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The program included a live performance of “A Safe Person to Approach” by Ebtisam Abdulaziz and was followed by a reception and a tour of the exhibit.

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Some Washington pundits view the attack on Qatar as a minor dent in an otherwise sturdy defense platform: It has angered the Gulf states, but they will come around due to few, if any, alternatives. This is a flawed assessment. It downplays the uniqueness of the attack and the determination it will spark in reassessing options. The attack was executed by a U.S. ally in a residential area without warning and targeted a U.S.-endorsed mediation process with Hamas representatives. It is not even remotely similar to the 2010 targeted Israeli assassination of a Hamas operative in Dubai, a covert action that violated sovereignty but did not involve airstrikes in broad daylight resulting in local casualties. This botched Qatar operation has been accompanied by alarming rhetoric. Israeli Prime Minister Benjamin Netanyahu has shown no remorse, warning Qatar and others on U.S. Embassy grounds in Jerusalem and subsequently in the presence of Secretary of State Marco Rubio that similar such attacks could not be ruled out. The Gulf’s centrality in the Middle East and its significance to the United States warrants specific U.S. guarantees beyond President Donald J. Trump’s assurances of nonrepetition and dinner meetings.

Interdependent Paths?

The Gulf Arab states have been the Trump administration’s preferred regional partner as evidenced by his affinity for forceful leadership and first major trips abroad to the Gulf in both presidential terms. The two sides share a pragmatic approach and recognize the possibilities of Gulf capital and U.S. technologies, among other mutually attractive domains.

Gulf-U.S. relations are at the heart of Trump’s vision for the Middle East: a peaceful, prosperous region further integrated with Israel. Yet this vision will not materialize if Israel sustains its occupation and keeps getting a free pass, violently advancing its aims at the expense of U.S. partners and even U.S. interests at times. A second obstacle is the midlife crisis confronting the current U.S. security umbrella as the relationship based on “oil for security” needs to be redefined. Both sides have been overtly discussing, and occasionally working on, a holistic and multifaceted agreement. However, they have not yet been able to come to a conclusive understanding. Accompanying this is the recurring frustration among the Gulf states over the perceived U.S. unwillingness to defend them, while the United States remains frustrated with the complaints and the Gulf states’ inability to grasp its position. Gulf leaders are aware that the United States does not necessarily respond to one-off attacks unless they are part of a clear cycle or threat – though such attacks appear increasingly more common in the Gulf. But the current U.S. defense posture is not delivering for the Gulf. It is further complicated by a new challenge: how to deter attacks on the Gulf by a U.S. ally. This is on top of changes in the United States and the Gulf during the past decade. An emboldened Gulf and an internally fractured, preoccupied United States makes a clearly defined defense treaty more urgent, starting bilaterally and then extending collectively to the Gulf Cooperation Council membership. Saudi Arabia and the United States have been pursuing one, but it remains on hold. Further, the most recent defense relations update with Bahrain in 2023, the Comprehensive Security Integration and Prosperity Agreement, falls short of Gulf expectations as would the rumored U.S. “enhanced” defense agreement with Qatar after Israel’s attack.

Gulf security has long relied on foreign superpowers. The United States has been the Gulf states’ main security partner, characterized by military bases and weapons procurement as well as training and interoperability. The relationship has delivered in the past, but its utility is under question if turning the Gulf into a conflict zone goes unaddressed. These attacks were few – until now. The last bastion of stability in the Middle East, the Gulf cannot afford these incidents to be the new normal. The often-underreported Gulf-U.S. security success stories will eventually be dwarfed by unaddressed security threats.

If these two elements – Israel’s conduct in the region and U.S. defense parameters – remain open questions, it will risk the stability of the region, the transformations underway in the Gulf, and the trillions of dollars in committed investments in the United States. The Gulf states will have to prioritize their security. They will not have enough bandwidth or even the excitement to pursue the envisaged projects with the United States. The United States cannot refuse to acknowledge the red lines that Israel has crossed in the past two years. Nor should it stay idle when its interests and Gulf partners are under attack.

The Gulf: One or Many?

Feeding the conviction that this was another one-off attack that will not garner a serious U.S. reaction is the notion of Gulf unity. Several partners of Gulf states, including the United States, readily dismiss Gulf unity. They find it performative, comes in waves, and serves passing interests at best. There are elements of this, but holding it as a rigid descriptor of Gulf affairs misses historical trends and the ongoing reconciliation momentum on display since the 2021 Al-Ula Summit. It also misses fast changing dynamics underway that reinforce the efficacy of unity: a weakened Iran and an emboldened Israel. The Gulf Arab states have always come together when major crises befall them. The Iran-Iraq War, occupation of Kuwait, and invasion of Iraq are a few examples. A U.S. ally attacking a Gulf capital, regardless of the reason, qualifies as another strong unifier.

Converging Gulf views and actions have been on display in recent months too. Look no further than coordinated actions in postconflict spaces such as Lebanon and Syria and relations with Iran. Tactical differences may exist (Sudan and the degree of normalization with Israel for example), but there is a shared general direction especially when it comes to regime preservation and pan-Gulf security. The Gulf rift from 2017-21 was the exception, not the norm.

