MENA Strategic Bulletin – Saudi to expand alcohol access; US moves towards FTO designation of Muslim Brotherhood

Saudi plans to expand alcohol access – for some 

Press reporting this week stated that Saudi Arabia is planning to open two additional alcohol retail outlets – one within a compound of Saudi Aramco in Dhahran, for non-Muslim foreign staff, and another for non-Muslim diplomats in the consular district of Jeddah. These follow a store opened in Riyadh’s diplomatic quarter in 2024 – the first such outlet in roughly 73 years – intended to serve non-Muslim diplomats. In fact, the store’s customer base has already broadened to include non-Muslim Saudi Premium Residency holders – typically high-value investors, entrepreneurs and specialised professionals. 

No formal legislative change has been publicised, and government and Aramco spokespeople have declined to confirm details. The schedule for the new stores reportedly targets 2026 for opening, though no precise timeline has been made public.  

Regional and stakeholder impact 

Saudi Arabia’s latest move comes amid a decade of rapid social liberalisation and economic transformation. Entertainment venues, mixed-gender workplaces, and expanded cultural freedoms have reshaped life in the Kingdom’s major cities – signalling a state eager to project modernity and global integration. Yet the pace and visibility of these reforms are not welcomed by all in the Kingdom, and increasingly, two Saudi Arabias are emerging.  

The first is a conservative, largely domestic-facing society where national identity – based on traditional values – has become even more important in recent years. The other is an externally oriented Saudi Arabia seeking to appeal to expatriates, global investors, and international institutions – one that projects openness, modernisation, and business-friendly liberalisation. 

These contrasting realities are increasingly visible, especially in the Kingdom’s geography. While Saudi Arabia was already highly urbanised before Vision 2030, the reform era has sharply concentrated jobs, investment and policymaking in a few metropolitan hubs – Riyadh, Jeddah and the Dammam–Khobar–Dhahran corridor.  Average GDP per capita in these urban centres is roughly a third higher than in regional areas such as Aseer and Al-Qassim (about SAR 107,000 vs SAR 73,000). 

Urban centres serve as showcases of reform, benefitting from high government spending and international attention. In contrast, rural regions are broadly more socially conservative, but also underserved, with gaps in infrastructure, healthcare access and private investment. They command less focus than the major cities, hence migration to urban areas.  

For policymakers, these diverging realities present a complex governance challenge. The state must reassure conservative constituencies that core cultural boundaries remain intact, while simultaneously convincing global investors that Saudi Arabia is serious about openness, competitiveness and lifestyle reform. These objectives often pull in opposite directions – moves aimed at reassuring foreign investors or diplomats risk provoking conservative discontent at home, while efforts to preserve traditional norms can undermine the Kingdom’s pitch as a competitive, globally integrated economy. 

For international players, this could heighten the risk of policy ambiguity and mixed messaging, while perceptions that reforms are externally driven and unevenly distributed could cause dissatisfaction and frustration among sections of the Saudi population. For now, this seems to be a balance that the Saudi leadership is willing and content to strike; however, the disparity between urban and rural areas – and the impact of the economic and social transformation on each – is an ongoing tension that will need to be managed within the wider project.  

What’s next 

In the near term, further liberalisation on alcohol is likely to proceed in small steps, for example by expanding the categories eligible for access. Exclusions for ‘special cases’ will prevail over a nationwide policy change, keeping regulatory risk high for investors in hospitality and tourism. However, it is likely that permissions will extend to special zones such as the Red Sea resorts, which operate within their own economic zone. This means they function within a different regulatory landscape to the wider Kingdom and, as noted on the Red Sea Development Company website, can implement “relaxed social norms”.  

Regionally, the UAE, Bahrain, and Qatar already permit alcohol consumption under regulated frameworks. Saudi Arabia’s cautious entry into this space signals its ambition to compete more directly for talent, tourism, and international business. Indeed, the Kingdom offers significant opportunities for international investors compared to its smaller neighbours, given its size. However, this is a double-edged sword; the country’s massive geography, large population and role as host of two holy mosques and leader of the Muslim world means this model is the only viable solution that serves the Vision 2030 agenda while continuing to satisfy Saudi’s majority conservative population.

