Trump plans $5 billion US investment to rebuild Middle East energy infrastructure: Report

The Trump administration has proposed investing $5 billion in a fund to help West Asian countries rebuild energy infrastructure damaged in the war with Iran and reduce their reliance on the Strait of Hormuz, the Wall Street Journal reported on Monday, citing US and Middle Eastern officials and documents.

Under the proposal, the United States would seek matching contributions from Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, Oman, Iraq and Jordan, with the aim of creating a $10 billion investment fund, the newspaper reported.

The fund, called the Partnership for Allied Trust and Construction, or Pact, would be managed by the US Development Finance Corporation, according to the report.

The discussions are ongoing and the terms of the proposed arrangement could change, and it remains unclear whether all the countries would agree to participate, the Journal reported.

The proposal comes as the seven-month conflict has disrupted energy markets and damaged pipelines, refineries and other energy facilities in the region.

The fund would seek to finance reconstruction as well as projects aimed at providing alternatives to the Strait of Hormuz for transporting oil and gas, the report said.

Some Middle Eastern officials questioned the timing of rebuilding energy infrastructure without a peace agreement with Tehran, according to the Journal, saying renewed Iranian drone and missile attacks could again damage facilities.

The proposed fund would be administered by the Development Finance Corporation, a US government agency that works with the private sector on projects linked to US national-security objectives.

Its programmes have historically focused largely on developing countries, rather than wealthy Gulf states, the Journal reported.

Iranian missile and drone attacks have damaged energy facilities across the region during the conflict. A drone attack earlier this month also disrupted a Saudi pipeline that provides an alternative route for crude exports, forcing more oil through the Strait of Hormuz.

The disruption has contributed to longer shipping routes and tighter tanker availability, pushing freight rates higher.

Gulf producers including the UAE and Iraq are also developing alternative routes for crude exports to reduce their dependence on Hormuz.

The cost of repairing damaged energy infrastructure across the region has been estimated at tens of billions of dollars, according to the Journal.