Saudi Arabia: Effects on Logistics, Trade, and Construction
Executive Summary
Iran's retaliatory strikes reached Saudi territory directly, hitting areas near the Ras Tanura refinery complex and targets in the Eastern Province, and destroying a U.S. THAAD radar installation on Saudi soil alongside similar strikes in Jordan and the UAE. Riyadh has pursued official restraint and lobbied against further escalation, even as unconfirmed reports describe covert Saudi strikes on Iranian territory in response.
Key Takeaways
Saudi Arabia's East-West pipeline, built in the 1980s after the Iran-Iraq "tanker war," currently moves roughly seven million barrels a day to the Red Sea port of Yanbu, entirely bypassing the Strait of Hormuz.
The IMF projects Saudi growth holding near 3.1% in 2026 — the strongest outlook among Gulf oil exporters — even as regional production fell by more than 10 million barrels a day at the war's height.
Oil prices near $120 a barrel have given Riyadh fiscal breathing room, but Vision 2030 foreign direct investment faces stalling early-stage financing decisions.
The Public Investment Fund has scaled back or suspended giga-projects like The Line, Trojena, and the Mukaab, redirecting capital toward AI, industrial development, mining, and logistics.
Logistics
Saudi Arabia's existing East-West pipeline, built in the 1980s after the Iran-Iraq "tanker war" first exposed Gulf chokepoint risk, has become the kingdom's principal wartime asset — currently moving roughly seven million barrels a day to the Red Sea port of Yanbu, entirely bypassing the Strait of Hormuz. That existing infrastructure is a major reason the IMF projects Saudi growth holding near 3.1% in 2026, the strongest outlook among Gulf oil exporters, even as regional production collectively fell by more than 10 million barrels a day at the war's height.
Trade
Oil prices near $120 a barrel, roughly double pre-war levels, have given Riyadh unusual fiscal breathing room even as physical export routes have been disrupted; Saudi officials point to diversified income and institutional reserves built up in recent years as the basis for what the IMF's regional director called genuine financial buffers. Foreign direct investment tied to Vision 2030 faces a different reality, however: analysts describe early-stage financing decisions as stalling regardless of the kingdom's fiscal resilience, since investors are pricing in the war's duration and trajectory rather than Saudi Arabia's balance sheet alone.
Construction
The war's timing intersected with a shift already underway inside Saudi Arabia's giga-project portfolio — The Line, the Trojena ski resort, and the Mukaab skyscraper had all been scaled back or suspended before February 2026, as the Public Investment Fund moved toward a more targeted strategy spanning AI, industrial development, mining, and logistics rather than speculative real estate. The war has reinforced rather than caused this reallocation, giving Saudi leadership additional cover to continue redirecting capital toward sectors seen as more resilient to regional shocks.
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Bahrain: Effects on Logistics, Trade, and Construction
Bahrain was among the hardest-hit Gulf states economically, compounding a debt position that already ranked among the most burdened in the world before the war began. Iran struck the U.S. Fifth Fleet headquarters in Manama directly, and the broader Strait of Hormuz crisis, combined with Iranian drone attacks, cut into aluminum and oil exports that together provide more than two-thirds of government revenue.
Iraq: Effects on Logistics, Trade, and Construction
Iraq has emerged across multiple independent analyses as the economy most structurally exposed to this war, with between 90% and 97% of its crude exports historically routed through the Strait of Hormuz and oil accounting for roughly 90% of state budget revenue. A drone attack on a Basra compound housing offices used by the U.S. firm Halliburton underscored how directly the conflict reached Iraq's oil-sector infrastructure, while Iran-aligned strikes on the Kurdistan Region — including Erbil International Airport and the U.S. Consulate there — numbered close to 500 by the time a ceasefire was announced on 8 April 2026.