Three of four major Gulf economies may review investments in overseas including US: Report
Several Gulf countries are reviewing their overseas investments and financial commitments as they assess the economic pressure caused by the ongoing US-Israeli war against Iran.
According to a report by The Financial Times, the financial strain on Gulf economies could lead to reconsideration of some international investment pledges and contracts.
A Gulf official cited by The Financial Times that the economic pressure may affect various types of international commitments including to the United States made by Gulf countries.
These could reportedly include investment pledges to foreign governments or companies, sports sponsorship deals, contracts with international businesses, and even the sale of existing holdings.
The official said that three of the four major Gulf economies, Saudi Arabia, the United Arab Emirates, Kuwait and Qatar, had discussed the financial pressure being placed on their budgets and economies. However, the official did not identify which three countries were involved in the discussions.
The official said that some Gulf countries have begun internal reviews of their financial commitments and contractual obligations.
“A number of Gulf countries have begun an internal review to determine whether force majeure clauses can be invoked in current contracts, while also reviewing current and future investment commitments in order to alleviate some of the anticipated economic strain from the current war,” the official was quoted as saying by the Financial Times.
“Especially if the war and related expenses continue at the same pace,” the official added.
The official said the review was being carried out as a precautionary measure because several economic sectors have been affected by the conflict.
An adviser to a Gulf government cited by The Financial Times stated that the possibility of an investment review by wealthy Gulf states has already drawn attention from the White House.
Saudi Arabia, the United Arab Emirates and Qatar manage some of the world’s largest sovereign wealth funds and are among the most active investors globally, the report added.
The adviser said these countries had pledged to invest hundreds of billions of dollars in the United States last year after US President Donald Trump visited the region.
Gulf countries are also major backers of global sporting events and have been investing heavily in domestic projects aimed at diversifying their economies and reducing dependence on oil.
Any decision by these countries to reduce or reconsider investments in the United States or other Western countries could increase pressure on the Trump administration to pursue diplomatic efforts to end the war, the adviser reportedly told FT.
According to the report, the conflict has severely affected shipping traffic through the Strait of Hormuz, a key maritime route through which around one-fifth of the world’s oil and gas passes.
Shipping activity in the area has slowed significantly, and at least 10 tankers have been struck in the Gulf.
The war has also affected energy infrastructure in the region. Qatar, which is the world’s second-largest liquefied natural gas producer, declared force majeure earlier this week after it suspended production following a drone attack on its main LNG plant.
In addition, one of Saudi Arabia’s largest oil refineries has been hit during the conflict.
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Counterfeit notes worth Rs 2.38 lakh seized in Bantwal, two arrested
Mangaluru: Punjalakatte Police have busted a fake currency racket near Pandavarakallu in Badagakajekkaru village of Bantwal taluk, arresting two persons and seizing counterfeit notes and other materials worth about Rs 7.96 lakh, Deccan Herald reported.
According to police, Sub-Inspector Rajesh K.V. received credible information on May 1 that two persons were allegedly transporting and storing counterfeit currency in a car at Koominadka near Pandavarakallu with the intention of circulating it for financial gain.
Acting on the tip-off, the police team raided the location and detained Mohammed Sameer (28) and Mohammed Irfan (26). Another accused, Rasheed Kundadka, managed to escape from the spot.
Police seized five bundles of counterfeit Rs 500 notes with a total face value of Rs 2.38 lakh. They also confiscated three mobile phones worth Rs 57,000 and the car allegedly used in the crime, valued at around Rs 5 lakh.
The total value of the seized items is estimated at Rs 7.96 lakh.
