The Gulf is entering a costly new era of accommodating Iran, regardless of whether Tehran and Washington break their stalemate. Spending on defense, protecting energy and infrastructure assets, and creating redundancies in trade and energy flows will become standard, according to Karen E. Young, a senior fellow at the Washington-based Middle East Institute. These bills arrive as oil prices — expected to plunge if the Strait of Hormuz reopens — are unlikely to return to the levels that financed earlier waves of public investment, she writes.
Gulf states won’t have to foot the bill alone. Blackstone, Brookfield, and KKR agreed to invest $16 billion in July for a 49% stake in Kuwait’s oil pipeline network, the largest foreign investment in the country’s history. And BlackRock is stepping up its investments and hiring in the region, Semafor reported.