For example, a delegation from the United Arab Emirates, an Abraham Accords signatory, kicked off its Gulf tour to align Gulf views toward normalization with Israel before turning to the ramifications of the Qatar attack (the Emirati visit to Saudi Arabia was followed by Qatar, Bahrain, and Oman). Top Emirati officials have warned Israel against annexing occupied Palestinian lands, and Abu Dhabi summoned the deputy Israeli ambassador to protest the Qatar attack. The UAE is part of a gathering Gulf consensus against Israel.

If Gulf leaders want to be taken more seriously by the United States, concrete and coordinated actions are necessary. The Gulf needs to move beyond optics (condemnations and communiques) and the performative (visits and summits) to specific innovative, escalatory actions that influence outcomes and yield tangible results from its partners and adversaries.

What Can the Gulf Do?

Gulf leaders are realists. Their dependence on U.S. security cooperation is no secret. Setting aside the question of trusting the United States or not, they recognize that no powerful alternative exists in the interim. Meanwhile, Israel has succeeded in rapidly elevating itself as the most immediate challenge to Gulf security. Early versions of these risks were already hinted at in the GCC’s first vision for regional security, issued in 2024. The precedent of an Israeli attack and the threat of a repeat underscore the urgency of GCC states coming fully to grips with the vulnerabilities and threats that currently face them. That is why remaining idle with no impactful response to Israeli aggression is not an option for the Gulf. The Gulf states need to efficiently promote their views and devise a set of actions that shields them from future attacks.

Diversifying partners, localizing defense, and establishing an indigenous regional security architecture are the next best options to the current dependence on the United States. But these measures, even with the modest progress of previous efforts, will take a decade at least to bear fruit, if pursued wholeheartedly. The Gulf’s changing threat perception can generate outcomes that diverge from U.S. security imperatives. When a U.S. ally becomes the source of a major threat to the Gulf, it means more regional defense cooperation with parties the Gulf Arab states have traditionally viewed with suspicion, such as Turkey and possibly even Iran, or with trusted partners, such as Pakistan. These defense ties are less developed than with the United States, but what use is a military superpower if it does not provide basic security needs and thwart repeated attacks? Regarding evolving Gulf attitudes toward Iran, a lax U.S. response to the Israeli attack could ultimately push the Gulf Arab states closer to Iran, an astonishing potential turn of events and one that indicates how powerfully Israel’s reckless action has upended long settled strategic thinking in the Gulf. This can mean continued quiet communication and de-escalatory efforts with Iran, turning a blind eye to maximum pressure enforcement, and enabling Iranian regime survival to act in effect as a counterweight to Israel, avoiding the latter’s imposition of a regional order. Such a trend, which would represent strengthening current Gulf rapprochement dynamics with Iran, could push Abraham Accords signatories toward cooling relations with Israel, at best, and further systemize Gulf efforts toward actualizing a Palestinian state as a precursor to any further normalization.

Despite the challenges the Gulf states confront in addressing threats to their security, they have more immediate options to respond to Israel’s attack. If such a response is smartly planned and coordinated, the tools at their disposal can send a clear signal that the Gulf is to be reckoned with. Such action can also help fend off future attacks or at least raise the stakes for potential attackers.

Gulf sovereign wealth funds are the region’s most underutilized deterrent although marshaling this tool for deterrent effect will require acknowledging the independent calculation of national interests each state brings to the deliberations. If the many Gulf sovereign wealth funds were to consider a joint, specific divestment plan that starts with Israeli-affiliated entities, including specific triggers, it could have powerful effect. Similar action aimed at the U.S. entities at a later stage would also likely have a galvanizing effect. Any financial moves that could have an impact on U.S. interests should be gradual and well-communicated in advance to accentuate impact and minimize fallout, and they should be accompanied with specific asks that meet Gulf defense needs and regional interests, such as delivering a Palestinian state – a goal that the United States does not disagree with. Consideration should be given to making Gulf investments in the United States conditional on enabling local industrial and defense development to secure civilian nuclear programs and access to technology and materials, like the recent U.S. artificial intelligence and chip deals with the UAE and Saudi Arabia.

Diplomatic pressure and global coalition building like the Saudi-led “Global Alliance for the Implementation of the Two State Solution” is another model to follow. Despite their low risk tolerance and capability disparity with Israel, Gulf states need to underscore – and have their powerful friends underscore – the right of states under international law to defend themselves when attacked. The United Nations charter enshrines that right. Gulf countries could choose to exercise that right, as well, with a demonstrated, orchestrated defensive response.

Continued diversification and signing major defense deals with other countries should also be geared toward securing more U.S. concessions. This process is already underway. A joint, strategic approach is already one of the early responses to the Qatar attack, including the Saudi-Pakistani mutual defense pact that had been in the works but was notably signed eight days after the attack. Putting together an adaptive, integrated suite of options promises better returns than a wait-and-see attitude, a hesitant response, or exclusive recourse to a behind-the-scenes approach. Absent an assertive approach, the Gulf states would be inviting another attack. Other Gulf capitals could be next.

New Gulf-U.S. Understandings

This is a different attack. The United States should take note of the Gulf’s rapidly shifting calculus. The attack on Qatar will accelerate a process already underway – weaning off of dependence on the United States – and likely provide for a more unified response across the Gulf. But eliciting a firm U.S. response that addresses Gulf security concerns and admonishes Israel would reinvigorate the relationship and demonstrate the Gulf’s value to the United States. That could translate into a well-defined collective defense pact with the Gulf states.

