A shadow of fear looms over the Persian Gulf as Iran vows swift retaliation following US airstrikes on its nuclear facilities, igniting a crisis that could jeopardize the region’s staggering $370.6 billion investment in US Treasuries. The strikes targeted critical sites, including Fordo, Natanz, and Isfahan, sending shockwaves through Gulf capitals heavily entrenched in American financial systems.

Panic is already gripping global markets—oil prices are surging, and stock values are plummeting, with the Gulf’s substantial holdings in US debt at the epicenter of the turmoil. According to the US Treasury, as of April 2025, the UAE holds $97.7 billion, Saudi Arabia $135.3 billion, Kuwait $49.2 billion, Qatar $2.7 billion, and Bahrain $1.2 billion in US Treasuries. Moreover, the region’s vast sovereign wealth funds, including Abu Dhabi’s ADIA at $943 billion and Saudi Arabia’s Public Investment Fund at $925 billion, are severely exposed to US assets.

Iranian state media has accused these funds of indirectly supporting Washington’s military actions, painting Gulf economies as potential targets for retaliation. Analysts warn of possible missile strikes on Gulf oil facilities or, even more alarmingly, a blockade of the Strait of Hormuz, a critical passage for nearly 20% of the world’s oil supply. Goldman Sachs has predicted Brent crude could soar to $110 per barrel in the event of further escalation.

As Brent crude prices begin to tick upward, hitting $70.32—a 0.4% rise—investors are bracing for a potential sell-off that could hammer the value of US bonds and plunge global markets into chaos. Gulf leaders now face a perilous choice: cling to US Treasuries amid escalating tensions or divest, risking economic instability at home. With Iran’s threats hanging ominously in the air, the Gulf’s financial bet on American security teeters on the brink of collapse.