Gulf countries have raised a record $112 billion through bond markets this year as Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar accelerate infrastructure projects aimed at reducing dependence on the Strait of Hormuz, one of the world’s most critical energy shipping routes.
The record borrowing, covering the period from January 1 to July 23, comes amid rising geopolitical tensions in the region and renewed concerns over the vulnerability of a narrow waterway that previously carried around 15 million barrels of oil per day.
According to data, Gulf bond issuances have more than tripled since 2022, with investors continuing to show strong demand despite regional uncertainties.
Data from Markaz shows that Gulf Cooperation Council (GCC) countries raised $102.69 billion through bond and sukuk issuances during the first half of 2026. Saudi Arabia accounted for nearly half of the total, raising $49.34 billion.
The strong investor response has encouraged further borrowing. Kuwait recently secured $6 billion from a bond sale after receiving investor orders worth $14.8 billion. Saudi Arabia, Abu Dhabi, Qatar, and Bahrain have also successfully completed major debt offerings.
The Gulf states’ strong foreign exchange reserves and investment-grade credit ratings are supporting their ability to finance large-scale infrastructure projects focused on energy security and trade diversification.
Major projects include new export terminals on the Red Sea and Gulf of Oman, expanded oil pipelines, upgrades to aging energy facilities, and improved transport networks. Saudi Arabia is expanding routes connected to its Yanbu Red Sea port, while the UAE is advancing a $3 billion pipeline project to Fujairah that will allow more oil exports to bypass the Strait of Hormuz.
Iraq is also working on new pipeline connections with Turkey, Syria, and Jordan as part of efforts to diversify its export routes.
Goldman Sachs estimates that these projects could create around 3.8 million barrels per day of additional bypass capacity by the end of 2027 and 7.3 million barrels per day by the end of 2028.
If completed, the infrastructure expansion could allow nearly 60 percent of the Gulf’s pre-crisis oil exports to avoid the Strait of Hormuz, strengthening regional energy resilience and reducing reliance on a single shipping route.
