Ramadan War Undermines Gulf Investment Ambitions in Central Asia

The U.S.–Israel Ramadan War began with airstrikes on 28 February 2026 and quickly escalated to Iranian missile, drone and Strait of Hormuz blockades. Though Saudi Arabia, the United Arab Emirates, Qatar and other GCC states are not combatants, Iranian strikes on their energy assets and the near-halt of about 20 % of global oil and LNG flows forced a rapid reassessment of overseas projects, especially in Central Asia.

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By late 2025 GCC sovereign wealth funds had pledged US$16.2 billion to Central Asia. Deals included First Abu Dhabi Bank’s financing of Uzbekistan’s 500 MW Zarafshan wind project, Saudi ACWA Power’s clean-energy contracts in Kazakhstan, and Qatar’s Lesha Bank purchase of Kazakhstan’s Bereke Bank for US$134 million.

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Goldman Sachs projects GDP hits of up to 14 % for Qatar and Kuwait, 5 % for the UAE and 3 % for Saudi Arabia if disruptions persist. UNDP estimates regional losses of 3.7–6.0 % of collective GDP, or US$120–194 billion—exceeding 2025 growth. The forecasts differ, and no Central Asian project cancellations have been announced, leaving the shortfall unclear.

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At least three GCC governments are reviewing trillions of dollars in sovereign-wealth fund allocations, shifting money to domestic recovery, defence and infrastructure. Saudi Arabia has ended its Metropolitan Opera partnership and LIV Golf sponsorship, signalling a shift to core investment cuts.

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Analysts warn the fiscal shift threatens Gulf diversification and could hand Central Asian market share to China, holding US$89.3 billion in the region. The Hormuz crisis has spurred GCC interest in overland routes like the Middle Corridor and China-Pakistan Economic Corridor, but they remain nascent and cannot offset shortfalls. Observers note a “Reverse Gulf Stream” as Gulf sovereign-wealth funds face liquidations and reduced U.S. Treasury purchases, potentially raising bond yields.

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• “I think we won,” — Donald Trump, President of the United States

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• “Now we have to get what we have to get.” — Donald Trump, President of the United States

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• “People in the navy and the army are asking lots of questions: ‘Why did we do this? What did we accomplish? And what did we change that does not make the Middle East just as dangerous in six months?’” — Robert Farley, Senior Lecturer, University of Kentucky

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If Gulf capital stays constrained, China, Europe and the U.S. are poised to fill the financing gap. China’s US$89.3 billion exposure and a US$100 billion pledge from former President Trump’s 2025 Central Asian deals position it as the likely dominant investor. A cease-fire and Hormuz reopening could restore confidence, but prolonged disruption would likely cement a shift toward non-Gulf investors and reshape diversification.

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