A multibillion-dollar pipeline sale in Kuwait has emerged as one of the early signs that the Gulf’s dealmaking machine is taking a hit from the US-Israel-Iran war.

On March 17, Reuters reported that Australian infrastructure investor Macquarie had pulled out of bidding for a stake in Kuwait’s oil pipeline network worth up to $7 billion, citing uncertainty caused by the conflict. 

The reported move would mark one of the first known cases of an investor stepping away from a major Gulf transaction since the war erupted on Feb. 28. More broadly, the development raises fresh questions about the foreign investment outlook across a region where dealmaking has boomed in recent years. 

How large an investment impact this war will have remains unclear. According to Tim Callen, a visiting fellow at the Arab Gulf States Institute and former International Monetary Fund mission chief for Saudi Arabia, the trajectory of foreign direct investment into the Gulf Cooperation Council countries will largely depend on how long the conflict continues and whether investors believe similar tensions could reemerge after the war ends.