The United States is facing a depleting reservoir of credibility in the Middle East. Consistency is key to addressing that depletion and so is treating the Gulf states as equal partners in a multifaceted relationship starting with security.

The Gulf states need to forcefully demonstrate their rejection of the evolving regional status quo. Turning a blind eye to Israel’s open season on the region is not an option; Gulf states need to take action and activate messaging that effectively quarantines this attack as a deeply mistaken one off and absolutely not the start of an alarming new trend.

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The initiatives build on a long-standing partnership dominated by hydrocarbons, which remain at the core of China-Kuwait relations. Yet, in recent years, the two countries have expanded their cooperation into sectors such as construction, logistics, and renewable energy, suggesting a growing appetite to broaden ties beyond oil.

Hydrocarbons at the Core of Relations

Trade and investment figures reveal the central role of hydrocarbons in Chinese-Kuwaiti economic ties. In 2024, trade volume between Kuwait and China was estimated at roughly $16 billion, of which Kuwait’s exports accounted for $11.47 billion. The majority of these exports consisted of crude oil and petrochemical products, with Kuwait the ninth-largest source of crude oil imports for China. Meanwhile, China has been Kuwait’s top export destination for crude oil since 2018.

In 2023, Kuwait received $2.11 billion in foreign direct investment inflows, with China the second-largest source. Although the sectoral breakdown of Chinese FDI is harder to discern, most FDI entering Kuwait in 2023 was directed toward the oil and gas sector.

These trade and investment figures reflect Kuwait’s wider dependence on hydrocarbon exports across its economy. In 2023, hydrocarbons generated more than 85% of Kuwait’s fiscal revenue and contributed approximately half of its gross domestic product. They also accounted for roughly 95% of the country’s exports. With an estimated 101.5 billion barrels of proven reserves, Kuwait has the sixth-largest oil reserves in the world. This dependence on hydrocarbons makes Chinese engagement in Kuwait’s oil and gas sector critical to the country’s fiscal health and economic stability.

Expanding Cooperation Beyond Oil

Economic cooperation between the two countries has been expanding into other sectors in recent years, with a significant focus on construction and infrastructure development. In August 2023, Kuwait’s Public Authority for Housing Welfare awarded China Gezhouba Group $1.2 billion in contracts for the development of the South Saad Al-Abdullah housing project, which is presently under construction and will include 24,508 residential units once completed. In March 2024, the Public Authority for Housing Welfare also awarded two contracts to the China State Construction Engineering Corporation and Sinohydro for road networks in South Sabah al-Ahmed City, valued at $300 million and $260 million respectively. And in January, the Kuwaiti Cabinet awarded the long-delayed Mubarak Al-Kabeer port contract, valued at $3.2 billion, to China Communication Construction Company Limited, a Chinese state-owned firm.

Additionally, in August, Minister of State for Municipal and Housing Affairs Abdullatif al-Mishari accompanied a Chinese technical delegation on an aerial inspection of the Al-Sabriya housing and development project and the Khiran and Nawaf Al-Ahmed labor city sites, two residential development complexes for migrant laborers. All together, these projects are projected to provide 170,000 housing units. While no agreements were signed during the visit, the announcement signals Kuwait’s growing interest in engaging Chinese firms in its ambitious construction projects.

On the Mubarak Al-Kabeer port, beyond the construction contract, there is also a focus on logistics in the bilateral relationship. Located on Boubyan Island in the northwestern corner of the Gulf, the port sits within strategic proximity of the China-Central Asia-West Asia economic corridor, a critical link for enhancing connectivity and trade efficiency between East and West. The port also sits near Saudi Arabia’s proposed “Landbridge” project, a roughly $7 billion railway initiative that is planned to span 932 miles and connect key logistical hubs in the kingdom between the Red Sea and the Gulf coast. With a planned capacity of 8 million containers annually, the Mubarak Al-Kabeer port is positioned to serve not only as a large-scale development project but also as a potential gateway for China to expand its regional role in supply chain logistics and port operations.

China and Kuwait have also increased cooperation in renewable energy and defense. In March, the two countries signed a framework agreement to expand the Shagaya and Al-Abdiliya solar parks, which together are planned to generate 3,500 megawatts of electricity, with potential to rise to 5,000 megawatts. They are also nearing completion of a joint ammunition factory.

Beyond China’s growing engagement in Kuwait’s economy, Kuwait has also expanded its presence in China. In May, the Kuwait Investment Authority, the country’s sovereign wealth fund, was among the largest cornerstone investors in Chinese battery manufacturer CATL’s $4 billion Hong Kong initial public offering, committing $500 million. In 2019, the Kuwait Investment Authority became the first foreign investment vehicle in China’s highspeed railway sector with a $200 million stake in the Jinan-Qingdao line. These investments build on the Kuwait Investment Authority’s prominent presence in China, marked by the opening of its first representative office in Beijing in 2011 and second overseas office in Shanghai in 2018.

Kuwait also provides China with the most soft loans of any Arab country, through the Kuwait Fund for Arab Economic Development, a government institution that finances development projects abroad. These loans, offered at below-market interest rates and more flexible repayment terms, are valued at roughly $1 billion and are spread across 40 development projects in education, health care, infrastructure, and other sectors.

