South Korea is strengthening business and economic ties in the Middle East, signing deals for electric vehicle manufacturing, digital development, energy, infrastructure and shipbuilding as it seeks fresh opportunities in a region it heavily depends on for oil and gas.

The push is led by President Yoon Suk Yeol, who followed up a visit to the United Arab Emirates in January with a trip to Saudi Arabia and Qatar this week — just as geopolitical tensions nearby spike in a stark reminder of the broader area’s potential for instability.

The government announced that South Korean and Saudi Arabian companies signed 46 deals at an investment forum in Riyadh, an event held on the sidelines of Yoon’s state visit to the desert kingdom. The Federation of Korean Industries said that 135 South Korean business leaders participated in the forum.

The agreements include a $500 million contract between Hyundai Motor and the Public Investment Fund (PIF). The car giant and PIF decided to set up a joint venture to construct a plant in Saudi Arabia to produce 50,000 vehicles — both internal combustion engine and electric — annually from 2026. The plan marks the global automaker’s first assembly lines in the Middle East.

“Hyundai Motor decided to build an EV factory, symbolizing a new era in which Korea and Saudi Arabia jointly develop technology and produce products,” Yoon told students at King Saud University. “I hope that Korean and Saudi youth can play key roles for change. If Saudi youth want to study in Korea, we will clear the way for you.”

Naver, South Korea’s top internet and e-commerce company, signed a $100 million deal with the Saudi government to establish a digital platform for five cities in the kingdom, including the capital Riyadh, in its first large-scale project in the Middle East.

South Korea has become a major arms exporter in recent years and while no military-related deals were announced, Yoon’s office said the two countries are finalizing large-scale industry cooperation in anti-missile defense and artillery weapons. It described the deal’s size and amount as “quite big” but declined to elaborate.

In Qatar, HD Korea Shipbuilding & Offshore Engineering won a $3.9 billion order from state-owned QatarEnergy for 17 liquefied natural gas (LNG) carriers, the biggest single deal ever in the country’s shipbuilding industry. The vessels will be made in major South Korean port Ulsan by HD Hyundai Heavy Industries, a shipbuilding unit of HD KSOE, for delivery to the Gulf monarchy by 2029.

Yoon’s visit came as regional tensions intensify amid fighting between Israel and Gaza-based militant group Hamas. But South Korean experts say Saudi Arabia — a major Middle Eastern power — and most other countries in the region are stressing economic development over politics, which is providing an opportunity for South Korean companies.

“Now, the region looks confused because of the conflicts, but Saudi Arabia, the UAE and other countries in it are focusing on economic pragmatism,” said Jang Ji-hyang, a senior fellow at the Asan Institute for Policy Studies. “The Middle East welcomes South Korea’s investment because it is in their key interests.”

For example, Jang said that Saudi Arabia is pushing its Neom project — a futuristic, $500 billion urban development aimed at building a smart megacity in the country’s northwest — and also pointed out that the UAE sent an orbiter to Mars.

Such ambitions are a good match for South Korea, which excels in construction and technology and has its own space program. Last year, it successfully launched its first lunar orbiter, the Danuri, which rode on a SpaceX Falcon 9 rocket. The country aims to send a lander to the moon via a domestic rocket by 2031.

South Korea’s companies are not strangers to the Middle East. Its construction businesses are active there, as are those in oil, gas and energy. Electronics companies and automakers Hyundai and affiliate Kia export there. Countries such as Saudi Arabia and Qatar, meanwhile, supply oil and LNG to South Korea, a resource-poor nation dependent on such commodities to fuel its high-tech industrial economy.

According to Korea International Trade Association data, trade with Saudi Arabia totaled $46.5 billion in 2022. South Korean exports to the kingdom soared 46.3% year-on-year to $4.9 billion while imports jumped 71.6% to $41.6 billion, resulting in a substantial deficit. For the entire Middle East, overall trade totaled $126.9 billion last year, up 57.1% and marking a deficit of $91.9 billion.

Experts say that the Yoon government’s push comes as Saudi Arabia’s energy sway has increased since Russia’s invasion of Ukraine.

Also this week, state-run Korea National Oil Corp. signed a five-year contract that allows Saudi Aramco to store 5.3 million barrels of crude oil in Ulsan. KNOC has the option to buy the oil in case of emergencies.

Ryou Kwang-ho, a senior researcher at the state-run Korea Institute for International Economic Policy, said that the kingdom plans to diversify its business portfolio beyond oil, offering further business opportunities for South Korea.

“It matters to have close relationships between the governments because the Saudi government leads the country’s economic development rather than private sectors,” he said.

Earlier this month, South Korea reached a free trade agreement with the UAE in Seoul. The UAE will eliminate tariffs on South Korean cars in 10 years, while Seoul will remove levies on crude oil from the UAE over that time.

Saudi Arabia appeared satisfied with the flurry of deals and highlighted how working with South Korea could help boost its own auto ambitions.

“Partnering with Hyundai is another significant milestone for PIF in successfully enabling and accelerating the growth of Saudi Arabia’s automotive ecosystem — one of our 13 priority sectors,” Yazeed Al-Humied, deputy governor and head of Middle East and North Africa investments at PIF, said in a statement.

Saudi Crown Prince Mohammed bin Salman told Yoon he hopes they can ride together in a Hyundai EV produced in the kingdom the next time the president visits, according to Yoon’s office, as he drove his guest around in a Mercedes-Benz.

The crown prince last November visited Seoul, where contracts and preliminary agreements were signed with Samsung, Hyundai and other conglomerates for investments in the kingdom, including the Neom project.

At that time, Saudi Arabia’s Ministry of Investment inked a memorandum of understanding with Hyundai Rotem, a Hyundai Motor unit focused on railways and defense, to cooperate in building railways for Neom, as well as to develop hydrogen-powered trains.

Separately, PIF agreed with construction and engineering company Samsung C&T, part of the Samsung Group, to help build the kingdom’s new Qiddiya and Red Sea cities. Samsung C&T will use its state-of-the-art 3D modular construction engineering technology in those projects.

South Korean media raised questions this week over Middle East stability, but also expressed hopes for boosting the country’s sluggish economy, which the Bank of Korea has projected will grow 1.4% this year, slowing from 2.6% in 2022.

“Geopolitical risks remain in the Middle East,” Maeil Business News Korea, said in an editorial. “And it is true that there are some doubts over the Neom city project. However, cooperation with Saudi Arabia can be a breakthrough for a Korean economy that is facing a low-growth crisis due to weak potential for expansion.”

Yoon, for his part, chose to focus on business and largely steered clear of politics.

“[South Korea] will play necessary roles and contribute to stability and peace in the region,” he said in a meeting with the Saudi crown prince.