Pressure on the Gulf states’ budgets could lead them to reassess their overseas investments and future commitments as they consider options to alleviate the financial strain caused by the US-Israeli war against Iran, reported Financial Times on Friday.
A Gulf official said it could have an impact on anything from investment pledges to foreign states or companies, sports sponsorships, contracts with businesses and investors, or sales of holdings.
The official said three of the four big Gulf economies — Saudi Arabia, the United Arab Emirates, Kuwait and Qatar — had jointly discussed the strains being put on their budget and economies. But they declined to name the states.
“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.”
Three leading Middle East economies consider options
They added that the move was a precautionary measure that was the result of “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 the prospect of an investment review by the wealthy states had caught the White House’s attention. They manage some of the world’s largest and most active sovereign wealth funds, and Saudi Arabia, the UAE and Qatar last year pledged to invest hundreds of billions of dollars in the US after President Donald Trump visited the region.
They are also big backers of sporting events around the world and have all been investing heavily domestically to develop their nations and diversify their economies.
Any move that affects investments in the US or other Western states may raise the pressure on Trump to seek a diplomatic strategy to bring the war to an end.
The oil-rich Gulf states have been dragged into the conflict that the US and Israel launched against Iran, with Tehran unleashing a ferocious response against Washington’s regional allies. The war has caused shipping traffic to slow to a halt through the Strait of Hormuz — the crucial waterway through which a fifth of the world’s oil and gas passes — with at least 10 tankers being struck in the Gulf.
Qatar, the world’s second-largest liquefied natural gas producer, was forced to declare force majeure this week after it suspended production following a drone attack on its main LNG plant. One of Saudi Arabia’s largest oil refineries has also been struck.
Iran has also hit US bases and embassies in the region, as well as airports, hotels and residential buildings, severely disrupting air traffic and tourism.
The Gulf states had pressed Trump to hold off on an attack and pursue a diplomatic solution with Iran, but have since borne the brunt of the Islamic republic’s retaliation.
Khalaf al-Habtoor, a prominent Emirati businessman, reflected Gulf frustrations about being dragged into a war triggered by the US and Israel in a social media post addressed to Trump.
“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 said on X. “Did you calculate the collateral damage before pulling the trigger?”
Published in Dawn, March 7th, 2026
