Major Gulf economies including Saudi Arabia, the United Arab Emirates, Kuwait and Qatar are reviewing their investment commitments and contracts with the United States as the ongoing Iran war places growing pressure on their economies, according to a report by theFinancial Times.
Citing Gulf officials, the report said several countries have quietly begun internal discussions to examine whether force majeure clauses can be invoked in existing contracts. They are also reviewing future investment pledges in order to reduce the economic strain caused by the conflict.
“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," a Gulf official told theFinancial Times.
The review could affect a wide range of commitments, including investment pledges to foreign governments and companies, sports sponsorship deals, contracts with global businesses and even the sale of certain holdings, the report said.
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The move comes as the war between the US, Israel and Iran continues to disrupt the Gulf region’s economic stability. Energy revenues have fallen sharply, while shipping through the Strait of Hormuz — through which roughly a fifth of the world’s oil and gas passes — has slowed dramatically after several tankers were hit during the conflict.
Tourism and aviation sectors have also taken a hit after Iranian strikes targeted US bases, embassies and infrastructure across the region.
According to theFinancial Times, rising defence spending and reduced energy exports have placed additional strain on government budgets in the Gulf. An adviser to a regional government told the newspaper that the possibility of reviewing overseas investments has already caught the attention of the White House.
The Gulf states manage some of the world’s largest sovereign wealth funds and had pledged hundreds of billions of dollars in investments in the US following a visit by US President Donald Trump to the region last year.
Any slowdown in those investments could increase pressure on Washington to seek a diplomatic solution to end the war, the report noted.
Source: World News in news18.com, World Latest News, World News
