Business

Iran war spurs Gulf infrastructure investment

By Sohail Khan 28 August 2026, 2:46 pm

Benchmarks
Nifty24,116.0525.21

Precious Metal
Gold (MCX) (Rs/10g.)159,300.00304.0

Enter search text:

Business News›News›International›World News›Pipelines and ports: Iran war spurs Gulf infrastructure investment

Read Today's Paper

Pipelines and ports: Iran war spurs Gulf infrastructure investment
Synopsis

Gulf nations are investing billions in infrastructure to bypass the Strait of Hormuz. Ports, pipelines, and railways are top priorities as trade routes face disruption. This strategic shift aims to future-proof economies against ongoing geopolitical challenges. New projects are emerging across the UAE and Saudi Arabia. These efforts seek to create permanent, integrated solutions for energy exports.

Dubai: The Iran war's redrawing of the global trade map is forcing Gulf nations to retool their investment play book, ploughing capital into infrastructure, from energy pipelines to ports, to weather the fallout from the conflict.

The war has highlighted the Gulf's overreliance on the Strait of Hormuz, previously a chokepoint for 20% of global oil flows but also subject for decades to Iranian threats of disruption.

Also read: After six months, the Iran war has reached its endgame, a costly stalemate

With the strait virtually blocked for much of the past six months, a burst of billions of dollars of investment commitments has emerged as Gulf energy exporters try to future-proof their economies now facing a severe slowdown.

Trade is being redirected to ‌Saudi ports on the Red ⁠Sea and the ⁠United Arab Emirates' eastern ports but capacity is smaller. Gulf governments are looking at ways to create permanent, integrated solutions to get round using the Strait of Hormuz, said an industry source, declining to be named due to the sensitivity of the matter.

'PORTS, PORTS, PORTS'

While most Gulf governments can tap into oil riches accumulated over decades, some may look to external funds as they work towards ambitious foreign direct investment targets and as big infrastructure funds and other international investors show interest in the region's assets.

Costs could exceed hundreds of billions of dollars in the coming years and Gulf sovereign wealth funds, among the biggest in the world, are already stepping in to accelerate the push.

Ports have emerged as a "mission-critical priority" for Gulf governments, including Saudi Arabia, said a second industry source.

"If two years ago sports was the big buzz thing, I think for the time being, next year or two, they're going to say ports, ports, ports," he said of Saudi Arabia.

Abu Dhabi sovereign wealth fund L'IMAD said last week ⁠it plans to buy ‌out the rest of AD Ports as it revamps the company's strategy.

AD Ports operates ports in the United Arab Emirates and across the globe, but its UAE container throughput, as well as bulk and general cargo volumes, dropped by around two thirds in the second quarter from a year earlier as the company said it operated "through perhaps the most ⁠significant challenge in its 20-year history."

Dubai's DP World, one of the world's biggest port operators, also saw business decline in the first half. It plans to develop two container terminals in Fujairah, where the UAE is building a new oil pipeline that will double crude capacity to Fujairah when it becomes operational next year. DP World is also working on inland container depots in the UAE.

Also read: Iran's wounded supreme leader remains unseen six months into existential war

Zin Bekkali, chief executive of UK-based investment management firm Silk Invest, says Gulf governments have the capital to fund some or most of this accelerated investment in infrastructure internally.

"So infrastructure is definitely an area which we think is going to benefit," Bekkali said.

Saudi Arabia has fast-tracked billion-dollar plans to steer oil away from Hormuz, including a capacity expansion of its crude pipeline to the western Red Sea coast, sources told Reuters last month, potentially helping neighbours transport more oil without crossing the strait.

ECONOMIC FALLOUT

Beyond disruptions to shipping, strikes on production facilities in the Gulf have significantly affected oil refineries, aluminium plants and data centres among others, while air traffic remains below pre-war levels, impacting tourism and business flowing through ‌the region.

On another level, the war has shaken Gulf hubs' reputation as safe havens.

Qatar and Kuwait's economies are set to shrink by just over 8% this year, according to a Reuters poll, while Saudi Arabia's economy will expand by 1.4%, after 4.5% growth in 2025.

Qatar, one of the world's top liquefied natural gas exporters before the Iran war, relies wholly on the strait to export LNG and also faces ⁠massive production shortages due to damage to its energy facilities.

Kuwait Petroleum Corp is in discussions with Saudi Arabia and the UAE to expand their pipeline systems to accommodate its oil shipments. Iraq is working to expand its oil exports through Turkey's Ceyhan port and aims to begin exporting oil through ports at Syria's Baniyas and Jordan's Aqaba, involving new pipelines.

There has been some opening up of the Strait of Hormuz recently but trade is limited and there is no clear end in sight to the conflict between Iran and the U.S. despite a cooling of hostilities. Control of Hormuz is one of the most contentious points of disagreement, and countries are joining forces to find new ways to reduce reliance on it.

Turkey and Saudi Arabia aim to build a railway to link the two countries with Jordan and Syria in the next three or four years, Turkey's transport minister said in June, adding other Gulf countries would join the project.

"The recent Strait of Hormuz crisis has given us a very important lesson that these vulnerabilities are real… and they can happen anytime at any chokepoint," said Afaq Hussain, a former senior fellow at the Middle East Initiative at the Atlantic Council.

Backup trade and transport routes are needed even when they may initially appear uneconomical, he said.

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our WhatsApp channel)

(You can now subscribe to our WhatsApp channel)

Read More News on
Gulf infrastructure investmentStrait of Hormuzenergy pipelinesports investmentSaudi portsAD Ports

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year