The US has floated committing $5 billion to a new multinational fund aimed at repairing Gulf energy facilities hit during the war with Iran and helping regional states find export routes that bypass the Strait of Hormuz, according to a media report Monday.
The Wall Street Journal, citing US and Middle Eastern officials and documents it reviewed, said Washington is seeking a matching $5 billion contribution from eight Middle Eastern partners — Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, Oman, Iraq and Jordan — which would bring the total to $10 billion. The initiative is called the Partnership for Allied Trust and Construction (Pact).
The US Development Finance Corporation would run the fund, according to the report. The agency’s past work has mostly centered on developing countries rather than rich Gulf monarchies.
US officials stressed that discussions are still underway, the terms may change, and it remains uncertain whether any country will sign on.
Some regional officials viewed the plan as an effort to portray the Strait of Hormuz as less critical and show a united front against Tehran, the Journal said. They also argued that funding reconstruction before a peace deal would be premature because Iran could target new facilities.
“This strategy has risk written all over it,” said Bilal Saab of the consulting firm TRENDS US.
Since the seven-month war began, Iranian missiles and drones have struck dozens of refineries, oil fields and gas export terminals, according to the report. A drone attack earlier this month also knocked out Saudi Arabia’s bypass pipeline, sending more crude through the Hormuz Strait and pushing tanker rates to record highs.
Umer Karim, a Gulf security researcher at the University of Birmingham, warned that the scheme could make some participants dependent on others and strain bilateral relations.
Repair costs are estimated at tens of billions of dollars, The Wall Street Journal added.