreement, pending since Mr Modi’s February 2025 Washington visit, remained unfinished. Mr Jaishankar’s call for its “early finalisation” at the joint press conference confirmed the gap — repeated framing of “early date” without conclusion signals that real problems remain.
Domestically, the Bharatiya Janata Party’s (BJP’s) West Bengal consolidation continued. The party’s candidate won the Falta Assembly repoll by 109,021 votes, bringing its West Bengal tally to 208 seats. The margin was not the story: the Trinamool Congress (TMC), which won 89% of the vote in this constituency in the 2024 general election — when Abhishek Banerjee took a 1.68 lakh lead here — finished fourth with 3.7% of the vote and forfeited its deposit. The Communist Party of India (Marxist) came second. The collapse in Mr Banerjee’s own stronghold suggests more than an electoral setback: TMC’s grassroots machine appears to be failing at its core, with the left emerging as the viable opposition in its place.
The legal overhang over Gautam Adani cleared entirely. The US Justice Department dropped all criminal fraud charges. Treasury’s sanctions body settled with Adani Enterprises for $275 million, having found the company purchased Iranian liquefied petroleum gas through a Dubai intermediary that masked the origin — showing how India-linked energy procurement can run into US sanctions. The Securities and Exchange Commission’s civil case settled separately. Adani Group stocks rallied as much as 5.3%; Capital Group disclosed it had built a $2 billion position in the conglomerate. Reuters noted that the same attorney represents both Adani and the American president, and that Adani’s $10 billion US investment commitment could not proceed while charges were pending — revealing the transactional logic now shaping parts of the India-US economic relationship.
Amit Shah, the home minister, used a Border Security Force lecture to announce the Smart Border Project — a technology grid of drones, radars, and cameras aimed at making the Pakistan and Bangladesh frontiers “impenetrable within a year” — alongside a High-Power Demography Mission to map infiltration routes. Mr Shah noted that BJP now governs all three Indian states bordering Bangladesh, allowing the three states to act together. The framing — countering “artificial demographic changes” — applied the logic of Operation Sindoor’s “eliminate the problem at its roots” doctrine to internal border security. The Doval-Rubio meeting that same day covered counter-cross-border terrorism and Indo-Pacific security, but produced no new procurement or capability-sharing announcements beyond the underwater domain awareness plan agreed at the ministerial level.
Other Stories
Other Stories
- Amit Shah addresses RSS-linked ‘Janjati Mahakumbh’ at Red Fort, assures tribals Uniform Civil Code will not apply to them and condemns forced conversion — Amit Shah, the home minister, addressed a mass tribal gathering of an estimated 1.5 lakh people from 550-plus communities at the Red Fort grounds on May 24, organised by the Tribal Protection Forum (Janjati Suraksha Manch), which is linked to the Rashtriya Swayamsevak Sangh (RSS), to mark the 150th birth anniversary of Birsa Munda. Mr Shah assured tribal communities that the Uniform Civil Code (UCC) will never apply to them, as it has not in BJP-ruled states Uttarakhand and Gujarat, and urged them not to believe ‘misinformation’ spread by ‘divisive forces.’ The event also pressed demands for de-listing converted Christians and Muslims from the Scheduled Tribe category. (indianexpress.com)
- Reserve Bank of India defends rupee through aggressive interventions and record ₹2.86 lakh crore dividend transfer to government — The Reserve Bank of India (RBI) intervened aggressively in foreign-exchange markets to arrest the rupee’s slide to successive record lows driven by Iran war-related oil price spikes and foreign fund outflows, deploying an estimated $18 billion in spot and forward interventions and announcing a $5 billion USD/INR buy-sell swap auction. The RBI simultaneously approved a record ₹2.86 lakh crore surplus transfer to the central government for fiscal 2026, prompting debate over whether the central bank is over-extending itself to support government finances.
Notes
Notes
Rubio's four-day India visit: Modi, Jaishankar, Doval meetings; Trump calls in at US Embassy event; White House invitation extended to Modi
May 22–24, 2026
Amit Shah addresses RSS-linked 'Janjati Mahakumbh' at Red Fort, assures tribals UCC will not apply to them and condemns forced conversion
May 23–25, 2026
Amit Shah announces 'Smart Border' technology grid against Pakistan and Bangladesh infiltration, pledges to deport all illegal migrants
May 22–24, 2026
BJP sweeps West Bengal Falta repoll by record margin; new CM Adhikari consolidates power as Mamata Banerjee attacks 'bulldozer politics'
May 23–24, 2026
US drops all criminal fraud charges against Gautam Adani; Adani Group stocks rally as legal overhang clears
May 18–24, 2026
RBI defends rupee through aggressive interventions and record ₹2.86 lakh crore dividend transfer to government
May 21–22, 2026
Pakistan
While Field Marshal Asim Munir made his second trip to Tehran in a week and Washington called Pakistan its lead Iran-US peace broker, a suicide bomber in Quetta killed at least 24 soldiers and their families on their way home for Eid.
