The Trump administration has proposed a $10bn fund to help Middle East countries rebuild energy infrastructure damaged in the Iran war and reduce reliance on the Strait of Hormuz, a report in the Wall Street Journal (WSJ) Monday said.
Citing US and Middle Eastern officials and documents WSJ had seen, it said Washington would contribute $5bn and seek matching contributions from eight regional partners — Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iraq and Jordan.
The initiative, named the Partnership for Allied Trust and Construction (Pact), would be managed by the Development Finance Corporation, a US federal agency whose programmes have historically targeted developing countries rather than wealthy Gulf states.
Discussions are under way and the terms could still change, US officials said, and it remains unclear whether all the named countries will sign on.
The WSJ report added that some Middle East officials described the initiative as a US attempt to downplay the strategic weight of the Strait of Hormuz and project unity against Iran. They cautioned that building a fund to rebuild destroyed sites without a peace deal with Tehran would be premature, given the risk of renewed drone and missile strikes.
Bilal Saab, senior managing director at TRENDS US, a consulting firm, was quoted in the report as saying the strategy carried significant risk, noting that larger Gulf producers such as Saudi Arabia and the UAE have alternative routes available, while smaller states remain more dependent on the strait.
The seven-month conflict has damaged pipelines, refineries and gas export terminals across the region, with repair costs estimated in the tens of billions of dollars, the report said. Attacks have also disrupted Saudi Arabia's bypass pipeline and Red Sea shipping routes, pushing tanker rates to record levels as Gulf producers seek workarounds to keep crude moving.