While hydrocarbons will likely continue to dominate Kuwait-China economic ties, recent momentum in various sectors signals an increasing willingness to expand cooperation beyond oil to meet both countries’ long-term strategic interests.

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That picture has changed rapidly. Regulators across the Gulf have shifted from soft encouragement to hard compliance, embedding sustainability into financial systems and turning ESG from a communications tool into a determinant of financing terms. Stock exchanges are mandating ESG reporting, regulators are aligning disclosure with international standards, and climate laws are beginning to define how capital is raised and deployed.

In the United Arab Emirates, a federal climate law establishing a national carbon credit registry with immediate compliance requirements for major emitters came into force May 30. By August, the Securities and Commodities Authority was developing rules for carbon-credit trading platforms while maintaining fee exemptions for issuers of green bonds and sukuk, or Islamic bonds. These measures strengthen governance and incentivize sustainable finance by embedding ESG standards into the country’s financial architecture.

Qatar followed in June. The Qatar Financial Centre Regulatory Authority converted its sustainability reporting guidance into binding rules aligned with international standards. The change compels financial institutions and listed firms to adopt structured disclosure systems, marking a clear break from voluntary reporting. Oman has taken a similar path. The Muscat Stock Exchange mandated ESG reporting for listed companies mid-June and convened a workshop with the International Sustainability Standards Board to accelerate adoption. Within weeks, sustainability metrics went from optional to compulsory, forcing boards and auditors to integrate ESG key performance indicators into governance cycles. Saudi Arabia added another building block in May, when the Capital Market Authority approved guidelines for issuing green, social, sustainability, and sustainability-linked debt. The framework standardizes issuance and reporting for labeled sukuk and bonds, reducing ambiguity and widening the investor base.

Taken together, these changes mark a decisive regulatory pivot. Gulf companies are no longer simply encouraged to consider ESG standards; they are now compelled to integrate them into financing and governance. These regional developments also mirror global trends. In July, the International Sustainability Standards Board updated its industry guidance to facilitate adoption, while the European Commission adopted amendments to the corporate sustainability reporting directive without diluting its extraterritorial scope. Gulf companies with European exposure will therefore need to align with the European sustainability reporting standards, and early movers will have a smoother path to European capital. Rather than lagging, Gulf regulators are positioning their markets to remain investable in a world where ESG compliance is increasingly priced into risk assessments.

The impact on capital flows is already visible. In May, the UAE’s clean energy developer Masdar raised $1 billion in a green bond that was more than six times oversubscribed, lifting its total program to $2.75 billion. This level of demand contrasts sharply with a global slowdown in labeled bond issuance and highlights a key point: Credible ESG frameworks attract capital even in weaker markets. For Saudi issuers, the Capital Market Authority’s guidance on labeled debt promises to broaden demand for transition-aligned sukuk and bonds, particularly in utilities, infrastructure, and real estate. As frameworks mature, Gulf debt markets are likely to gain increasing appetite for well-structured sustainable instruments.

In the UAE, regulators are drafting rules for carbon-credit trading venues. This is a prerequisite for bankable corporate participation and indicates that carbon trading is moving from concept to market infrastructure. In Saudi Arabia, the voluntary carbon market has shifted from one-off auctions to long-term procurement. Enowa, the Neom utility subsidiary, and the Voluntary Carbon Market Company are targeting delivery of more than 30 million tons of credits by 2030. This transition from pilot projects to structured market rules is significant. Carbon credits are evolving into tradable, regulated assets that support long-term financing. The Gulf’s role as a hub for high-integrity issuance and trading is set to expand, particularly as global aviation obligations under the carbon offsetting and reduction scheme for international aviation tighten and demand for eligible credits accelerates.

For investors, new avenues are beginning to take shape across the region. Labeled debt issuance under Saudi and Emirati frameworks is opening opportunities in transition-aligned fixed income, while the development of carbon market infrastructure, including exchanges and verification services, is becoming increasingly investable as regulations mature. Regional funds, notably Abu Dhabi’s Alterra climate investment platform, are also attracting global managers and underwriters, reinforcing the emirate’s role as a hub for sustainable finance. With clear rules, credible issuers, and rising demand, Gulf ESG assets are well positioned to outperform broader global trends, particularly at a time when global labeled issuance has slowed.

The Gulf has crossed a threshold. The UAE has locked in climate governance and market rules, Qatar and Oman have made ESG reporting compulsory, and Saudi Arabia has standardized labeled issuance while scaling carbon demand. These moves are embedding ESG practices into the core of Gulf financial systems. For investors, this means risk is now being priced differently. ESG reporting is no longer optional or a matter of corporate branding; it has become a determinant of financing terms and market access. Recent evidence also suggests that stronger ESG reporting improves firm performance in the Gulf, particularly when supported by robust climate governance structures. The region now offers clearer regulatory signals, more credible frameworks, and an expanding range of transition-linked instruments across infrastructure, corporate decarbonization, and the carbon value chain. The Gulf’s ESG transformation is not only reshaping compliance; it is redefining risk.

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Maritime Modernization Drive

Just three weeks after its initial testing, the Kuwaiti coast guard deployed the NeedleFish during a joint drill with the U.S. Navy, signaling its commitment to integrating the drone boat into routine maritime security operations. Developed by the Texas-based marine robotics company Ocean Infinity, the 46-foot, dual-hull naval drone leverages high maneuverability, record speed, and advanced sensor suites to perform a broad range of maritime security roles, with a particular focus on intelligence, surveillance, and reconnaissance missions.

