Wall Street giants have been flocking to the Middle East for a slice of the region’s vast oil wealth, but escalating tensions between Iran and Israel are throwing up new uncertainties.
In recent years, the United Arab Emirates and Saudi Arabia have pushed for regional peace and spent billions from their vast oil revenues to expand their economies. They’ve become more important than ever to the world of finance and business, using a $3 trillion pile of sovereign wealth to bankroll global deals and attract the biggest hedge funds and banks.
But the hubs of Abu Dhabi, Doha, Riyadh and Dubai sit just across the Strait of Hormuz from Iran, which last week attacked Israel with nearly 200 missiles. Images on social media showed the glow that lit up the Gulf’s night sky as the missiles took off.
That was one of the starkest reminders yet of the risks facing these cities. While they’ve remained insulated from the war between Israel and Hamas that began last year, governments are now contending with a conflict drawing closer to their shores.
As long-time allies of Washington, several Gulf countries are home to American military bases. While the region has seen conflict previously, for the most part this played out through Iran-backed proxies in Yemen, Lebanon, Syria and Iraq. Now — amid pledges from Israeli officials of a ‘significant’ response to Iran’s attack — there’s the threat of a direct war that could drag in the US.
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