One Big Deal: Saudi Arabia, Türkiye, and Pakistan sign defense agreement: Known as the Mecca Joint Defense Agreement, this pact on paper resembles NATO’s Article 5, codifying that an attack on one is tantamount to an attack on all, and signals greater political and military cooperation among the three countries.
Why we care: Much remains to be seen (and tested) about the limits of this trilateral defense pact. Would Saudi Arabia really enter an India-Pakistan conflict? Would Türkiye and Pakistan go to war with Iran the next time Saudi Arabia is attacked? The agreement’s most consequential unspoken dimension is Pakistan’s nuclear arsenal: Saudi Arabia has long sought informal guarantees of nuclear cover as a hedge against a nuclear-armed Iran, and a formal trilateral defense pact, however limited in practice, is the closest Riyadh has come to institutionalizing that desire, a development that policymakers will be watching carefully in Washington, Jerusalem, and Tehran.
While the agreement is security-focused, we’re also watching for the economic dimensions of the realignment. The Saudi-Pakistan mutual defense agreement signed in late 2025 (on which this trilateral was built) was followed six weeks later with an Economic Cooperation Framework, aiming to build out a plan to boost trade and investment ties between Saudi and Pakistan in sectors ranging from mining and energy to food supply chains and industrial growth. Since then, there have been some discussions about an electricity interconnection and greater energy cooperation, and Saudi Arabia bailed Pakistan out of a mounting debt crisis during the Iran war. Yet there seems to be little visible progress on big dealmaking, such as a potential Saudi investment in Pakistan’s Reko Diq, one of the largest undeveloped copper and gold mines in the world.
Türkiye’s entrance here could accelerate commercial activity in a range of sectors across the three markets, starting with defense. Riyadh is already in deep with Ankara having signed a $3B contract with Turkish drone manufacturer Baykar in 2023, then the largest defense export deal in Türkiye’s history. Notably, the agreement helped localize drone production in the Kingdom while reducing its reliance on U.S. suppliers. Pakistan and Türkiye also have a well-established defense partnership, most notably involving a joint production agreement to produce warships for Pakistan’s navy. Whether the Mecca agreement translates into deeper defense industry cooperation, with Saudi capital, Turkish technology, and Pakistan’s large military ecosystem, will be the first test of whether this defense agreement moves into the economic domain.
Beyond defense, we’re also watching for impact in third markets, beginning with Syria. Saudi Arabia has committed billions of dollars for Syrian reconstruction, while Turkish companies have been first-movers in actually doing the work to rebuild energy, transportation, and housing infrastructure in the country. The announcement of the refurbishment of the Ottoman-era Hejaz Railway, linking the Kingdom to Türkiye via Syria and Jordan, is another signal of this growing regional realignment. Whether there is a role for Pakistani labor and materials in reconstruction will be another signal we are monitoring.
The announcement also points to a growing regional economic split with each country lining up alongside the competitors of its own regional rival: Saudi Arabia against the UAE, Pakistan against India, and Türkiye against Israel. These are not fixed blocks and there are relationships across the divide. The U.S. has strongly supported the US-India-UAE alignment (with hopes that Saudi might eventually join), but President Trump praised the Mecca Agreement as a sign of regional integration. Even so, whether or not it materializes into meaningful defense and economic cooperation, it is difficult to not see this agreement as part of a broader disaggregation of longstanding alliances in the region.
One Policy Development: Kushner meets with Hamas; Board of Peace awards 1st construction contract: Special Peace Envoy Jared Kushner held rare direct talks with Hamas leadership in Cairo, accompanied by Board of Peace Director Nickolay Mladenov and former British PM Tony Blair, before traveling to Jerusalem for a four-hour session with Israeli PM Netanyahu.
Why we care: Earlier this month, the Board of Peace awarded its first construction contract, a deal to build a military base in northern Gaza for the US-backed international stabilization force. Viewed together, these developments reveal different fault lines in Gaza’s political landscape. The Board of Peace’s construction contract is the most tangible sign yet that Washington intends to build its Gaza vision into existence regardless of political progress. The Kushner-Hamas meeting in Cairo is the more consequential development. In spite of Netanyahu’s repeated claims of ‘total victory,’ the meeting represents a recognition that Hamas remains a force in Palestinian politics that cannot be ignored.
This same recognition helps explain why Netanyahu rejected Trump’s 15-point Gaza roadmap the week prior. Coming out of the Jerusalem meeting, Netanyahu’s position was unambiguous: no IDF redeployment, no reconstruction, until Hamas is completely disarmed, with weapons handed over under US military supervision. Netanyahu’s rejection is as electoral as anything else: Finance Minister Bezalel Smotrich threatened to collapse the government if Israel accepts the U.S. roadmap, while National Security Minister Itamar Ben Gvir, who recently called for Israel to “destroy 30-40 homes a day“ in Gaza, dismissed Kushner’s Hamas meeting as a betrayal, leaving Netanyahu caught between Washington’s diplomacy and a coalition determined to blow up any deal. And with national elections in Israel taking place in just over two months, Trump’s Gaza plan will remain part of the campaign, with an Israeli public that is highly skeptical of any change in the existing situation between Israel and Gaza.
