US capital faces Gulf war exposure
US companies are the most exposed foreign investors in the Gulf as the Middle East war tests the region’s long-standing appeal as a stable destination for cross-border capital. Fresh data shows the scale of that exposure, even as analysts suggest the broader pattern is shifting towards caution rather than retreat.
US-based groups pledged almost $70bn in greenfield foreign direct investment across the six Gulf Cooperation Council countries between 2020 and 2025, according to fDi Markets data cited in the source. That made the US by far the region’s largest source of announced investment over the period, ahead of China at $32.6bn, while India, the UK, Saudi Arabia and France each committed less than half the US total. The article notes that more than $318bn of greenfield FDI has been announced in the GCC over the past six years, the strongest such period since records began in 2003.
The conflict has challenged the Gulf’s positioning as a pro-business and politically neutral base for international companies. Tehran’s retaliatory strikes have hit civilian areas, energy infrastructure, data centres and luxury hotels, while the UAE has been the most targeted Gulf state, followed by Kuwait, Saudi Arabia, Bahrain, Jordan and Qatar. The article also says the Strait of Hormuz has effectively been closed apart from limited shipping, disrupting a vital route for oil, gas, helium and container trade. Brent crude has meanwhile traded around $100 a barrel, its highest level since Russia’s full-scale invasion of Ukraine in 2022.
The investment base at risk is broad. Since 2020, renewable energy has attracted $60bn in announced FDI to the GCC, followed by fossil fuels at $44bn and communications at $40bn. Real estate, automotive manufacturing and metals each received more than $20bn in pledged projects. The source adds that Iran’s Revolutionary Guard has threatened economic centres and banks tied to US and Israeli interests, while Amazon Web Services operations in Bahrain and the UAE have been disrupted by Iranian drone strikes. Key regional energy assets have also been hit.
Although the GCC represents only 5 per cent of total US outbound FDI since 2020, the article suggests the war has materially altered perceptions of risk around planned and existing investments. Analysts quoted in the source describe a recalibration in corporate behaviour, with reform agendas in countries such as the UAE and Saudi Arabia still intact, but with investor confidence now operating under far greater uncertainty.