Gulf war repair bill threatens overseas energy investments

• IEA sees costs running into tens of billions
• Fixes could ‘reduce outward capital flows’
• Global oil investment to fall for third year

Gulf states could scale back overseas energy investments to help fund tens of billions of dollars in repairs to infrastructure damaged during the Iran war, according to the International Energy Agency (IEA).

Sites across the region have been targeted by Iranian drones and missiles, from Qatar’s flagship Ras Laffan liquefied natural gas facility to oilfields and ports.

The IEA said the final repair bill was difficult to estimate but was likely to run into tens of billions of dollars. The Paris-based agency previously said around 30 facilities had been damaged moderately or severely in the conflict.

Analysts have said the amount, including repairs in Iran, could reach $58 billion.

The cost of restoring damaged infrastructure could “reduce outward capital flows, which have been a growing source of financing for infrastructure and energy projects in other regions”, the IEA said in its World Energy Investment Report 2026.

BNP Paribas estimates GCC investors sent a net $271 billion abroad in 2025, while Gulf sovereign wealth funds manage around $6 trillion of assets, according to Deloitte.

GCC countries — the UAE, Kuwait, Bahrain, Qatar, Oman and Saudi Arabia — have a slew of investments in international energy projects.

These include UAE state-backed green energy group Masdar’s 49 percent stake in the £11 billion ($14.8 billion) Dogger Bank wind development in the UK, and QatarEnergy’s 70 percent stake in Texas-based Golden Pass LNG.

The World Energy Investment Report forecasts global investments in oil projects are due to fall for the third year in a row to below $500 billion this year amid the supply shock caused by the virtual closure of the Strait of Hormuz.

Around a fifth of world oil supplies passed through the waterway between Iran and Oman before the conflict began on February 28.

The IEA said uncertainty over the duration of an oil price spike triggered by the conflict, supply-chain constraints and other obstacles were limiting short-term investments outside the Middle East.

Further reading:

• Oil markets bet on peace as Hormuz risks persist
• Murkiness of the Hormuz timetable threatens an oil price spiral
• Gulf oil spill ‘would rival Exxon Valdez disaster’

Companies and countries have been unsure whether to kickstart new fossil fuel projects in case the strait reopens suddenly and replacements are no longer needed.

The IEA said global energy spending this year will reach around $3.4 trillion, of which $2.2 trillion will be on non-fossil-fuel projects such as grid upgrades, nuclear and renewables.

Gareth Redmond-King, international lead at the UK-based non-profit Energy and Climate Intelligence Unit, said: “In a tense geopolitical environment, the clean transition is maintaining momentum globally, with clean energy investment still outstripping that in fossil fuels by around two to one.

“That clean investment over the past few years is paying dividends, avoiding hundreds of billions in imported fossil fuel costs, as oil and gas from unstable regions drive price spikes right around the world.”