Kushner claimed there could be progress on Hamas disarmament “in about a month,” while Saudi Arabia, the UAE, Egypt, Jordan, Qatar, Türkiye, and Pakistan issued a joint statement condemning Israel’s rejection of the roadmap, saying “Israel now bears responsibility for obstructing the efforts to bring peace in Gaza.” This joint rebuke suggests regional states’ patience for Gaza’s political deadline could be running thin.
One Source of Friction: Trump threatens Oman over potential Strait of Hormuz deal with Iran. For the second time in as many months, President Trump threatened to bomb Oman after reports emerged that Muscat was engaged in talks with Tehran about a framework to manage navigation through the Strait of Hormuz.
Why we care: The Iran-Oman proposal is modeled loosely on the Strait of Malacca governance structure, under which states that sit across the Strait jointly administer maritime safety, environmental protection, and navigation coordination without one party claiming unilateral sovereignty. To optimists, the Oman-Iran Hormuz talks are the conflict’s most creative diplomatic initiative. To skeptics, they are a signal of American defeat that gives Iran the recognition of sovereignty over Hormuz it has been craving since February. The Malacca model, which Oman has reportedly been advancing since June, works in Southeast Asia because all three littoral states (Malaysia, Singapore, and Indonesia) have broadly compatible interests in keeping the strait open and commercially viable. In stark contrast, the Hormuz version has a fundamental problem: Iran’s interest is not in keeping Hormuz open unconditionally, but rather in extracting maximum leverage from controlling who transits and on what terms. A governance framework that gives Tehran that kind of power risks institutionalizing that leverage rather than neutralizing it, which is why Washington and Riyadh have both viewed the proposal with deep skepticism.
Oman’s position, meanwhile, is becoming more precarious. Muscat has spent five months mediating between Washington and Tehran, hosting backchannel contacts, absorbing Iranian drone strikes while maintaining plausible neutrality with all parties. That role depends entirely on both sides trusting Oman. Trump’s threats, however rhetorical and bombastic, chip away at that trust from the Washington side, while even the perception that Oman is helping Iran institutionalize Hormuz control chips away at it from the Gulf side. Several GCC states have privately pushed back against any formal role for Iran in Hormuz governance as a red line. For years, Oman’s ability to maintain relationships with all sides has been arguably its greatest strategic asset. But repeated characterizations of Oman as more sympathetic to Iran than to the US could antagonize a key intermediary, eventually becoming a self-fulfilling prophecy.
Under The Radar: Iraq is running 1,000 Trucks a day through Syria. Since April, Iraq has been trucking 2.1 million tonnes of fuel oil through Syria to its Mediterranean port of Baniyas, in what has become a successful improvised Hormuz workaround.
Why we care: Each of the nearly 1,000 trucks carries about 20 tonnes of fuel oil on an approximately 4-day drive across Syrian highways to Baniyas, where the cargo is loaded onto tankers for European buyers. Syria has gone from shipping none of the fuel to making up more than a quarter of volumes of Middle Eastern fuel oil. The math illustrates how far the region is from a sustainable alternative to Hormuz: a single shuttle tanker loading at Baniyas carries 300,000 barrels before transferring to a larger vessel offshore, while a truck carries 135. This trucking corridor is doing real work by generating transit revenue for Syria, giving Iraq an export lifeline, and demonstrating the viability of the Kirkuk-Baniyas route, in spite of the costs and inefficiencies involved.
The convoy queues, damaged roads, and border delays are significant constraints. Three Aframax vessels of Iraqi fuel oil have already reached the US. The trucking corridor is less a sustainable solution than a stopgap and proof of concept for the revival of the Kirkuk-Baniyas pipeline, which is still three years away.
One Fun Thing: New “My Syria” app launches: A group of Syrian entrepreneurs based between Dubai and Damascus has launched “My Syria,” which they describe as the country’s first integrated super app.
Why we care: The My Syria app brings together hotel bookings, transport, lifestyle services, and digital payments onto a single platform. The app aims to make traveling in Syria easier by discovering, booking, and paying for a range of services. My Syria is one of several apps, payment platforms, and booking services launching simultaneously as the country reopens, each betting that the reconstruction economy will need digital infrastructure before it needs much else. The founders’ base in Damascus and Dubai is also a part of the story: against the backdrop of growing UAE-Syria ties we have been tracking, tourism is emerging as a fast-recovering segment of the economy. In the first half of 2026, Syria welcomed 3.52 million visitors, a 111% increase year-over-year, according to Syria’s Ministry of Tourism.
As Syria rejoins the international community and gradually becomes a less uncommon destination for business and tourist travel alike, more digital connectivity will be necessary not only to link the country to the global economy, but also to facilitate movement within different parts of the country. The deepest stakes are in infrastructure, and reconstruction capital is likely to flow more easily if there is a digital payments layer to process it. Important deals we have examined, such as the JPMorgan-Qatar reconstruction facility, Citibank correspondent banking discussions, and gas exploration plans by ConocoPhillips, all require digital financial rails Syria largely lacks. My Syria is one example of the consumer end of a digital stack that is emerging and reopening the country for business.
Correction: An earlier version of our 30 July Riyalpolitik 5 edition stated that the UAE’s Country Group A:5 reclassification permitted imports of “up to 500,000 advanced AI chips annually.” In fact, the A:5 upgrade removes previous chip quotas and quantity restrictions; the 500,000-chip annual cap was a feature of the prior May 2025 US-UAE AI Cooperation Framework, which the reclassification supersedes. The text has been updated to reflect this.