While integral to Kuwait’s broader efforts to improve the combat readiness and operational efficiency of its coastal and naval forces, the NeedleFish is only one of multiple key pillars in the country’s maritime power overhaul.

The cornerstone of this modernization drive is a $213 million contract signed in October 2024 between the Ministry of Interior and the United Kingdom-based SRT Marine Systems to deliver an advanced radar system. Operational since 2005, Kuwait’s current radar architecture is increasingly ill-suited to meet contemporary maritime requirements. Leveraging artificial intelligence-driven analytics, a distributed network of modern sensors, and advanced data-integration technologies, the SRT C5ISR system will markedly enhance maritime surveillance and support intelligence-led operational planning and response.

The deal also includes the construction of 12 radar towers, delivery of a naval surveillance aircraft, and establishment of onshore command centers, enabling the Kuwaiti coast guard to detect, monitor, and respond to any activity below, on, and above its over 40,000 square miles of territorial waters. With the first truck-mounted command unit delivered in February, the new maritime surveillance system is slated to reach full operational capability by mid-2026.

Kuwait has also made significant strides in modernizing its aging fleet. The centerpiece of this effort is a $2.45 billion deal signed in June between the Kuwaiti Ministry of Defense and Emirati defense conglomerate EDGE for eight 200-foot FALAJ-3 patrol vessels.

Developed by the Abu Dhabi Shipbuilding Company, an EDGE subsidiary specialized in naval assets, the FALAJ-3 is an offshore patrol vessel designed to operate in both coastal and blue waters. Equipped with a broad array of armaments, from missiles to medium-caliber guns and decoy launchers, it is capable of operating in air, surface, and subsurface warfare scenarios. The United Arab Emirates ordered four of these vessels in 2021, at a hefty $238 million estimated price tag per ship, with the first ship of the class commissioned in January.

Kuwait has likely ordered the FALAJ-3 to gradually replace its aging Um Al Maradim-class patrol vessels, which have been in service since the late 1990s. The FALAJ-3 is a substantial leap forward, including an extended operational range (up to 2,000 nautical miles at 16 knots), advanced command-and-control and navigation suites, and modern multidomain weapon systems.

However, these superior capabilities are tempered by two structural constraints: personnel gaps and sustained training demands. With a complement of 39 personnel, the FALAJ-3 needs a larger crew than its predecessor, which operated with 24. Given Kuwait’s endemic naval personnel shortages, fully crewing fleets remains a challenge.

Moreover, introducing advanced ships means incorporating highly complex combat management systems, multidomain sensors, and sophisticated propulsion technologies. Crews often require years of training to master them, alongside adjustments to military doctrine to effectively employ these capabilities.

While the FALAJ-3 procurement contract expands Kuwait’s fleet of surface combatants, it also reinforces defense relations with the UAE. This partnership is not new, as Kuwait purchased eight landing ships from Abu Dhabi Shipbuilding Company in 2013. In December 2024, the Kuwaiti coast guard announced a $146 million contract with the UAE for retrofitting and upgrading more than 20 of its patrol boats. Over half of the batch is undergoing maintenance, repair, and overhaul at Abu Dhabi shipyards. Focused on engine replacement, sensor and weapon modernization, and hull repairs, the two-year retrofit program is likely to extend each boat’s service life by six to eight years.

Defense Planning Realignment

Kuwait’s recent procurement deals are part of a broader shift in the country’s defense planning, laid out in the Ministry of Defense’s “Strategic Plan 2025-2030.”

Launched in May, the strategy underscores a growing determination to adapt to contemporary challenges by laying the foundations for a more resilient and integrated national defense ecosystem. The plan provides a structured blueprint to elevate the operational performance and defensive capabilities of Kuwait’s armed forces. It highlights the importance of deepening defense partnerships to strengthen Kuwait’s external security ties while simultaneously investing in human capital through enhanced training, military education, and professional development. Other priorities include relocating the Ali Al-Sabah Military Academy to a more modern facility, opening to investment to develop the local military-industrial base, and disposing of aging military equipment.

Coalition Anchors, Broader Ties

Despite the limited size and constrained expeditionary capacity of its naval forces, Kuwait stands out as an active player in regional waters. To cultivate security partnerships and enhance interoperability, Kuwait participates in the Combined Maritime Forces, a U.S.-led 46-country naval coalition. Notably, Kuwait is not alone in this effort: Saudi Arabia and Bahrain have also increased their contributions in recent years, with Riyadh recently assuming its fourth command of Task Force 150 since 2018.

Since the establishment of the Combined Maritime Forces’ Task Force 152 in 2004 to bolster maritime cooperation in the Gulf waters, Kuwait has taken command for nine rotations. During its present command, Kuwait has spearheaded multiple naval exercises, including search and rescue operations, countersmuggling drills, safety of life at sea missions, and patrol and reassurance activities. The consistent participation of Gulf Cooperation Council states in these exercises has reinforced Kuwait’s leadership profile, deepened information sharing among Gulf states, and sharpened tactical interoperability for challenging operational scenarios. Kuwait is also the only GCC state to have made a substantive operational contribution to the smaller-scale Combined Maritime Forces’ Task Force 151, assuming command of counterpiracy operations three times between 2018 and 2020.

