Gulf Nations Rush to Build Infrastructure Amid Iran-US Conflict

The ongoing conflict between Iran and the US has led to a significant shift in the global trade map, with Gulf nations investing heavily in infrastructure projects to future-proof their economies. Ports have emerged as a top priority for Gulf governments, including Saudi Arabia, which is accelerating its investment plans to reduce reliance on the Strait of Hormuz.

The strait, which accounts for 20% of global oil flows, has been blocked for much of the past six months, forcing trade to be redirected to other ports. While Saudi and UAE ports have seen an increase in activity, their capacity is smaller than that of the strait. Gulf governments are exploring ways to create permanent solutions to bypass the strait.

Costs for these infrastructure projects could exceed hundreds of billions of dollars in the coming years, with Gulf sovereign wealth funds stepping in to accelerate the push. AD Ports, which operates ports in the UAE and globally, saw a significant decline in business in the second quarter due to the conflict.