Gulf countries may reconsider overseas investments as the Iran conflict impacts sovereign wealth fund strategies.

The spillover effects of the U.S.-Iran conflict continue to expand, and global capital markets are facing a new source of uncertainty—the ability of Gulf sovereign wealth funds to fulfill their investment commitments.

On Friday, according to the British Financial Times, as the U.S. and Israel pursue military action against Iran, budget pressures in Gulf states are mounting. At least three of the four major Gulf economies—Saudi Arabia, the UAE, Kuwait, and Qatar—have begun joint consultations on budget and economic pressures, and initiated internal reviews to assess whether force majeure clauses can be invoked, while re-examining existing and future overseas investment commitments.

Gulf sovereign wealth funds are enormous and highly active, and their investment trends have always been major indicators for global capital markets. Saudi Arabia, the UAE, and Qatar committed billions of dollars to the U.S. after Trump visited the region last year. These three countries are also major sponsors of global sports events and continue to invest heavily in domestic economic diversification.

A Gulf state advisor revealed that this trend has caught the White House’s attention. After Trump’s visit to the Gulf region last year, those three countries pledged to invest billions in the U.S. If these investment plans change, it will directly impact the U.S. and other Western markets and could further intensify the pressure on Trump to seek a diplomatic solution.

Budget Pressure: Three Gulf Economies Begin Investment Review

A Gulf official told the Financial Times, "Multiple Gulf states have started internal reviews to determine whether force majeure clauses in existing contracts can be invoked, and are conducting comprehensive assessments of current and future investment commitments to mitigate anticipated economic pressure from the ongoing war—especially if the conflict and related expenditures continue at the current pace."

The official noted that this move is a preventive measure, rooted in budget tightening caused by a convergence of factors: energy revenues are declining due to slowed output or transport disruptions, tourism and aviation are impacted, while defense spending is surging.

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

Hormuz Strait Obstructed: Energy and Trade Crisis

The direct trigger for the current crisis is Iran’s large-scale counterattack in the Gulf region. Iran carried out fierce retaliation against U.S. allies in the region, causing shipping in the Strait of Hormuz—a critical waterway for about one-fifth of global oil and gas transit—to nearly halt. At least 10 oil tankers in the Gulf were attacked.

Qatar, the world’s second-largest producer of liquefied natural gas, invoked force majeure after its main LNG plant was attacked by drones and forced to shut down this week. Saudi Arabia’s large refinery also suffered strikes.

According to CCTV News, Qatar Foreign Ministry spokesperson Ansari stated on the 3rd that during Iran’s strike on the U.S. military’s Al-Udeid airbase in Qatar, Qatari energy facilities were affected, but the damage was controllable and Qatar is conducting a technical assessment.

Meanwhile, Iran also struck 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 Commitments Unresolved, White House Warned

A Gulf government advisor said the likelihood of these investment reviews has already brought the issue to the White House’s attention. Analysts believe any measures affecting investments in the U.S. or other Western countries will put more pressure on Trump to seek diplomatic solutions and de-escalate the conflict.

Additionally, Gulf states previously urged Trump to pause strikes against Iran and seek diplomacy, but ultimately bore the brunt of Iran’s retaliation.

UAE business magnate Khalaf al-Habtoor publicly posed questions to Trump on social media, directly conveying regional dissatisfaction. "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 the X platform, "Before you pulled the trigger, did you calculate the collateral damage?"

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