Kuwait has also sought to strengthen its operational capabilities through minilateral and bilateral exercises. Since 2017, it has regularly taken part in a series of trilateral maritime exercises with the U.S. 5th Fleet and the Iraqi navy. Held at least once per year, these naval drills aim to foster interoperability among participating countries and enhance key naval competencies, including search-and-rescue techniques, ship boarding procedures, gunnery training, and formation sailing. Side activities, such as liaison exchanges, significantly contribute to building personal connections among sailors and familiarizing them with each other’s command protocols and decision-making processes, thereby reinforcing trust and teamwork.

The continuation of the trilateral naval exercise even amid renewed Kuwait-Iraq tensions over the Khor Abdullah border dispute in 2023 illustrates the value of this minilateral format as a platform for maintaining dialogue and managing frictions between the neighboring countries. It also reinforces Washington’s role as Kuwait’s partner of choice in maritime security, a point underscored by talks in August between the Kuwaiti coast guard chief, Commodore Mubarak Ali al-Sabah, and commander of the U.S. Central Command, Admiral Brad Cooper.

Despite Washington’s predominance, Kuwait has worked to diversify its security partners, focusing particularly on those with advanced military assets and strong maritime expertise to enhance specific naval capabilities. For instance, exercises with France target mine clearing and explosive disposal divers. Training with the U.K. centers on marine infantry operations, with potential expansion into sea mine countermeasures. And drills with Pakistan address counterpiracy, antismuggling, and other illicit activities. Most recently, after a six-year hiatus, Kuwait has also resumed bilateral naval exercises with Egypt.

Kuwait’s diversification of security partners and broad focus of maritime engagements reflect its commitment to a balanced, multilateral approach to regional security and ambition to maintain operational relevance despite limited naval capacity.

Dialogue Amid Tensions

Since the 1960s, Kuwait and Iran have been embroiled in a maritime demarcation dispute over the Dorra or Arash offshore gas field in the northern Gulf waters. Kuwait and Saudi Arabia assert exclusive rights to exploit the field’s estimated almost 8 trillion cubic feet of natural gas reserves, while Iran also maintains sovereignty claims over the resource-rich area.

Tensions increased in early 2022 after Saudi Arabia and Kuwait signed an agreement to jointly develop the gas field. Iran opposed the deal and announced its intention to begin drilling operations in the contested area. Ultimately, tensions eased amid broader regional de-escalation efforts between Gulf Arab states and Iran.

Despite the border demarcation issue remaining technically unresolved, and Tehran’s periodic announcements regarding drilling, Kuwait and Iran have capitalized on the recent easing of tensions to explore mutual maritime interests, particularly the maintenance of open sea trade routes and freedom of navigation. Notably, in April 2024, senior coast guard officials from both countries met to discuss enhancing cooperation in search-and-rescue operations, counterpiracy measures, and joint efforts to combat drug smuggling.

Protecting Coastal Assets

While fleet expansion and modernization programs underscore Kuwait’s efforts to strengthen its naval defense capabilities, they also serve pragmatic goals, namely, safeguarding its economic interests at sea and diversifying the Kuwaiti economy.

Kuwait’s oil production is heavily concentrated onshore, which significantly reduces the vulnerability of its upstream infrastructure to seaborne threats. Yet, it strongly relies on coastal refineries and export terminals to process and ship petroleum products. Most of Kuwait’s key hubs, including Mina al-Ahmadi and Shuaiba, are clustered along the southern coast, leaving the country’s export infrastructure exposed to potential maritime disruption and asymmetric threats in the Gulf.

Similar to its neighbors and in alignment with Kuwait Vision 2035, the country is also investing in logistics and trade corridors to diversify its economy, attract foreign investment, and expand local employment opportunities. Chief among these initiatives is the Mubarak Al-Kabeer port project.

First launched in 2011, the port construction has progressed intermittently. However, since 2019, Kuwait has signed multiple agreements with China to complete the port, which Beijing conceives as a strategic component of its Belt and Road Initiative. Recently, a contract for study, design, and project planning services has injected renewed momentum into the initiative, and on-site work began in March.

Strategically located on the eastern side of Boubyan Island, near Kuwait’s northern maritime border with Iraq, the port’s development has historically been a source of tensions with Baghdad, which is building its own logistics and trade hub, the Al-Faw Grand port, on the opposite shore.

Upon completion, expected by 2026, the port is projected to feature 24 berths and handle an estimated annual container throughput of 8.1 million twenty-foot equivalent units, thereby strengthening Kuwait’s standing as a regional transshipment hub. Additionally, the development plan includes the establishment of free trade zones, industrial parks, residential and commercial areas, and tourist facilities and marinas.

With Kuwait’s economic lifelines – from traditional oil revenue to emerging trade hubs – hinging on secure maritime routes and resilient coastal infrastructure, developing a capable and modern naval force has become pivotal to safeguarding national security and economic interests. As the Gulf’s maritime environment grows more contested – shaped by regional disputes, evolving trade corridors, and emerging asymmetric threats – Kuwait’s modernization drive reflects both pragmatism and ambition, ensuring its naval forces can protect economic interests, uphold sovereignty, and contribute meaningfully to multilateral security initiatives.

