Gulf nations may prioritize domestic investments over US commitments amid economic pressures, according to a report from the Peterson Institute for International Economics (PIIE) released on September 14, 2026. The ongoing conflict between the United States and Iran could complicate the ability of Saudi Arabia, Qatar, and the United Arab Emirates to fulfill nearly $4 trillion in economic commitments to the US, which were announced under President Donald Trump’s 'America First' agenda.
The 15-page report indicates that the Gulf states are experiencing increased economic pressure due to the conflict, necessitating higher spending on defense, energy infrastructure, and trade. The report states, 'The conflict has weakened their fiscal positions and economic prospects and may have lasting effects on their growth models. It has also weakened their confidence in the US security umbrella in the Gulf.'
The war has significantly impacted the Gulf economies more than the global economy, with the International Monetary Fund (IMF) reducing its 2026 global growth forecast by 0.3 percentage points, while the cuts for the Gulf states were more substantial. For instance, Qatar’s growth forecast was cut by 14.7 percentage points to 8.6 percent, Saudi Arabia’s forecast was reduced from 4.5 percent to 1.7 percent, and the UAE’s forecast was also lowered from 5.6 percent to 1.7 percent.
Despite having sufficient financial assets and borrowing capacity to avoid an immediate funding crisis, the report suggests that the economic pressures may lead these countries to focus on domestic spending rather than investments in the US. It notes that Saudi Arabia had already begun shifting toward domestic investment prior to the conflict, a trend that appears to have intensified.
Saudi Arabia’s Public Investment Fund has decreased its allocation to international investments by 10 percent over the past six years, now holding 20 percent of its portfolio in international assets, down from 30 percent in 2020.
The report warns that delays in meeting investment commitments could result in additional pressure from the White House, which has previously employed tariffs to ensure compliance from other nations. It cites an instance from January 2026, when Trump threatened to raise tariffs on South Korean goods due to delays in their investment agreement.
In contrast, the report highlights progress on US investment commitments from South Korea, with a potential energy investment deal exceeding $100 billion to support the expansion of artificial intelligence infrastructure in the US.
Qatar continues to seek investments in the US energy sector, with QatarEnergy beginning production of liquefied natural gas (LNG) in Texas in March 2026 and commencing exports the following month. The company is negotiating contracts with several US LNG producers through 2031 to replace capacity lost due to Iranian attacks on its facilities.
The PIIE report emphasizes that the lack of clear definitions and timelines for investment commitments may complicate the assessment of whether these countries are fulfilling their promises. Political concerns in the US also pose challenges, as lawmakers have raised questions regarding the economic and national security implications of Gulf investments.
An example cited is a $2 billion investment in Binance by a UAE-backed firm, which has drawn scrutiny due to its connections to the Trump family. Senators Elizabeth Warren and Jeff Merkley sought records about this transaction in June 2025, expressing concerns over the financial ties involved. Additionally, lawmakers have expressed apprehension about Gulf sovereign wealth funds financing major US corporate deals, including Paramount Skydance’s proposed acquisition of Warner Bros Discovery.
The report concludes by questioning how and in what form the three Gulf countries will implement their commitments.