I'm newer to oVirt and may be leading you astray, but have you looked at the 
OLVM docs for setting up the self-hosted engine in offline mode?  
https://docs.oracle.com/en/virtualization/oracle-linux-virtualization-manager/getstart/getstarted-he-deploy-noaccess.html

It's Oracle Linux, not RHEL, but were are doing something similar in that our 
self hosted environment does not have access to the public repositories.  As 
such, we've created custom repos and repoint to those, so not completely air 
gapped.  

"hosted-engine --deploy --ansible-extra-vars=he_pause_before_engine_setup=true" 
does seem to work now, but originally we had to run the setup in tmux and pause 
the deployment just before the initial OLVM instance attempted to download 
packages else the whole deployment would fail.  "hosted-engine --deploy 
--ansible-extra-vars=he_pause_before_engine_setup=true" will pause the 
deployment.  At that point you ssh into the new OLVM instance's temporary NAT 
address and update the repo list.
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