Soaring regional tensions boost Gulf budgets, threaten long-term goals
Most of the Gulf’s economic diversification plans still rely heavily on oil and gas revenues, especially in Saudi Arabia, where the most speculative parts of Vision 2030 face a lack of interest by foreign investors.
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DUBAI — Over the weekend, Iran launched for the first time from its territory a direct attack on Israel in retaliation for the April 1 strike on its consulate in Damascus that killed seven Islamic Revolutionary Guard Corps members. The weekend attack was to an extent expected and most of the missiles and drones were intercepted. Still, tensions are at an all-time high over fear that the violence could escalate into a wider Middle East conflict.
Many projectiles were intercepted by Israel's multilayered air defense system with strong support from the United States and other European and Arab allies. Amid the attack, Iran’s mission to the United Nations posted on X that “the matter can be deemed concluded,” but warned that a “considerably more severe” response should be expected if Israel retaliates against the Islamic Republic. “US must stay away!” the post added as American military forces stationed in the region received additional F-15 fighter jets this past week.
In this fog of war, and on the back of OPEC+ oil output cuts extended until mid-2024, Brent crude rose above $90 a barrel this month for the first time since November 2023. Some analysts predict that further escalation between Iran and Israel could send oil prices above $100 per barrel. At the time of writing, Brent crude hovered around $90 a barrel. Rating agency S&P Global previously expected prices to average $83 per barrel in 2024 and $76 in 2025.
