The total value of contracts awarded across the Gulf Cooperation Council (GCC) declined sharply in the second quarter of 2026, primarily due to the impact of the ongoing conflict in Iran and its broader regional effects on economic activity. According to recent data, contract awards in the GCC fell 25.4% quarter-on-quarter to USD 59.4 billion in Q2, down from USD 79.6 billion in Q1. All GCC member states recorded declines in quarterly contract awards except Saudi Arabia, which saw a notable 160.4% rise, reaching USD 30.0 billion.
Qatar experienced the most significant contraction, with contract awards plummeting to USD 931 million in Q2 from USD 9.3 billion in the previous quarter. Sector-by-sector analysis showed most industries facing declines, except for the Oil Sector, which expanded by 269% quarter-on-quarter to USD 13.7 billion, buoyed by increased investment in the upstream industry.
Despite the quarter’s setbacks, the GCC's year-on-year performance remained positive, with a 30.0% increase in aggregate contract values compared to Q2 2025. This growth was driven largely by Saudi Arabia and Oman. Saudi Arabia’s contract awards surged 53.6% year-on-year to USD 30.0 billion, while Oman’s saw a remarkable 341.7% increase, reaching USD 5.9 billion. Conversely, the United Arab Emirates, Bahrain, and Qatar all reported year-on-year declines in contract awards during the same period.
Saudi Arabia’s rebound was broad-based, with contract awards rising in four of its eight sectors. The Construction sector led growth with a 184.4% year-on-year increase to USD 14.2 billion, followed by the Gas sector, which rose from USD 0.8 billion in Q2 2025 to USD 4.4 billion. Transport and Water sectors also posted solid double-digit gains. However, the Power sector declined sharply, down 89.7% year-on-year to USD 648 million.
Significant projects awarded in Saudi Arabia during the quarter included a USD 4.6 billion Ministry of Defense contract to Al-Bawani Company for building its headquarters, and a USD 1.3 billion road construction contract for the Sheikh Jaber Al-Sabah Road project in Riyadh, awarded to a joint venture of Al-Rashid Trading & Contracting Company and Turkey’s IC Ictas. Additionally, a USD 727 million contract was awarded for the Waldorf Astoria superblock, a mixed-use development in Diriyah.
The UAE’s project market contracted in both quarterly and yearly terms. Q2 contract awards declined 56.6% quarter-on-quarter and 5.4% year-on-year to USD 20.5 billion. The Gas sector suffered the most, with contract values dropping 99.4% year-on-year to USD 30 million. Despite this, the Oil sector accounted for over half of the UAE’s project awards, reaching USD 11.5 billion compared to USD 230 million a year earlier. Abu Dhabi National Oil Company (Adnoc) announced plans to allocate USD 54.4 billion of its USD 150 billion capital expenditure budget for the next five years toward contracts in 2026-2028, focusing mainly on upstream and downstream oil and gas projects.
Kuwait reported a 49.1% year-on-year increase in contract awards to USD 2.0 billion, though its quarterly figure dropped 65.4%. The Oil sector dominated with USD 992 million in contracts, including a major project developing Jurassic Light Oil export facilities. Kuwait also saw notable contracts in the Water and Power sectors, including a USD 100 million substation construction and a USD 565 million upstream oil project awarded to Heavy Engineering Industries & Shipbuilding Company.
Qatar’s contract awards declined by 40.8% year-on-year to USD 931 million and dropped 90% quarter-on-quarter. The Oil and Construction sectors accounted for most of the awards despite reductions in several sectors including Chemical, Gas, Industrial, and Power. A significant contract involved completing a strategic trunk sewer project connecting Sheehaniya to the Doha North Sewage Treatment Works.
Oman’s project market demonstrated resilience amid regional instability, with contract awards rising 341.7% year-on-year to USD 5.9 billion and remaining steady quarter-on-quarter. The surge was largely driven by the Power sector, which saw significant project awards after no contracts were reported in Q2 2025. The Gas sector also increased, though the Transport sector experienced a decline. A major USD 2.3 billion, 15-year water and wastewater services contract was awarded to a consortium led by SUEZ.
Looking ahead, efforts to resolve regional conflicts have improved the outlook for the GCC projects market. The GCC currently has USD 2.05 trillion in upcoming projects, with Saudi Arabia accounting for over half of this pipeline and the UAE holding just over a quarter. The Construction sector is expected to dominate, comprising nearly 40% of upcoming projects, followed by Transport and Power sectors. Saudi Arabia leads the Power sector with 63% of projects under planning and execution, including the high-profile USD 6 billion King Abdullah City for Atomic & Renewable Energy nuclear power project.
These figures reflect ongoing challenges from regional conflict but also signal significant investment opportunities across the GCC, as countries seek to advance infrastructure and energy development despite geopolitical uncertainties.