Iran war spurs Gulf investment in infrastructure
THE Iran war’s redrawing of the global trade map is forcing Gulf nations to retool their investment playbook, ploughing capital into infrastructure — from energy pipelines to ports — to weather the fallout from the conflict.
The Iran war is reshaping global trade routes, compelling Gulf nations to invest heavily in infrastructure, including energy pipelines and ports, to mitigate the impact of the conflict. The Strait of Hormuz, once a critical chokepoint for 20% of global oil flows, has been virtually blocked for six months, forcing trade to divert to Saudi Red Sea ports and UAE eastern ports.
Gulf governments are exploring permanent solutions to bypass Hormuz, according to industry sources. Ports have become a top priority for Gulf governments, particularly Saudi Arabia. The Abu Dhabi sovereign wealth fund, LIMAD, plans to acquire the remaining shares of AD Ports, which operates ports globally and has experienced a significant drop in throughput due to the crisis.
DP World, a major port operator, also anticipates a decline in business and is investing in new terminals in Fujairah, a location where the UAE is constructing a new oil pipeline. Gulf governments possess the capital to fund infrastructure projects, according to Silk Invest, a UK-based investment management firm. The war has adversely affected oil refineries, aluminum plants, data centers, and tourism in the Gulf, and has damaged Qatar's and Kuwait's economies.
However, Turkey and Saudi Arabia are collaborating on a railway project linking the two nations, with other Gulf countries expected to participate. The Strait of Hormuz crisis has highlighted the vulnerabilities of chokepoints, emphasizing the urgent need for alternative solutions.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
