The ongoing conflict between the United States and Iran could make it difficult for the three Gulf states (Saudi Arabia, Qatar, and the United Arab Emirates) to fulfill nearly $4 trillion in economic commitments to the United States announced under President Donald Trump’s “America First” policy, according to a new analysis from the Peterson Institute for International Economics (PIIE).
The 15-page report released Monday said Gulf states face increasing economic pressures from the U.S. and Israel’s war against Iran, including the need to increase spending on defense, energy infrastructure and trade.
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“The conflict has weakened both countries’ fiscal positions and economic prospects, with potentially lasting implications for their growth models. It has also weakened both countries’ confidence in the U.S. security umbrella in the Gulf,” the report said.
According to the report, the war hit the Gulf economies harder than the global economy as a whole. The International Monetary Fund (IMF) lowered its global growth forecast for 2026 by 0.3 percentage points, but the reduction for Gulf countries was even greater.
The IMF has lowered its growth forecast for Qatar by 14.7 percentage points to 8.6%. The forecast for Saudi Arabia was lowered from 4.5% to 1.7%, and the UAE was similarly lowered to 1.7% from 5.6%.
According to the report, Gulf governments have sufficient financial assets and borrowing capacity to avert an impending funding crisis, but economic pressures could lead countries to prioritize domestic spending over investment in the United States, PIIE said.
“Saudi Arabia had already begun rebalancing towards domestic investment before the war, but the conflict appears to have reinforced that change,” the report said.
Saudi Arabia’s Public Investment Fund has reduced the proportion of its portfolio allocated to international investments by 10% over the past six years, to 20% from 30% in 2020.
The report also warns that delays in fulfilling investment commitments could lead to further pressure from the White House, which has traditionally used tariffs to encourage other countries to fulfill their commitments.
“The Trump administration has already shown limited patience with delays by other partners. In January 2026, President Trump threatened to increase tariffs on South Korean goods, citing delays in the South Korean Congress’ enactment of a U.S. investment treaty,” the report said.
“Continued dissatisfaction with South Korea’s implementation delays also appears to be related to the United States’ recent decision to scale back joint military exercises in South Korea,” the report continued.
This push coincides with the development of US investment commitments from South Korea.
The Wall Street Journal reported last week that the South Korean government was close to an energy investment deal worth more than $100 billion that would help expand artificial intelligence infrastructure in the United States.
Meanwhile, Qatar continues to pursue investments in the US energy sector. Qatar Energy began producing liquefied natural gas (LNG) at its Texas facility in March and began exporting it the following month.
Qatar Energy’s ties with US energy companies could further expand. The company is negotiating contracts through 2031 with several U.S. LNG producers to help replace capacity lost after an Iranian attack damaged LNG facilities in Qatar, Reuters reported.
political pressure
The PIIE report said the lack of clear definitions, timelines and measurement methods for investment commitments can make it difficult to determine whether countries are actually keeping their commitments. The agreement has also attracted scrutiny from lawmakers.
“Political concerns in the United States pose new obstacles, with members of Congress raising questions about the economic and national security implications of Gulf investments, governance, and potential conflicts of interest,” the report said.
One example cited in the report is a $2 billion investment in Binance by a UAE-backed investment firm. The transaction used a stablecoin issued by World Liberty Financial, a cryptocurrency company with ties to the Trump family. Sens. Elizabeth Warren of Massachusetts and Jeff Merkley of Oregon have asked for records on the transaction, citing concerns about the financial ties involved in June 2025.
By October 2025, President Trump has pardoned Binance founder Chao Changpeng, who pleaded guilty in 2023 to violating U.S. anti-money laundering laws.
Lawmakers have also raised concerns in the U.S. media about the involvement of Gulf sovereign wealth funds from Saudi Arabia, the UAE and Qatar in financing major U.S. corporate transactions, including Paramount Skydance’s planned acquisition of CNN’s parent company, Warner Bros. Discovery.
“The question now is whether and in what form the three countries will fulfill their commitments,” the report said.
