Trump Proposes $5 Billion PACT Fund for Gulf Energy Reconstruction

The Partnership for Allied Trust and Construction involves a coalition including Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Iraq, Oman, and Jordan. Washington’s proposal serves as a tacit admission that the ongoing war—initiated by the U.S. and Israel in February—has severely degraded the economic stability of its Middle Eastern partners. While the fund targets the development of alternative pipelines to circumvent the Strait of Hormuz, the plan faces immediate skepticism. Analysts point out that the conflict remains active, and the prospect of a lasting peace with Tehran appears distant. Furthermore, regional states are wary of the financial burden, especially given that existing infrastructure, such as Saudi Arabia's East-West pipeline, remains susceptible to sabotage and mechanical failure.

Even with the proposed investment, physical security remains a critical hurdle. Previous attacks by Yemeni Houthis on Saudi pipelines demonstrate that fixed assets are prime targets for regional adversaries. Experts argue that while Gulf nations are beginning to accept that the Strait of Hormuz may no longer be a reliable transit point, no pipeline project can guarantee total security. Ultimately, the success of any infrastructure project hinges on an end to hostilities, a condition that remains elusive as both Washington and Tehran continue to trade accusations and maintain rigid diplomatic stances.