RIYADH: Saudi Arabia’s merchandise trade data for May 2026 tells two very different stories at once. Oil revenues are booming. Non-oil commerce with neighboring Gulf states is shrinking, and the gap between those two realities is widening fast.
The sharpest sign of strain came in the Kingdom’s non-oil trade surplus with Gulf Cooperation Council partners, which collapsed to SR2.01 billion ($536 million) in May, down 55 percent from the same month a year earlier. Non-oil exports, including goods Saudi Arabia re-exports from other countries, fell 24 percent to SR9.11 billion. Imports dropped a more modest 6 percent to SR7.10 billion. The overall volume of non-oil merchandise trade between Saudi Arabia and the GCC consequently shrank 17.2 percent to SR16.22 billion.
The UAE sits at the center of Saudi Arabia’s regional trade network, accounting for 73.4 percent of the Kingdom’s non-oil commerce with the GCC. That relationship deteriorated substantially in May. Saudi non-oil exports to the UAE fell 27.7 percent to SR6.67 billion, even as imports from the UAE rose 3 percent to SR5.24 billion. The bilateral trade surplus collapsed 65.5 percent, sliding from SR4.13 billion in May 2025 to just SR1.42 billion this year. Of the SR6.67 billion in exports to the UAE, SR5.32 billion consisted of re-exports, while national Saudi exports reached SR1.35 billion.
Re-exports are a significant pillar of the Kingdom’s regional trade strategy. In May they accounted for roughly 67 percent of Saudi non-oil exports to GCC markets, totaling SR6.11 billion, against SR3 billion in nationally produced goods. The GCC absorbed about 39.8 percent of Saudi Arabia’s total non-oil exports during the month and supplied approximately 10.5 percent of its merchandise imports.
Performance across other Gulf partners was mixed. Trade with Kuwait totaled SR1.55 billion. Saudi exports there rose 36.1 percent to SR1.01 billion, but imports surged more than four-fold to SR540.5 million, narrowing the Kingdom’s surplus by 24 percent to SR464.9 million. Relations with Bahrain shifted into deficit territory entirely: Saudi Arabia moved from a SR155.2 million surplus in May 2025 to a SR196 million deficit this year, as exports to Bahrain fell 48 percent to SR514 million while imports declined a more limited 14.8 percent to SR710 million.
By contrast, the trade deficit with Oman shrank dramatically, narrowing 97.7 percent to SR20.9 million from SR914.4 million a year earlier. Imports from Oman fell 62.6 percent to SR537 million, while exports edged down just 1.3 percent to SR516.1 million, bringing total bilateral trade to SR1.05 billion. Trade with Qatar totaled SR487.4 million and generated a Saudi surplus of SR338.5 million, though that surplus contracted 29.5 percent as exports fell 25.6 percent to SR413 million and imports held essentially flat at SR74.5 million.
Meanwhile, the headline trade picture looks strikingly different. Saudi Arabia’s overall merchandise trade surplus surged 328.8 percent year on year to SR26.03 billion in May, as total exports rose 3.9 percent to SR93.78 billion and imports fell 19.5 percent to SR67.75 billion. Oil exports increased 19.5 percent and now represent 75.6 percent of total exports, up from 65.7 percent a year earlier. That shift underscores the Kingdom’s deepening reliance on petroleum sales to carry its trade balance.
Non-oil exports (including re-exports) fell 26.1 percent overall. National non-oil exports dropped 27.3 percent; re-exports declined 24.4 percent. The ratio of non-oil exports to imports slipped to 33.8 percent from 36.8 percent, a quiet indicator of the sector’s eroding competitiveness. The data, preliminary figures from the General Authority for Statistics, are available at https://www.arabnews.jp/en/business/article_175729/
Whether the non-oil sector can reverse that slide, or whether oil revenues will continue to mask the weakness, is the question Saudi trade watchers will be tracking through the second half of 2026.