Marco Rubio, the US secretary of state, said Pakistan “continues to be” Washington’s “primary interlocutor” on the Iran talks, with the two sides in “constant communication” at “the highest levels.” The designation is a stronger commitment than the American president’s earlier personal endorsement — it is stated State Department policy, on the record. Field Marshal Munir met Masoud Pezeshkian, Iran’s president, and Abbas Araghchi, the foreign minister, across two visits on May 22 and 23, covering the full range of senior Iranian officials. Pakistan’s military press service described the outcome as “encouraging progress toward a final understanding” — the most advanced language it has used. The deal is not signed: Iran complained to Field Marshal Munir that the US was not negotiating honestly, and the American president said on May 24 there was “no rush.” Pakistan’s leverage holds precisely because closure has not come. Qatar sent a negotiating team to Tehran in parallel, and a Saudi interior minister met Mohsin Naqvi, the interior minister, there — putting Pakistan inside a broader mediation coalition rather than acting as sole broker.
While Field Marshal Munir shuttled to Tehran, Shehbaz Sharif, the prime minister, spent four days in Hangzhou and Beijing — the two tracks running simultaneously as a deliberate show of Pakistan’s range. At a business conference in Hangzhou, memorandums of understanding (MoUs) and agreements worth more than $7 billion were signed; Mr Sharif witnessed $1.22 billion in company-level deals covering electric-vehicle (EV) charging infrastructure, battery storage, and pharmaceuticals. He set a target of $10 billion in agricultural trade with China within five to seven years. He also acknowledged that only 30% of past MoUs had turned into actual deals — a caveat the headline figures do not easily survive. Ahsan Iqbal, the planning minister, went further at a party forum in Beijing, proposing “Five Political Corridors” to lock party-to-party China engagement into structures that would outlast any single government — the most explicit attempt yet to embed the China relationship beyond the current coalition’s political life. At home, the National Assembly went into recess while both senior figures were abroad, the usual arrangement when major foreign policy moves are under way.
A third strand completed the picture. Reuters reported that Pakistan had deployed a jet fighter squadron and thousands of ground troops to Saudi Arabia during the Iran-US war — the first confirmed invocation of the Strategic Mutual Defence Agreement signed in Riyadh in September 2025. Neither government has publicly confirmed the deployment’s scope, duration, or rules of engagement. But the fact stands: Pakistan is simultaneously brokering peace between Iran and Washington and deploying forces to a Gulf partner of Iran’s adversaries. Pakistan’s multi-front posture is no longer just words.
The Quetta attack cut through all of this. On Eid morning, a Balochistan Liberation Army (BLA) Majeed Brigade suicide bomber drove an explosives-laden vehicle into a military shuttle train at Chaman Phatak station. The train was carrying security personnel and their families returning home for the holiday. At least 24 were killed and more than 70 wounded, 20 critically. Two coaches overturned and caught fire; hospitals declared a medical emergency. The BLA has struck Balochistan’s railways before — 26 people died in a similar attack in 2024 — but the Eid timing and deliberate targeting of families rather than uniformed combatants marked a step up in psychological force.
The official response reached for familiar tools. Sarfraz Bugti, the Balochistan chief minister, invoked “Fitna al-Hindustan” — the government’s standing claim that the BLA is an Indian-backed outfit — to deflect accountability. Asif Ali Zardari, the president, framed the attack as an attempt to “undermine Pakistan’s role in regional and international peace efforts,” converting the embarrassment into a victimhood narrative. These moves have worked before. But the attack fell in the same week that Mr Rubio was publicly praising Pakistan’s peace role, meaning the failure to protect military families traveling home for Eid was visible to the very foreign audience now watching Pakistan most closely. The army brokering peace in Tehran cannot protect its own people in Quetta: the contradiction has rarely been this naked, or this widely seen.
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Other Stories
- Leaked cypher renews scrutiny of US role in Imran Khan’s 2022 ouster; PTI protests continue — Investigative outlet Drop Site published Cable I-0678 — the classified Pakistani diplomatic telegram Imran Khan cited as evidence of a US-backed conspiracy to remove him — prompting wide coverage. Pakistan Tehreek-e-Insaf (PTI) and allied TTAP staged countrywide protests demanding Mr Khan’s release and medical care; opposition leader Achakzai threatened a budget boycott. Separate reporting raised concerns about Mr Khan’s eyesight deteriorating in solitary confinement.
Notes
Notes
Field Marshal Munir leads Pakistan's US-Iran mediation from Tehran, ISPR announces 'encouraging progress'
May 20–24, 2026
PM Shehbaz Sharif makes four-day China visit, signs \$1.22B+ in investment deals, meets Xi Jinping
May 21–25, 2026
Leaked cypher renews scrutiny of US role in Imran Khan's 2022 ouster; PTI protests continue
May 18–23, 2026