Saudi Arabia

What does the map enable, and what does it threaten?

The map gives Saudi Arabia vast oil and two coasts, and the second coast has proved its worth. When the Strait of Hormuz was blocked after 28 February, Gulf producers had to shut vast volumes of output¹³, but Saudi Arabia could route crude to Yanbu on the Red Sea, which most Gulf states cannot. Even so, production fell to around 8 million barrels a day after the Safaniya and Zuluf offshore fields were shut¹³. The same map leaves it exposed on two fronts: Iran across the Gulf, and Yemen on its southern border, from which the Houthis have struck Riyadh's main airport and a power station in Madina^18,17. Rich ground, with enemies on two sides.

Is the population growing, skilled and staying?

Saudi Arabia's people are young, with a median age near 30², and more of them are working. Unemployment among Saudi nationals fell to 6.4% in early 2026 and was 6.5% in the second quarter^21,4. But the quality of schooling lags far behind the money spent. In PISA 2022, Saudi students scored 389 in mathematics, up 16 points since 2018 but still below the international average and a long way behind the best performers⁸. Only 49% of Saudi nationals take part in the labour force²¹. Improving, but from a weak base.

What habits does the society reward?

The habits that build a modern economy are spreading, but unevenly. Public integrity is middling: Saudi Arabia scored 57 on Transparency International's 2025 index, down two points, and ranked 45th of 182⁷. Fitch still counts governance indicators as a constraint on its rating⁶. Schools are improving slowly from a low base⁸, and more nationals are in work than a few years ago²¹. Comparable data on trust and work habits is thin, hence low confidence. This score is about institutions and social habits, not about any group.

Who rules, how are they chosen, and are they competent?

Judged by deeds, the leadership has a mixed record. Vision 2030 has produced real results: non-oil exports, including re-exports, rose 18.9% in 2025⁹, and Saudi unemployment has fallen to about 6.4%²¹. In the war it acted well, rerouting crude through Yanbu and rebuilding output by 2.1 million barrels a day in September¹⁴. It also built a mutual defence pact with Turkey and Pakistan¹⁶. But it overreached on gigaprojects: NEOM's budget now sets aside 60 billion riyals to pay contractors to terminate agreements, and work on The Line has been halted¹². The 2026 deficit is now estimated at 245 billion riyals, against 165 billion budgeted¹¹. Capable in a crisis, costly in its ambitions.

Is there rule of law, low corruption and predictability?

Inside its borders the state keeps firm control, and the financial system has held through the war: Fitch says the banking sector stayed resilient without central bank support⁶. Clean government is another matter. Saudi Arabia scored 57 on Transparency International's 2025 index, down two points, ranking 45th of 182⁷, and Fitch counts governance indicators as a constraint⁶. Power is concentrated in the leadership rather than spread across independent institutions, so order depends on the people at the top. The Houthi strikes on Saudi airports are a security failure more than a breakdown of internal order¹⁸. Firm control, weak institutional checks.

Where are the fault lines, and how stable are they?

Reliable data on social cohesion in Saudi Arabia is scarce, because open political debate and independent polling are limited; hence low confidence. What can be observed is mixed. The state has drawn more nationals into work, with Saudi unemployment down to 6.4% in early 2026²¹, easing one source of discontent among the young. Attacks on the kingdom and the holy cities have drawn a call for solidarity from the leadership and its allies¹⁷. But only 49% of Saudi nationals take part in the labour force²¹, and the social changes of Vision 2030 are recent. Stable on the surface, hard to measure beneath it.

Why does the world need this country?

The world needs Saudi oil. Before the war it supplied 10.1 million barrels a day to the market¹³, and the 2026 shock showed how much that supply matters. The IMF puts its 2026 GDP at about US$1.3 trillion³. China is its largest trading partner, taking 14.6% of its merchandise exports and supplying 27.5% of its imports⁹. Its wealth buys influence: it hosts the secretariat of the new Mecca Defence Alliance¹⁶. What holds the score down is that its weight still rests largely on one commodity, and Fitch says oil dependence continues to constrain its rating⁶.

What does it need, want and fear?

Need: secure export routes for its oil, through Hormuz or around it via Yanbu¹³; protection of its cities and the holy sites from missile and drone attack^18,17; and the fiscal room to finish its economic transformation¹¹. Want: a diversified economy with growing non-oil exports⁹; a regional security order it can shape through the Mecca Defence Alliance¹⁶; and continued access to China, its largest trading partner⁹. Fear: a prolonged war that keeps the Gulf disrupted; a Houthi campaign it cannot stop; a sustained fall in oil revenue that drains its buffers⁶; and the cost of unfinished gigaprojects¹².

Who are its patrons, rivals and hedges?

Saudi Arabia has long relied on the United States for security while trading most with China⁹. The Iran war has shown the limits of that arrangement. Gulf exports were choked when Hormuz was blocked¹³, and in October the Houthis struck Saudi airports repeatedly, with 19 killed and 364 injured according to the Saudi-led coalition¹⁸. Riyadh and its partners condemn the attacks as hostile and hold the Houthis accountable¹⁹; Tehran denies any role and offers to mediate²⁰. Riyadh is diversifying: in August it signed a pact with Turkey and Pakistan treating an attack on one as an attack on all¹⁶, and in October the three agreed on the rapid deployment of forces in Saudi Arabia¹⁷. Rich, but pressed from two directions.

Can it deter, or does it depend on others?

Saudi Arabia spends heavily on arms: SIPRI puts military spending at 6.48% of GDP in 2025, among the highest shares in the world⁵. Results lag the money. Its defences could not stop Houthi strikes on Riyadh's King Khalid International Airport, targeted 20 times in October¹⁸, or on a power station in Madina that supplies the Prophet's Mosque¹⁷. It has turned to allies: Pakistan and Turkey agreed to deploy forces in the kingdom under the Mecca pact¹⁷, though the alliance has no integrated command or standing force like NATO's¹⁶. Big budgets, modest results; readiness data is limited, hence medium confidence.

Rising, stagnant or declining, and how fast?

Judged by results, 2026 is a bad year, though not a collapse. Real GDP fell 4.8% year on year in the second quarter as oil activity slumped¹⁰. The IMF expects the economy to shrink 3.3% in 2026 after growing 4.6% in 2025³, and the finance ministry now estimates the 2026 deficit at 245 billion riyals, well above the 165 billion budgeted¹¹. Recovery has begun: crude output rebounded to 8.372 million barrels a day in September¹⁴, and exports were close to prewar levels in early October¹⁵. The ministry forecasts 12.8% growth in 2027¹¹, but that depends on peace in the Gulf. Fitch kept its A+ rating in July, judging the public finances resilient to the war⁶. Down this year, with the rebound still to be earned.