Saudi Arabia surpassed India to become the world's top importer of defense equipment in 2014, according to IHS, as global defense trade rose for the sixth straight year to $64.4 billion, up from $56.8 billion.
"Defense trade rose by a landmark 13.4 percent over the past year," said Ben Moores, senior defense analyst at IHS Aerospace, Defense & Security. "This record figure has been driven by unparalleled demand from the emerging economies for military aircraft and an escalation of regional tensions in the Middle East and Asia Pacific."
Saudi Arabian imports surged 54 percent on year in 2014, and are forecast to rise by 52 percent to $9.8 billion this year, based on planned deliveries, IHS said.
This means that one out of every seven dollars spent on defense imports in 2015 will be spent by Saudi Arabia.
The U.S., the world's top supplier of defense equipment, accounted for one-third of all exports last year and was the main beneficiary of strong Middle Eastern demand, IHS said.
America's Boeing, Lockheed Martin and Raytheon, Europe's Airbus Group and Russia's United Aircraft Corporation (UAC) are the top five company exporters globally.
While Russian exports rose 9 percent to $10 billion in 2014, industry exports now face challenging times.
"A drop off in exports is forecast for 2015 as major programs draw to a close, a trend that could be accelerated by sanctions. Furthermore, falls in the oil price are set to have a devastating impact on some lead Russian clients who are vulnerable to low oil prices, such as Venezuela and Iran," IHS said.
"This problem is compounded as Chinese industry becomes increasingly less dependent on Russian technology," it added.
China jumped two spots to become the world's third largest defense importer last year.
The country's defense budget is still growing at a robust pace and, more than doubling since 2008, according to IHS.
Earlier this month, Beijing announced its defense budget would increase by 10.1 percent to 886.9 billion yuan ($141.6 billion) for 2015.
"Despite the increases, it's important to remember that Chinese defense spending remains relatively low compared to the size of its economy, particularly when you consider the country's position in the world," said Craig Caffrey, senior defense budget analyst at IHS Aerospace, Defence & Security.
"France, the U.K. and the U.S. all spend considerably more on defense as a proportion of GDP (gross domestic product)."