Gulf States’ U.S. Investment Plans Face Pressure Amid Iran War

The ongoing conflict between the United States (U.S.) and Iran could make it harder for Saudi Arabia, Qatar and the United Arab Emirates to deliver on nearly $4Tn in economic commitments to the U.S. announced under President Donald Trump’s “America First” agenda.
The Gulf states are facing growing economic pressure from the war, including the need to spend more on defence, energy infrastructure and trade, potentially diverting financial resources away from previously announced U.S. investments.
The conflict has weakened their fiscal positions and economic prospects, with the International Monetary Fund (IMF) cutting its 2026 growth forecasts significantly. Qatar’s forecast was reduced by 14.7 percentage points to 8.6%, while Saudi Arabia and the UAE’s forecasts were both lowered to 1.7%, from 4.5% and 5.6%, respectively.
While Gulf governments have sufficient financial assets and borrowing capacity to avoid an immediate funding crisis, mounting economic pressures could encourage them to prioritise domestic investment over U.S. commitments. Saudi Arabia had already begun rebalancing toward domestic investment before the war, with its Public Investment Fund reducing the share of its portfolio allocated to international investments to 20% from 30% in 2020.
The potential consequences of delayed commitments were highlighted earlier this year when President Trump threatened to raise tariffs on South Korean goods over delays in implementing its U.S. investment agreement. South Korea is now reportedly close to a potential energy investment deal worth more than $100Bn to support the expansion of artificial intelligence infrastructure in the U.S.
Against this backdrop, delays in fulfilling the Gulf states’ investment commitments could lead to additional pressure from the White House, while political concerns in the U.S. surrounding Gulf investments, governance and potential conflicts of interest could further complicate implementation.

(Source: Aljazeera)