DONALD Trump’s sweeping new tariffs could be the final nail in the coffin for Saudi Arabia’s Neom.
The wildly ambitious, scandal-plagued mega-city is now — with a projected price tag of £6.9trillion ($8.8tn).
Neom was originally hyped as a £396.5 billion ($500bn) crown jewel of ’s Vision 2030 plan.
It was supposed to be the futuristic city of dreams.
But flying taxis, ski resorts in the desert, and the 105-mile (170-kilometre) is currently looking more like a monument to hubris, mismanagement, and economic overreach.
And are making things a whole lot worse.
While headlines have focused on new US-Saudi trade tensions, experts say it's not just direct tariffs in play – it's every single part of the global supply chain for Neom that touches the .
With slapping hefty levies on and other major trading partners, components and materials moving through American ports are being hit with multiple rounds of tariffs – choking Neom’s already sputtering logistics.
Last week, oil prices plunged 11 per cent after tariff threats triggered a global stock market selloff.
Brent crude tumbled to £50.90 ($64.21) a barrel, while West Texas Intermediate fell to £48.12 ($60.70) – levels not seen since 2021.
For oil-dependent , that spells deep trouble.
“Non-oil revenue has risen, but spending has risen more quickly as the kingdom has stepped up its development plans,”; warned Simon Williams, HSBC’s chief economist for the Middle East.
“That inevitably means the budget is more oil-revenue reliant than it has been in the past.”;
Now Saudi Arabia, with its wealth inextricably linked to oil revenues, faces mounting pressure to raise debt or cut spending after the plunge in crude prices.
Tariffs up, oil down, soaring costs
Neom's skyrocketing costs have already raised eyebrows.
According to a bombshell audit seen by the Wall Street Journal, the anticipated cost has surged twentyfold to £6.9trillion ($8.8tn), New Civil Engineer reports.
The internal audit – backed by McKinsey & Co. – found that “executives at Neom based Neom’s plan on unrealistically positive assumptions”; and uncovered “evidence of deliberate manipulation”; by “certain members of management.”;
With oil revenues tanking and tariffs squeezing the global economy, the House of Saud is now facing a budgetary black hole.
Economists at Abu Dhabi Commercial Bank warned: “A sharper and sustained fall in the oil price would require a deeper retrenchment in government spending to contain the size of the shortfall and the building in government debt.”;
is already staring down a £20.62billion ($26bn) budget deficit for 2025 and has raised £14.59 billion ($18.4bn) in debt so far this year.
But even that won't come close to covering Neom's ballooning bill.
The Saudi sovereign wealth fund – the project’s primary backer – has £733.52 billion ($925bn) in assets.
But with a GDP of £872.3 billion ($1.1tn) and oil accounting for over 60 per cent of government revenue, the numbers no longer add up.
A scandal-ridden project
Satellite images analysed by Naraspace and ESA show construction slowing across key Neom sites.
While the , vast swathes of the project are going dark – literally.
Nighttime light intensity, used as a proxy for construction activity, has plummeted in the eastern development zones since last September.
Bloomberg reports Saudi officials now believe just 2.4 kilometres of the 170-km Line will be built by 2030.
The original goal of housing 1 million people by then? Slashed to 300,000.
Civil engineering firms involved – including Mott MacDonald, Bechtel, and Aecom – have gone quiet.
Even when awarded contracts, many didn’t publicly acknowledge them.
The Neom project has also been
An ITV alleged 21,000 migrant workers have died since 2016 under the Vision 2030 programme.
A Saudi and safety body dismissed the documentary as “misinformation.”;
In November 2024, amid damning reports of abusive behaviour.
According to the Wall Street Journal, Al-Nasr once told a colleague to “walk into the desert to die”; so he could “urinate on his grave.”;
He also allegedly threatened to shoot staff over a PR mishap.
, attempted murder and drug crimes riddling the hellish migrant camps for construction workers.
A Neom mirage
For now, insists Neom is simply entering “a new phase of delivery.”;
But the facts suggest otherwise.
With crude prices low, foreign investment shrinking, and the US waging a new tariff war, the financial foundation of the desert dream is evaporating.
Aramco, the kingdom’s oil cash cow, just slashed dividends by nearly a third – down from £98.41 billion ($124bn) to £67.72 billion ($85.4bn).
The final vision of a clean, green, high-tech wonderland where residents zip between mirrored towers in air taxis is starting to look more like fiction than reality.
And if tariff war continues to spiral, Neom could be dead in the sand before it’s even begun.