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These initiatives, however, are unfolding in a highly competitive global environment. Other major producers – including the Gulf Arab states – are deeply embedded in the global LNG market and already dominate key trade corridors. Qatar is the world’s third-largest LNG exporter, while Saudi Arabia and the United Arab Emirates are positioning themselves as strategic investors in LNG infrastructure, including U.S. export facilities. Thus, U.S. ambitions are not taking place in a vacuum; they directly intersect with Gulf states’ commercial strategies and their evolving roles in global energy markets.

These structural realities of U.S. LNG exports reveal a disconnect between political messaging and market conditions, which has implications not only for U.S. energy diplomacy but also for Gulf Arab states seeking to consolidate their influence, hedge against geopolitical risks, and navigate the accelerating global energy transition.

U.S. LNG Export Ambitions and Structural Constraints

Trump’s energy diplomacy has leaned heavily on symbolic announcements designed to convey momentum. One of the highest-profile initiatives involved a proposed joint LNG venture in Alaska including Japanese participation. Trump publicly directed Secretary of the Interior Doug Burgum to “set up” the partnership, portraying it as proof of strong U.S.-Japanese energy cooperation. Yet the “Alaska LNG” project – a $44 billion infrastructure plan including an 807-mile pipeline from Alaska’s North Slope and a new liquefaction terminal – remains at an early stage and lacks firm purchase commitments from Japanese buyers. In March, a nonbinding agreement was signed among the project’s owners, including the Glenfarne Group and Taiwan’s state-owned oil and gas entity, but it fell far short of guaranteeing significant LNG flows.

Other announced agreements carried similar limitations. The EU’s pledge to purchase $750 billion in U.S. energy products over three years was hailed as transformative for transatlantic energy relations. In practice, however, the EU Commission lacks authority to compel member states or private companies to purchase specific volumes of U.S. LNG. Procurement decisions remain decentralized and market driven, making it unlikely that Europe will achieve the headline targets. Likewise, a much-publicized $100 billion energy purchase agreement from South Korea and $350 billion investment pledge offered little detail on timelines, enforcement mechanisms, or binding contractual obligations.

Even if the political will exists to deliver on these pledges, U.S. export infrastructure faces physical constraints. Since the first LNG shipment left Cheniere Energy’s Sabine Pass terminal in 2016, U.S. exports have surged, making the country the world’s largest LNG exporter, surpassing both Australia and Qatar in 2023. This remarkable growth was driven by shale gas development and supply disruptions following Russia’s invasion of Ukraine in 2022. Yet U.S. LNG terminals are already running near maximum usage, with Gulf Coast facilities regularly operating above 95% capacity.

Planned expansions – Plaquemines LNG in Louisiana and Corpus Christi LNG Stage 3 and Golden Pass LNG in Texas – are expected to add substantial export capacity. While significant, this is likely to be far short of the tripling of exports needed to meet Europe’s announced targets. Moreover, most easily accessible U.S. gas reserves are already in production, meaning additional supply will depend on technically challenging and costlier fields, with potential environmental sensitivities.

Pipeline bottlenecks and political opposition present further obstacles. New pipeline projects often trigger eminent domain disputes and lawsuits, while environmental groups have mobilized against new fossil fuel infrastructure, arguing that such investments lock in decades of emissions and conflict with federal and state climate commitments. And even if the Trump administration’s policy trajectory shows greater willingness and capacity than its predecessors to override or circumvent regulatory restrictions, legal challenges and potential state coordination might blunt these efforts in the longer term. These dynamics have produced a polarized regulatory landscape that complicates any rapid expansion of LNG capacity.

Market Dynamics in Europe and Asia

The demand side of the equation further challenges the optimistic assumptions behind U.S. LNG diplomacy. Europe has invested heavily in new LNG import capacity, expanding its terminal infrastructure by more than 40% between 2021 and 2024. Yet actual LNG imports fell nearly 20% in 2024 compared with 2023. Many European terminals are underutilized, with roughly half operating below 40% capacity. This decline reflects multiple structural shifts, including improved energy efficiency, accelerated deployment of renewables, and ambitious climate targets designed to phase out fossil fuel consumption.

Even where new demand exists, long-term contractual commitments constrain flexibility. European buyers remain bound by supply agreements with Qatar, Nigeria, and Oman, limiting the room for redirecting purchases to U.S. exporters. Furthermore, the EU’s evolving climate regulations – including proposals to limit methane emissions from imported LNG – introduce another layer of uncertainty for U.S. producers, who already face scrutiny for methane leakage associated with shale gas operations.

Asian markets present similar complexities. Japan and South Korea have signed nonbinding letters of intent expressing interest in U.S. LNG, but both countries are committed to long-term decarbonization strategies and are aggressively investing in renewables and hydrogen. Moreover, new supply options are emerging. Canada is expanding LNG export capacity on its west coast, providing Asian buyers with a geographically closer and potentially cheaper alternative to U.S. cargoes from Alaska or the Gulf Coast.

Global competition is intense and price sensitive. Buyers in markets such as Mexico, India, Brazil, and the Middle East prefer flexible procurement models based on spot cargoes or short-term contracts, giving them leverage to secure lower prices. The risk of Russian pipeline gas reentering markets at discounted prices adds further uncertainty. Although the EU has pledged to phase out Russian gas by 2027, member states, including Hungary and Slovakia, have resisted full disengagement. If geopolitical shifts ease sanctions and Russian pipeline flows resume, U.S. LNG – burdened by liquefaction and shipping costs – could lose competitiveness.

