Gulf countries may review overseas investments, and the war in Iran affects the layout of sovereign wealth funds

# By Zhao Ying

Source: Wall Street CN

As the U.S.-Iran conflict continues to escalate, hundreds of billions of dollars in investment commitments from Gulf sovereign wealth funds are hanging in the balance. Saudi Arabia, the UAE, and Qatar have quietly launched internal reviews to assess the possibility of invoking **force majeure** clauses. Shipping through the Strait of Hormuz has nearly ground to a halt, energy facilities have come under successive attacks, and budgetary pressures have surged abruptly.

The spillover effects of the U.S.-Iran conflict are widening, introducing a new source of uncertainty to global capital markets: whether Gulf sovereign wealth funds can honor their investment commitments.

On Friday, the Financial Times reported that as U.S.-Israeli military operations against Iran intensify, budgetary pressures in Gulf states have spiked. At least three of the four major Gulf economies—Saudi Arabia, the UAE, Kuwait, and Qatar—have held joint consultations on budgetary and economic strains, launched internal reviews to evaluate whether they can invoke force majeure clauses, and are re-examining existing and future overseas investment commitments.

Gulf sovereign wealth funds are massive and highly active, and their investment trends have long been a key barometer for global capital markets. Following Trump’s visit to the region last year, Saudi Arabia, the UAE, and Qatar pledged hundreds of billions of dollars in investments to the U.S. The three countries are also major sponsors of global sports events and continue to invest heavily in domestic economic diversification.

A Gulf state adviser revealed that this development has caught the White House’s attention. The three countries’ multi-hundred-billion-dollar investment pledges to the U.S., made after Trump’s Gulf visit last year, are now at risk. Any disruption to these plans would directly impact U.S. and other Western markets and could further pressure Trump to seek a diplomatic solution.

## Budget Strains Prompt Investment Reviews by Three Major Gulf Economies

A Gulf official told the Financial Times: “Multiple Gulf states have launched internal reviews to determine whether force majeure clauses can be invoked in existing contracts, while conducting a comprehensive assessment of current and future investment commitments to mitigate the expected economic pressures from the ongoing war—especially if hostilities and associated spending continue at their current pace.”

The official noted that this is a precautionary measure driven by a confluence of factors straining budgets: energy revenues have fallen due to production slowdowns or transport disruptions, tourism and aviation have been hit, and defense spending has risen sharply.

The review could cover investment commitments to foreign governments or corporations, sports sponsorships, commercial contracts, and even the sale of existing holdings.

## Strait of Hormuz Blockade Cripples Energy and Trade

The immediate trigger for this shock is Iran’s large-scale retaliation across the Gulf. Iran has launched fierce counterattacks against U.S. allies in the region, bringing shipping through the Strait of Hormuz—a critical waterway handling roughly one-fifth of the world’s oil and gas—to a near standstill. At least 10 oil tankers in the Gulf have been attacked.

Qatar, the world’s second-largest LNG producer, invoked force majeure this week after a drone attack forced its main LNG plant to shut down. A major Saudi Arabian oil refinery has also been targeted.

According to CCTV News, Qatar Foreign Ministry Spokesman Ansari stated on March 3 that Qatar’s energy facilities were affected during Iran’s strikes on the U.S. Al Udeid Air Base in Qatar, but damage was contained, and technical assessments are underway.

Meanwhile, Iran has attacked U.S. military bases and embassies in the region, as well as airports, hotels, and residential buildings, severely disrupting regional air traffic and tourism.

## Hundreds of Billions in Investment Pledges Hang in the Balance; White House Alerted

A Gulf government adviser said the possibility of such investment reviews has drawn White House scrutiny. Analysts warn that any move affecting U.S. or Western investments would further pressure Trump to pursue diplomacy and de-escalate the conflict.

Gulf states had previously urged Trump to hold off on military action against Iran and seek a diplomatic solution, yet they now bear the brunt of Iran’s large-scale retaliation.

Prominent Emirati businessman Khalaf al-Habtoor publicly questioned Trump on social media, voicing the Gulf’s frustration. “A direct question: Who authorized you to drag our region into war with Iran? What was the basis for this dangerous decision?” he wrote on X. “Did you calculate the collateral damage before pulling the trigger?”

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