Middle East War Pushes Gulf Monarchies to Reconsider Trillion-Dollar Investments

Several countries in the Persian Gulf are seriously considering declaring force majeure on some of their financial obligations to Western partners and potentially suspending major investment commitments. The discussions reflect growing concerns about the economic consequences of the military operation conducted by the United States and Israel against Iran, according to a report by The Financial Times.

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Dubai

The British publication reports that officials in at least three Gulf states have begun assessing how the escalating regional crisis could affect their national budgets and long-term economic plans.

Gulf Economies Evaluate Preventive Measures

Among the region's largest economies are Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar. According to the report, policymakers in several of these countries are exploring ways to soften the potential financial shock created by the conflict.

Sources cited by The Financial Times did not identify the specific states involved in the discussions but confirmed that governments are examining possible "preventive measures.”

According to one official familiar with the situation, internal reviews have already begun in several Gulf monarchies. Legal and financial teams are studying whether existing contracts allow governments or sovereign funds to invoke force majeure clauses if regional instability intensifies.

Investments and Financial Commitments Under Review

Authorities are also reassessing current and future investment commitments to protect national budgets from the rising financial burden created by the conflict.

These commitments include sovereign wealth fund investments, sponsorship of major international sporting events, and commercial agreements with foreign companies. The possibility of selling assets has also been discussed, although sources say that remains the least likely option for now.

According to The Financial Times, the measures currently being examined represent contingency planning rather than immediate action. However, economic pressure is already visible. Revenues from oil and gas have declined, while tourism and aviation activity have weakened. At the same time, defense spending is rising across the region.

Signal Sent to Washington

An adviser connected to one Gulf government acknowledged that even discussing a possible revision of investment commitments has already sent a signal to Washington. The message carries weight because the region's sovereign wealth funds rank among the largest investors in the world, allocating hundreds of billions of dollars across global markets.

During his foreign tour in May 2025, Donald Trump announced that the United States had secured investment agreements with Persian Gulf states worth more than two trillion dollars.

According to statements made at the time in Washington, Saudi Arabia committed to projects totaling roughly 600 billion dollars. These included defense contracts, investments in artificial intelligence, and funding for data centers.

The United Arab Emirates pledged to invest around 1.4 trillion dollars over the next decade in similar areas, including artificial intelligence infrastructure, data centers, agreements with Boeing, and energy development projects.

Qatar Airways also planned to purchase aircraft from Boeing in deals estimated at approximately 200 billion dollars. In addition, the Qatari government signaled plans for defense contracts valued at roughly 40 billion dollars.

European Investments Also at Risk

The potential reassessment concerns not only agreements with the United States but also investment plans in Europe. Although smaller than the American deals, these commitments remain significant.

For example, Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), had planned to expand its investments in Europe to around 170 billion dollars by 2030. Between 2017 and 2024, the fund invested approximately 85 billion dollars in British, Italian, and French assets.

Meanwhile, Abu Dhabi's national oil company ADNOC, recently rebranded as XRG, received approval from German and European authorities to acquire the German chemical giant Covestro for 14.7 billion euros.

These plans are now under review. For the moment, they remain theoretical scenarios, but analysts believe there is a growing possibility that Gulf states could scale back or postpone overseas investments if regional tensions continue to escalate.