Gulf States Reevaluate US Investments as Iran Conflict Escalates
Gulf states are reassessing billions of pounds’ worth of investment commitments to the United States as the Iran war tears through their energy infrastructure, tourism sectors and defence budgets. The Financial Times reported on 5 March 2026 that Saudi Arabia, the United Arab Emirates, Qatar and Kuwait have begun an internal review of existing and future financial agreements with Washington, including examining whether force majeure clauses can be legally invoked.
The development carries enormous consequences for the global economy: these four nations collectively control some of the world’s largest sovereign wealth funds and, during Donald Trump’s Gulf tour in May 2025, pledged hundreds of billions of dollars in US investments, agreements now under quiet but serious scrutiny.
The Financial Pressure Behind the Review
A Gulf official told the Financial Times that three of the four big Gulf economies: Saudi Arabia, the UAE, Kuwait and Qatar, had jointly discussed the strains being put on their budgets and economies. The official declined to name the specific states. The language used in that briefing was precise in a way that matters: an internal review is not a withdrawal, and a discussion is not a decision. But the direction of travel is clear.
The official said: ‘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. Especially if the war and related expenses continue at the same pace.’
Force majeure, a legal term meaning ‘superior force,’ allows parties to suspend contractual obligations when extraordinary events outside their control make fulfilment impossible. Its invocation in sovereign investment agreements would be without modern precedent in the Gulf’s relationship with Washington.
Any move affecting investments in the US or other Western countries could increase pressure on Trump to pursue diplomatic efforts to end the conflict. That pressure is already building in other quarters. Khalaf Ahmad Al Habtoor, the Emirati billionaire and founding chairman of Al Habtoor Group, became the first high-profile Gulf businessman to publicly condemn Trump over the war on 5 March 2026, asking in an open letter on X: ‘Who gave you the authority to drag our region into a war with Iran?’ Al Habtoor pointedly questioned whether the billions Gulf states had contributed to Trump’s Board of Peace initiative were ‘supporting peace efforts or financing a war that exposes the region to danger.’
Energy Infrastructure Under Fire
The economic anxieties driving the investment review are rooted in physical damage that cannot be overstated. On 2 March 2026, Iranian drones struck QatarEnergy’s operating facilities at Ras Laffan Industrial City and Mesaieed Industrial City. The world’s largest LNG producer stated: ‘Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of liquefied natural gas and associated products.’
QatarEnergy subsequently declared force majeure on LNG shipments, informing affected buyers that contractual deliveries could not be guaranteed after the disruption forced the company to halt LNG output and associated products.
‘Further to the announcement by QatarEnergy to stop production of liquefied natural gas and associated products, QatarEnergy has declared Force Majeure to its affected buyers,’ the company said in a statement. The consequences were immediate and global. Shortly after the announcement, benchmark Dutch and British wholesale gas prices soared by almost 50%, while benchmark Asian LNG prices jumped almost 39%.
About 20% of global LNG trade transited the Strait of Hormuz in 2024, primarily from Qatar, according to the US Energy Information Administration. With the strait now effectively blocked, as of 5 March 2026, approximately 1.056 million metric tons of LNG loaded on 13 vessels was stranded in the Persian Gulf west of the Strait of Hormuz, according to ship-tracking data from Kpler, Qatar has no alternative export route.
Unlike Saudi Arabia, which can reroute crude via its east-west pipeline to Red Sea terminals, Qatar accounts for 93% of all LNG traffic through the strait, according to S&P Global, and has no other viable export path.
Saudi Arabia’s energy infrastructure has also taken hits. On 2 March 2026, Iranian drones targeted the Ras Tanura refinery, Saudi Aramco’s largest domestic facility, which processes 550,000 barrels per day. The state-run Saudi Press Agency, quoting defence spokesperson Major General Turki Al-Maliki, reported that ‘the refinery was targeted in an attempted drone attack.’
Debris from two intercepted drones fell on the facility, causing a fire that was quickly contained. Aramco halted production at Ras Tanura out of security concerns and began working on creating alternate routes for oil product exports. Saudi Arabia’s eastern province, home to Ghawar, the world’s largest conventional oilfield, as well as Abqaiq and Khurais, now sits in the direct line of Iranian drone fire.
A Region Pulled In Against Its Will
The Gulf states’ predicament is, in the bluntest terms, one of geography and dependency. All six members of the Gulf Cooperation Council: Kuwait, Bahrain, Saudi Arabia, Qatar, Oman and the UAE, host US military assets, making them simultaneously allies of Washington and targets of Tehran’s retaliation.
The UAE’s Minister of State for International Cooperation Reem Al Hashimy said in a press conference in Abu Dhabi that the GCC operates as ‘one system,’ and that an attack on any member state endangers the entire region. Qatar, Kuwait, Bahrain and the UAE all temporarily closed their airspace and condemned Iran’s attacks on their territories.
Sea vessels operating in the Gulf said they had received messages on the closure of the Strait of Hormuz, according to the UK Maritime Trade Operations agency, cited by Reuters.
The Gulf states have not yet made any public statement confirming a formal withdrawal from any investment agreement with the United States. But when governments of this size begin reviewing force majeure clauses in contracts they signed as gestures of strategic partnership, the message to Washington is already written, even if it has not yet been delivered.
Originally published on IBTimes UK
