Gulf states are reviewing overseas investments and financial commitments as the war involving the United States (US), Israel and Iran places pressure on their budgets, an international media outlet has reported. 

A Gulf official said that the situation could affect investment pledges to foreign governments or companies, sports sponsorships, business contracts and the sale of existing holdings.

 

The official said that three of the four major Gulf economies — Saudi Arabia, United Arab Emirates (UAE), Kuwait and Qatar — had held discussions on the economic impact of the conflict but did not identify the countries involved.

“A number of Gulf countries have begun an internal review to determine whether force majeure clauses can be invoked in current contracts, while also reviewing current and future investment commitments in order to alleviate some of the anticipated economic strain from the current war,” the official said. “Especially if the war and related expenses continue at the same pace.”

They added that the move was precautionary and linked to “the budget strains these countries are facing due to reduced income from energy, due to the slowdown in output or the inability to ship, [and from the] tourism and aviation sectors, in addition to the increase in defence spending”.

An adviser to a Gulf government said that the possibility of an investment review had drawn attention in Washington. Gulf states manage some of the world’s largest sovereign wealth funds, and Saudi Arabia, United Arab Emirates and Qatar last year pledged to invest hundreds of billions of dollars in the US after Donald Trump visited the region.

The states have also financed international sporting events and invested in domestic projects aimed at diversifying their economies.

Officials said that any reduction in investments in the US or other western countries could increase pressure on Donald Trump to pursue a diplomatic approach to end the war.

The conflict between the US, Israel and Iran has affected Gulf countries as Tehran launched strikes against Washington’s regional allies. 

Shipping traffic has slowed in the Strait of Hormuz, through which about one-fifth of global oil and gas supplies pass, with at least 10 tankers reported damaged in the Gulf.

 

Qatar, the world’s second-largest liquefied natural gas producer, declared force majeure after suspending production following a drone attack on its main LNG facility.

 

A major oil refinery in Saudi Arabia was also hit during the conflict.

 

Iran has also targeted US bases and embassies in the region, as well as airports, hotels and residential buildings, disrupting air traffic and tourism.

 

Gulf states had urged Donald Trump to delay military action and pursue diplomacy with Iran but later faced retaliatory attacks from Tehran.

Khalaf Al Habtoor, a prominent Emirati businessman addressed Donald Trump in a post on X and criticised the decision to escalate the conflict.

“A direct question: Who gave you the authority to drag our region into a war with #Iran? And on what basis did you make this dangerous decision?” he wrote. “Did you calculate the collateral damage before pulling the trigger?”

He pointed out that Gulf countries were expected to help finance plans to rebuild Gaza and support broader regional initiatives.

He added that Arab Gulf states had “contributed billions of dollars on the basis of supporting stability and development”, asking: “These countries have the right to ask today: where did this money go? Are we funding peace initiatives or funding a war that exposes us to danger?”