The Gulf States continue to be, despite themselves, embroiled in the conflict triggered by the United States in Iran. In addition to the strikes on the Jewish state, Tehran has in fact targeted, since the end of February, no less than 80 energy infrastructures in the region (oil, gas fields, refineries, pipelines or storage sites), for an estimated total cost of repairs. At 58 billion dollars.
Airports and desalination plants, crucial for supplying the population with drinking water in these arid countries, have also been affected. And the fragile ceasefire that came into force at the beginning of April did not put an end to the attacks.
For Tehran, hitting these oil and gas producing countries will increase the energy shock already induced by the closure of the Strait of Hormuz and thus increase the pressure on global energy prices to push Washington to review its strategy. These reprisals also limit the Gulf’s desire to support the United States.
Targeted by these numerous missile or drone attacks, none of the six Gulf states, whether Kuwait, Bahrain, Saudi Arabia, Qatar, Oman or the United Arab Emirates, have yet responded.
« La passivité des pays de la région étonne »admits Jean-Paul Ghoneim, associate researcher at the Institute of International and Strategic Relations (Iris).
This wait-and-see attitude could be explained, according to him, by the skepticism of the petromonarchies regarding the Americans’ chances of success in destroying Iran’s capacity to cause harm. And therefore by a desire of the Gulf States not to attract the wrath of a regional power with which they will have to deal in the future.
Furthermore, the Gulf States, seeking economic diversification for several years to get rid of their dependence on oil, need stability in the region. Otherwise, the tap of international investments, essential to financing their development projects, could dry up.
Rivals in Riyad and Abou Dhabi
Finally, this new conflict has exacerbated the already latent tensions between the Gulf States, particularly between the two giants that are the United Arab Emirates and Saudi Arabia, preventing a unified response. The United Arab Emirates are among the Gulf countries that are least dependent on the Strait of Hormuz for their hydrocarbon exports, unlike the group made up of Bahrain, Qatar and Kuwait, which do not have an alternative export route and are therefore more than 90% dependent on it. But it is the Emirates, traditionally closer to Israel, which have suffered the greatest number of strikes, notably on the Fujairah oil terminal which allows the country to export without passing through the Strait of Hormuz.
Iranian attacks on numerous Emirati oil sites have therefore pushed the country to its limits. What would encourage him to opt for a new approach?
“The Emirates, which until now tried to spare their Iranian neighbor and served as a safe for deposits of Iranian oligarchs, guards of the revolution and other mullahs, have changed their strategy »notes for example Jean-Paul Ghoneim.
If the Emirates distance themselves from Tehran, however, ties will not be severed overnight. Notably because on a financial level, the Emirates have based their attractiveness on a high level of business secrecy which gives them a place of choice in opaque financial circuits around the world. And which they are therefore not ready to give up.
Under pressure, the Emirates also slammed the door of the Organization of the Petroleum Producing Countries (OPEC) at the beginning of May, for geopolitical reasons… Riyadh and Abu Dhabi clashed indirectly in Sudan and Yemen and recently divided over the issue. intermediary role played by the Emirates in the recognition of Somaliland by Israel – but also economic.
Solo race
This departure from OPEC confirms their opposition to the quotas imposed by the oil cartel, under the leadership of Saudi Arabia. While Riyadh calls for strict quotas to guarantee high prices for black gold, Abu Dhabi wants to produce more. The Emirates, more advanced in their economic diversification, in fact need a lower price per barrel to balance their budget: around 50 dollars, compared to 90 for Saudi Arabia, estimates the International Monetary Fund (IMF).
And Abu Dhabi has in mind the approach of a possible peak in global oil demand, announced in 2030 by the International Energy Agency.
« From the UAE’s perspective, the biggest risk is not falling prices, but leaving oil in the ground that may never be sold.”summarizes Adi Imsirovic, master of lectures at the University of Oxford, specialist in energy systems.
“By freeing itself from quotas, the United Arab Emirates are strengthening their capacity to adjust their production and manage their income.”describes Ebtesam Al Ketbi, president of the Emirates Policy Center. Abu Dhabi aims to increase its production capacity to 5 million barrels per day by 2027, instead of the 3.5 million imposed by OPEC, to maximize its revenues in a troubled context.
“Already weakened by several departures, including that of Qatar in 2018, the organization […] do not represent more than 30% of global production résume Jean-Paul Ghoneim.
