The war involving Iran is pushing Gulf governments toward record levels of borrowing as they look to strengthen critical infrastructure and reduce exposure to regional chokepoints. The main focus is on making economies and supply chains more resilient during a period of heightened security risk.
A key concern is dependence on the Strait of Hormuz, one of the region’s most important trade corridors. In response, Gulf states are examining alternative routes and projects that could keep energy exports, imports and broader trade moving even if disruption risks rise.
The UAE and Saudi Arabia are among the countries weighing major spending plans tied to these goals. The expected investment appears aimed at both hardening existing systems and supporting new or expanded connections that give businesses and governments more flexibility.
For markets, the shift points to a broader link between geopolitical tension and public financing in the Gulf. Higher borrowing may help accelerate strategic projects, but it also shows how security concerns are reshaping infrastructure priorities and trade planning across the region.
