Saudi Arabia and Syria sign defence pact and $403 million in loans in Riyadh

Saudi Arabia and Syria signed a defence cooperation agreement and more than $403 million in Saudi loans on Wednesday 4 November, as Syrian President Ahmed al-Sharaa made his second visit to Riyadh in less than a month, Al Jazeera reported. Crown Prince Mohammed bin Salman oversaw the signings with him.

At today's rate of about Rs 276.70 to the dollar, the loans are worth roughly Rs 111.5 billion (see the dollar rate page).

Where the money goes

The Saudi Fund for Development agreed six loans with Syria's finance ministry on concessional terms, the Saudi Press Agency said. Five of them were itemised:

The two sides also signed memorandums on industry, agriculture and environmental protection.

The defence deal

Syria's foreign ministry called the agreement between the two defence ministries the "most notable" of the deals but did not publish its terms. Syrian Foreign Minister Asaad al-Shaibani said at the Manama Dialogue in Bahrain on Saturday that talks were under way on Syria joining what he called the Mecca alliance. Pakistan is already part of that Saudi-led defence pact, which we wrote about in September.

The pact comes as Saudi Arabia fights a renewed war with Yemen's Houthis, who have attacked Saudi airports and oil facilities, and has sought defensive and offensive help from the US, Europe and the region.

In their talks, the two leaders called for de-escalation and an "immediate cessation" of attacks on shipping in the Red Sea, the Bab al-Mandeb strait and the Strait of Hormuz.

Why it matters here

Shipping through Hormuz and the Red Sea carries most of the oil and LNG Pakistan imports, and any easing there feeds through to freight costs and fuel prices. Saudi Arabia is also Pakistan's biggest source of remittances and a key lender: Riyadh rolled over its $3 billion deposit with the State Bank again this week. Track petrol on our petrol price page.

Saudi Arabia has backed Syria's government since al-Sharaa came to power after Bashar al-Assad was overthrown in December 2024. The two leaders last met in Riyadh on 6 October, when they discussed rebuilding Syria's infrastructure.