Gulf states accelerate overseas renewable investments amid Hormuz crisis

Tuesday 02 June 2026 - 13:02

By: Dakir Madiha

Gulf states accelerate overseas renewable investments amid Hormuz crisis

As military tensions around the Strait of Hormuz entered a third month, Gulf oil-producing states intensified investments in renewable energy projects abroad. The move reflects growing efforts to reduce exposure to disruptions that have constrained hydrocarbon exports and reshaped energy priorities across the region.

Abu Dhabi has been at the center of this strategy. Masdar and TotalEnergies signed a binding agreement on April 2 to establish a $2.2 billion joint venture combining their onshore renewable energy operations across nine Asian countries. The equal partnership will oversee 3 GW of operating assets and a development pipeline of 6 GW scheduled to come online by 2030. The projects span key markets including Japan, South Korea, Indonesia and Kazakhstan, reflecting a broader effort to secure long-term growth in regions with expanding clean energy demand.

At the same time, Mubadala Investment Company committed $325 million to the Hornsea 3 offshore wind project in the United Kingdom. With a planned capacity of 2.9 GW, Hornsea 3 ranks among the world's largest offshore wind developments. In early May, Mubadala also acquired a minority stake in Power Factors, a Massachusetts-based renewable energy software provider backed by Vista Equity Partners. The investments demonstrate how Gulf sovereign wealth funds are broadening their renewable energy portfolios beyond power generation into technology and infrastructure services.

While capital flows increasingly target overseas opportunities, domestic renewable projects across the Gulf are facing mounting challenges. Research from Rystad Energy indicates delays of three to twelve months across the Middle East's active renewable energy pipeline. Solar panel imports declined sharply during March 2026. The United Arab Emirates imported only 160 MW of photovoltaic modules compared with monthly averages of 767 MW in 2025. Saudi Arabia's imports fell from 704 MW to 80 MW, while Oman recorded no imports during the month.

Supply chain pressures have compounded these setbacks. Freight rates on the Asia-Mediterranean route climbed from $2,826 per container in late February to $3,594 in early April. China's decision to remove its export VAT rebate on April 1 added roughly 9% to module prices. Analysts warned that if disruptions continue through the second half of 2026, some renewable projects could face restructuring or be postponed until 2027.

The deteriorating security situation around the Strait of Hormuz has amplified these concerns. The United States imposed a naval blockade on Iran on April 13 following the collapse of talks in Islamabad. Iran responded by reaffirming its authority over the strategic waterway, with the Islamic Revolutionary Guard Corps asserting control over shipping transit. On June 1, Tehran announced it was ending negotiations with Washington and pledged to close the strait completely.

A draft agreement reported in late May proposed that Iran would restore commercial maritime traffic to pre-conflict levels within one month in exchange for the lifting of the U.S. blockade. Iranian officials maintained that any implementation would require tangible verification of commitments. With negotiations stalled and geopolitical risks elevated, Gulf governments increasingly view overseas renewable energy investments as a means to secure stable returns in markets where supply chains remain functional and political uncertainty is lower.