US Muslim Brotherhood designation – why now? 

On November 24, US President Donald Trump signed an executive order instructing the State and Treasury Departments to assess whether the national chapters of the Muslim Brotherhood (MB) in Egypt, Jordan and Lebanon should be designated as Foreign Terrorist Organisations (FTOs) and Specially Designated Global Terrorists (SDGTs). The accompanying White House statement argued that “multiple Brotherhood chapters have supported or enabled terrorist and extremist groups,” citing long-standing ties to Hamas and, in Lebanon’s case, cooperation with Hezbollah-linked actors as well. 

The announcement came one week after Texas Governor Greg Abbott’s decision to designate both the Muslim Brotherhood and the Council on American-Islamic Relations (CAIR) – the US’s largest Muslim civil rights and advocacy organisation – as terrorist organisations under state law.  

Regional and stakeholder impact 

The administration’s rationale rests heavily on the Brotherhood’s historical and structural relationship with Hamas. Hamas originated as the Palestinian branch of the MB, inheriting its organisational model, ideological framing and community-service infrastructure. US investigations and past prosecutions, such as the Holy Land Foundation case, have shown how Brotherhood-linked charities and diaspora networks funnelled financial support to Hamas-controlled entities. These links form the basis of the US assertion that certain MB chapters have facilitated militant activity or provided enabling support. 

The White House briefing also highlighted alleged cooperation between elements of Lebanon’s MB branch (Al-Jamaa al-Islamiya) and Hezbollah-linked networks. Although the two are traditionally ideological competitors, US officials claim that some MB-affiliated actors have coordinated tactically with Hezbollah elements during localised armed incidents, including limited rocket launches toward Israel. A US designation would likely disrupt the group’s fundraising pipelines, foreign remittances and social-service budgets. 

The executive order is framed as a counter-terrorism measure – which also appeals to domestic audiences on the political right – but it comes at a critical juncture in US relations with, and objectives in, the region. Egypt, the UAE, Saudi Arabia and Jordan have advocated for over a decade for Washington to classify the MB as a terrorist organisation, citing concerns the group is not merely a political opposition force but a security threat. Indeed, Trump considered a designation during his first term.  

Progressing on the issue now is a strategic decision intended to show regional allies that the US takes seriously their security concerns, while simultaneously strengthening Washington’s leverage across several files. For example, Egypt and Jordan’s cooperation is essential to any post-war arrangements in Gaza; delivering on a core ask of both governments helps to secure their support for US-driven stabilisation models and tighter control of Hamas-linked networks.  

Moving toward a US designation also demonstrates to Saudi Arabia that the US is delivering on Gulf security priorities, when Trump is looking to the kingdom for cooperation on energy, normalisation with Israel and investment in critical sectors such as artificial intelligence. Furthermore, a US designation would implicitly strengthen the bloc of regional states opposing Doha and Ankara-backed Islamist networks; Qatar and Turkey have historically supported Brotherhood-linked movements. Turkey’s MB branch is not listed, but the executive order paves the way for other chapters to be included later and in the meantime, hinders the group’s ability to coordinate across borders. 

What’s next 

The US State and Treasury Departments will deliver a joint assessment within 30 days to determine whether specific chapters meet the US legal threshold for FTO/SDGT designation. If designations proceed, sanctions would follow, including asset freezes, travel bans, and criminal liability for material support, affecting charities, NGOs, remittance networks and diaspora fundraising channels. 

Regional governments are likely to cite the US action as justification for intensifying restrictions on MB-linked groups, accelerating crackdowns already underway in Lebanon, Egypt, and Jordan – the latter two banned the Muslim Brotherhood in 2013 and 2025 respectively. However, shrinking the space for moderate Islamist political actors risks driving networks underground, potentially empowering more radical elements or encouraging violence as a means of expression.