In June, contracts in the MENA region show a slight recovery, reaching a total value of $13.9 billion.
In the second quarter of 2025, the MENA region experienced a substantial decline in contract awards, particularly in the Gulf Cooperation Council (GCC) countries. The total value of contracts awarded dropped sharply by nearly 58%, from $68 billion in Q2 2024 to about $28 billion in Q2 2025.
Reasons for Decline
The construction sector was hit hardest, with a 60% year-on-year drop in contract awards. The value of contracts declined from $20.5 billion to $8.2 billion. The oil sector also saw a dramatic fall, with a 98.4% decrease, from $4.5 billion in Q2 2024 to only $70 million in Q2 2025. These two sectors were the primary contributors to the overall decline in contract awards across the GCC during the period.
Country-specific figures show that Saudi Arabia’s contract awards plummeted by 72.5%, from $35.5 billion to $9.8 billion, while the UAE’s awards dropped 47%, from $26.4 billion to $14 billion. Kuwait experienced a milder decline of around 9.8%.
Specific Project Details
While specific project names were not mentioned, the data highlights sectoral trends, emphasizing heavy reductions in construction and oil-related projects across GCC states. Contrasting the GCC trend, Qatar showed a surge in tenders issued in Q2 2025, with an increase of 111% in tender and auction values.
Companies like Halliburton and Weatherford operating in the Middle East and North Africa reported mixed revenue and earnings results, reflecting the uneven nature of project activity.
Summary
The sharp decline in awarded contracts in Q2 2025 in the MENA region, particularly in GCC countries, is mainly driven by steep reductions in the construction and oil sectors. Economic diversification efforts like those in Qatar demonstrate localized growth in government tender activity, contrasting broader regional declines.
The overall market appears cautious, with project awards shrinking significantly in key sectors, likely influenced by shifting global oil markets, geopolitical considerations, and budgetary reallocations in major spenders like Saudi Arabia and the UAE.
Notable Contract Awards
- Egyptian contractor Petrojet was awarded a major engineering, procurement, and construction (EPC) contract valued at approximately $273 million in Oman.
- The bulk of the activity in the UAE came from the gas sector.
- The decline in contract activity is attributed to reduced spending on megaprojects in Saudi Arabia and a broader slowdown in project activity across the GCC.
- Bahrain concluded one contract award in June 2025, worth $14 million, given to local company Mohammed Jalal and Sons to develop the Qalali Health Centre in Muharraq.
- The largest contract awarded in Saudi Arabia in June was worth $485 million for the Jubail 4 Independent Water Project (IWP), given to Power China by a consortium of the Saudi Water Partnership Company and the National Center for Privatization.
- The largest contract awarded in Kuwait in June was a $173 million deal signed by the Ministry of Electricity and Water to supply and install 400-kilovolt overhead transmission lines in the regions of Khairan, Wafra, and Sulaibiya.
Comparison to Previous Quarters and Years
- Saudi Arabia's contract awards in June 2025 were $2.3 billion, a slight decrease from May’s $2.7 billion.
- Oman's contract awards in June 2025 totaled $489 million.
- The Abu Dhabi National Oil Company (ADNOC) awarded $5 billion in contracts for the first phase of a major gas field development.
- The overall contract activity in 2025 is below expectations for 2024, which had projected awards totaling $347 billion.
- The total value of contract awards in May 2025 was $12.6 billion.
- In Kuwait, the total value of awarded contracts in June reached $640 million.
- The project in Oman, implemented in collaboration with OQ Gas Networks, involves the construction of a 193-kilometer, 42-inch pipeline connecting the wilayats of Fahud and Sohar.
- The value of contracts awarded in the second quarter of 2025 reached $41 billion, down significantly from $73 billion in the same period in 2024.
- The UAE outperformed its regional peers in June, signing contracts worth $7.4 billion.
- Despite the overall decline in contract awards in the Gulf Cooperation Council (GCC) countries, the finance sector seems to have shown resilience, as evidenced by the continued operations of companies like Halliburton and Weatherford in the Middle East and North Africa.
- The energy sector, particularly the oil and gas industries, witnessed a dramatic fall in contract awards, which could have implications on both industry finance and the overall economy of the MENA region, as these sectors are primary sources of revenue.