Domestic market implications in the United States further complicate the export picture. A NERA Economic Consulting report estimates that each additional billion cubic feet per day of LNG exports raises domestic natural gas prices by up to 2.5%, with household energy costs potentially rising by $122 annually by 2050. These pressures have fueled political resistance in states heavily reliant on natural gas for heating and power generation, amplifying the political risks of aggressive export expansion.

The gap between political announcements and market realities is not new. The 2019 “Phase One” trade deal with China, for example, included a commitment by Beijing to purchase $200 billion in U.S. agricultural and energy products, yet most targets went unmet and no penalties were applied. Buyers often value flexibility and diversification over rigid political commitments. A June 2022 explosion at the Freeport, Texas LNG terminal, which temporarily halted exports, underscored the vulnerability of relying on single suppliers and highlighted the premium buyers place on portfolio diversity.

Implications for the Gulf States

These dynamics have direct consequences for the Gulf Arab states, which have long been major players in global LNG markets and are adapting their strategies to a shifting energy landscape. Qatar benefits from exceptionally low production costs, an integrated supply chain, and geographic proximity to both European and Asian markets. Its North Field expansion will increase annual LNG production capacity from 77 million metric tons to 126 million metric tons by 2027, consolidating Qatar’s role as a reliable supplier with long-term contractual relationships. Unlike U.S. exporters, which rely heavily on flexible spot cargoes, Qatar’s business model emphasizes decades-long take-or-pay contracts that offer buyers price stability and security of supply – an advantage in an era of heightened market volatility.

Saudi Arabia and the UAE are also shaping LNG markets but through a different approach. Rather than competing as major LNG exporters themselves, they have strategically invested in the U.S. LNG value chain. Saudi Aramco has acquired stakes in projects such as Sempra’s Port Arthur terminal, while the Abu Dhabi National Oil Company has taken an equity position in NextDecade’s Rio Grande facility. These investments secure physical access to U.S. LNG exports, diversify the Gulf states’ energy portfolios, and provide insight into U.S. production and export trends.

This dual approach – Qatar consolidating its export dominance and Saudi Arabia and the UAE pursuing strategic equity stakes – provides Gulf states with a unique hedge. Even if U.S. exports increase and begin to capture a larger share of European or Asian markets, Gulf stakeholders are positioned to benefit from the upside. At the same time, Gulf producers retain distinct competitive advantages. Proximity to Asia, which accounts for the bulk of future LNG demand growth, offers Gulf exporters lower shipping costs and faster delivery times than U.S. suppliers can provide. Gulf states are also innovating around carbon intensity, with Qatar investing in carbon capture and storage at its LNG facilities and the UAE pursuing integrated “low-carbon” LNG solutions to appeal to climate-conscious buyers.

Energy-transition strategies are an important part of the Gulf response. While LNG is framed as a “bridge fuel” supporting decarbonization, Gulf states are simultaneously investing in renewable power, hydrogen production, and related technologies. The UAE has established itself as a hub for clean energy, Saudi Arabia’s Vision 2030 emphasizes diversification away from hydrocarbons, and Qatar is branding its LNG as a lower-carbon option. These initiatives position Gulf producers to remain competitive even as buyers tighten procurement criteria to reflect emissions intensity and sustainability.

The geopolitical dimension is equally significant. LNG has long been used as a diplomatic instrument by Gulf states, which leverage long-term contracts to strengthen bilateral ties, especially in Asia where energy security is paramount. Gulf states are diversifying their diplomatic and economic partnerships, deepening engagement with China, India, and Southeast Asia while maintaining strategic relationships with Western partners. U.S. announcements of ambitious LNG sales are likely viewed by Gulf players less as an existential threat and more as a factor to be managed – one that can even present new opportunities. For example, by taking equity stakes in U.S. facilities, Gulf states can influence market flows and gain bargaining leverage with both buyers and sellers.

In the near term, U.S. LNG expansion is unlikely to displace Gulf producers in a significant way. Qatar’s incumbency and cost advantages, coupled with the Gulf’s integration of LNG with emerging clean-energy strategies, give these states a durable competitive edge. Over the longer term, Gulf producers’ ability to adapt to changing market and policy conditions, including potential shifts toward low-carbon or “green” gas, will be critical. Here, the Gulf states may even have an advantage over the United States, where climate policy inconsistency and infrastructure opposition could limit growth potential.

Gulf Producers Adapt

Trump’s trade announcements projected confidence in U.S. LNG export potential and sought to position the country as the energy superpower. Yet, export capacity constraints, shifting demand patterns in Europe and Asia, and competitive global supply dynamics may limit the immediate impact of U.S. ambitions. These realities create both challenges and opportunities for the Gulf states.

Qatar continues to dominate LNG markets through its low-cost structure and long-term contractual approach, while Saudi Arabia and the UAE have hedged against U.S. competition by investing directly in U.S. LNG infrastructure. Together, these strategies position the Gulf states to remain key players not only in traditional LNG markets but also in emerging low-carbon energy systems. Far from being displaced, Gulf producers are adapting to global market changes and may even benefit from U.S. export growth by leveraging investments, strengthening diplomatic ties, and accelerating their own energy-transition agendas.

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