❗️WSJ: Trump administration floats $10 billion Gulf reconstruction fund amid war on Iran

The Trump administration has proposed contributing $5 billion toward a new $10 billion investment fund to help rebuild Gulf energy infrastructure damaged during the US-Israeli war on Iran, according to The Wall Street Journal.

Under the proposal, the US would seek matching contributions from Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iraq, and Jordan, with the fund, named the Partnership for Allied Trust and Construction (PACT), intended to finance the reconstruction of pipelines, refineries, and other critical energy facilities while reducing regional dependence on the Strait of Hormuz.

According to the WSJ, the initiative reflects Washington's recognition that the seven-month war has severely disrupted global energy markets and left regional infrastructure heavily damaged. However, several Middle Eastern officials questioned the timing of the proposal, arguing that rebuilding before reaching a peace agreement with Tehran would be premature, as newly constructed infrastructure could remain vulnerable to Iranian missile and drone strikes.

The report says the war has forced Gulf states to accelerate efforts to develop alternative export routes after repeated attacks damaged refineries, oil fields, gas terminals, and Saudi Arabia's East-West bypass pipeline, pushing more crude shipments back through the Strait of Hormuz. Continued disruptions in the Red Sea, including recent Ansarallah operations against Saudi energy facilities, have also strained global shipping, increased tanker demand, and driven freight costs higher.

Analysts cited by the WSJ said Gulf states increasingly believe the Strait of Hormuz is unlikely to return to its pre-war role in the near future and are seeking more secure energy corridors. At the same time, they warned that new overland routes could create fresh regional dependencies and complicate political relations between participating states, making implementation of the proposed fund both strategically significant and politically challenging.