On the Emirates side, it is not certain that this bet of a solo race will allow them to absorb the shock caused by the war. Certainly, their economy is the most diversified in the region, but the sectors in which the country has invested are also affected by hostilities, starting with tourism or transport, particularly air.
Whether for the Emirates or other countries in the region, which have relied more or less on the same strategy, the war threatens the efforts undertaken in recent years. The conflict risks damaging public budgets. Because oil prices, even if they rise, will not compensate for the inability to export and – once storage capacities are saturated – to produce.
Except for the Sultanate of Oman which is located on the right side of the strait: its budgetary balance should thus improve by four percentage points compared to what was anticipated last October. All the Gulf States are therefore not exactly in the same boat.
Budgets will also come under strong pressure “because the United States has demonstrated that it is no longer the guarantor of regional security.”summarizes Asiam El Difraoui, doctor in political science at Sciences Po and specialist in the Middle East, in the columns ofGrand Continent. As a result, the Gulf countries, which have until now been able to contain their military spending, will have to open the floodgates further to guarantee the security of their region. Latest sign of the growing disconnection with the American ally: the request addressed by Donald Trump last week to Qatar and Saudi Arabia, so that the latter normalize their relations with Israel by signing the Abraham Accords. Which was met with complete silence from the countries in question.
$5 trillion in assets
The petromonarchies can, it is true, rely on solid economic fundamentals to face current challenges, nuances Stéphane Alby, economist at BNP Paribas and specialist in emerging economies: they enjoyed significant growth before the war (4% in 2025), a low level of debt, as well as a low unemployment rate and inflation.
In the future, they can also hope to benefit from the boom in artificial intelligence thanks to “abundant and inexpensive energy of which AI is highly consuming, vast spaces to deploy the necessary capacities in data centers and the decisive support of sovereign funds or even the strategic partnerships established with world leaders in the sector such as Microsoft, Google, OpenAIâ€summarizes François-Aissa Touazi, co-head of investor relations at Ardian, a private equity firm, and author of a recent article on Gulf sovereign funds.
If the war puts Gulf budgets under pressure, the region can indeed count on the more than 5,000 billion dollars in assets managed by these funds, fueled by the oil windfall. A sum equivalent to twice the gross domestic product of the region, notes Stéphane Alby.
War-induced fragmentation does not bode well for building strong economic models in the future
But the capital “is never infinite even in this well-endowed region of the world.”delays the French Directorate General of the Treasury. Particularly because the projects launched are for some titanic. And that to stay in power, the Gulf monarchies need to maintain a social model which, in return for a limited space for political expression, guarantees the population the virtual absence of taxes, subsidies on basic products and a significant stock of public jobs.
And the fragmentation induced by the war, of which the episode concerning OPEC is only the emerging face, does not bode well for the construction of solid economic models in the future. The Gulf countries are in fact currently embarked on a dangerous « course aux hubs ».
“This is what we have seen in recent years in Saudi Arabia, the UAE and with some nuances in Qatar, which have invested massively to develop their airport platform, their airline, their international financial center, their ports and their free zones.”decrit la direction générale du Trésor.
Except that this fierce competition means that capital “tends to be primarily allocated to more quickly profitable projects such as real estate, tourism projects, import-export revenues†which do not strengthen long-term growth potential. This project would require more regional cooperation, in particular to invest in common railway interconnections in order to make the Gulf less dependent on the Strait of Hormuz.
Where to shock
To take just one other example: the path towards food autonomy in the Gulf, and the development of an agri-food industry to achieve this, also requires coordination which is lacking today, according to a recent analysis by the French Ministry of Agriculture.
The shock wave suffered by these countries could reverberate beyond the Gulf itself. In their immediate neighborhood first, because the Gulf countries have based their development on a significant foreign workforce, whose remittances have become essential for the economies of origin, such as Pakistan or Lebanon.
A change in the investment policy of sovereign funds that could affect Europe or the United States
Even further, it is a change in the investment policy of sovereign funds which could affect Europe or the United States.
« In the very short term, we can expect a rebalancing of priorities [de ces fonds, NDLR] towards support for their economy, and therefore a slowdown in external investments »predicts Stéphane Alby, who nevertheless believes that« a massive liquidation of assets held abroad seems unlikely.”.
The UAE and Saudi Arabia are among the top 20 economies in the world in terms of both inbound and outbound investment, illustrating their key role in the global financial system. The choices of the petromonarchies will be decisive in the coming months and will have consequences well beyond the Gulf.
