Why Gulf States Are Expected to Resist the $300 Billion Iran Reconstruction Fund

Trump later pushed back, saying neither the US nor Gulf partners are expected to contribute and that Gulf states can invest "if they want" — creating mixed signals about US coercion . The New York Times reported that the administration developed "workarounds" to funnel money to Iran without direct US payments, using Gulf sovereign wealth funds as conduits .

Investments pledged so far span energy, logistics, manufacturing, and transportation, with companies from the US, Gulf Arab states, Asia, South America, and Africa already committed .

Why Gulf States Are Expected to Resist

1. Direct Iranian Attacks on All Six GCC States

In February 2026, after the collapse of negotiations and the US-Israeli military campaign against Iran, Tehran launched missile and drone strikes across all six GCC states: Saudi Arabia, the UAE, Bahrain, Oman, Qatar, and Kuwait, as well as Jordan . GCC states were hit with more than double the number of ballistic missiles and roughly 20 times as many drones as Israel .

• Iran targeted civilian facilities, service sites, and residential areas, causing significant material damage .
• Saudi Arabia's largest oil refinery was set ablaze; Qatar's Ras Laffan LNG facility — supplying 20 percent of the global LNG market — was hit .
• The GCC held an extraordinary ministerial meeting to address the strikes, and Gulf states formally condemned them at the UN as a "severe infringement of state sovereignty" .

Chatham House analysts note that despite GCC states actively mediating to avoid war, Iran retaliated by bombing them anyway, burning any remaining goodwill .

2. Pouring $300 Billion Into a Recent Adversary

Gulf states fear that sending $300 billion into Iran's economy, even through a private investment structure, would directly enable further Iranian regional destabilization — particularly by funding Iran's proxy networks and missile programs that were just used against them . As the GCC secretary-general stated, the attacks marked "a turning point in the relationship and situation between Iran and the GCC countries" .

3. Financial Terms That Reward the Aggressor

Iranian officials have framed the fund as compensation for being the victim of aggression — a position Gulf states firmly reject. Ghalibaf stated that "the other side is not willing to accept that it was the aggressor" . Gulf states, which suffered billions in damage from Iranian strikes and the closure of the Strait of Hormuz — which threatened 22 percent of the world's crude oil output — view being asked to finance Iran's rebuilding as deeply unfair .

4. Mixed Messaging and Political Risk

Trump's shifting public stance — denying reports that the US or Gulf partners were expected to contribute, then saying Gulf states can invest "if they want" — provides thin political cover for Gulf leaders facing domestic backlash for funding a country that just bombed their civilians . The Jerusalem Post reports that Gulf nations are "hesitant" and privately resistant, viewing the fund as a mechanism that would effectively reward Iranian aggression and rebuild Tehran's capacity for future coercion .

The Strategic Reality: The Private Label Doesn't Remove the Risk

Although structured as a private investment vehicle with over half already committed by companies, Gulf states are expected to be the primary source of the remaining capital. US officials have informally asked Gulf countries to provide postwar reconstruction funds, and the NYT reports that the administration has been lobbying Gulf sovereign wealth funds .

For Gulf states, the core equation remains unchanged: they are being asked to help rebuild the military and economic capacity of a country that — just months ago — struck their cities, targeted their refineries, and threatened their citizens. No investment structure, however carefully labeled, can erase that recent memory.