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Energy Fund to Boost Saudi-US Strategic Investments

Heads of companies investing in the energy fund (Asharq Al-Awsat)
Heads of companies investing in the energy fund (Asharq Al-Awsat)
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Energy Fund to Boost Saudi-US Strategic Investments

Heads of companies investing in the energy fund (Asharq Al-Awsat)
Heads of companies investing in the energy fund (Asharq Al-Awsat)

A $5 billion energy investment fund was unveiled in Riyadh on Tuesday during the Saudi-US Investment Forum, held in conjunction with US President Donald Trump’s visit to the kingdom, in a move aimed at boosting bilateral partnerships and stabilizing the global energy sector.

The White House announced in a statement that the fund was among several key initiatives agreed during Trump’s visit, calling it a “historic step” toward deepening economic cooperation between the United States and Saudi Arabia.

Scott Pruitt, who served as the Administrator of the Environmental Protection Agency (EPA), told Asharq Al-Awsat the fund will target strategic investments in the energy sector, focusing primarily on US-based companies.

These include firms supporting existing energy hubs and those developing transitional technologies to advance the global energy future and promote efficient manufacturing.

Pruitt said the fund aligns with Saudi Arabia’s Vision 2030, aiming to invest in companies that can benefit from the kingdom’s business environment while also supporting energy-related infrastructure, services, and manufacturing in the US.

The fund is expected to begin deploying its $5 billion capital in 2025, he added.

Strategic Investment in Energy

Neil Bush, chairman of Skytower Investments, a green technology investment firm, said the energy fund brings together experienced partners in fund management and energy investment.

He noted that it will play a critical role in directing strategic capital toward the future of global energy and efficient production.

The fund naturally targets the development of US infrastructure, bolstering America’s leadership in global energy markets and delivering strong returns to investors, Bush said.

Launched during President Trump’s visit, this initiative sends a strong signal of renewed economic momentum between Washington and Riyadh.

Saudi businessman Abdullah Al-Meleihi, CEO of Saudi Excellence Co., described the fund as more than a capital mechanism, calling it a “bridge of trust and ambition” between the two countries.

He emphasized Trump’s role in creating a climate conducive to innovation and opportunity.

Al-Meleihi said the fund is expected to be fully established and financed in 2025, characterizing it as a model of public-private cooperation and strategic alignment between the US and Saudi Arabia.

He noted that it enjoys robust support from the private sector in both countries as well as international investors, and will focus on energy, technology, artificial intelligence in energy, and advanced industries, while also facilitating knowledge transfer to the kingdom and capital investment in the US.

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US Involvement in Iran-Israel Conflict Raises Fears of Strait of Hormuz Closure

A general view of the Strait of Hormuz (Reuters)
A general view of the Strait of Hormuz (Reuters)
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US Involvement in Iran-Israel Conflict Raises Fears of Strait of Hormuz Closure

A general view of the Strait of Hormuz (Reuters)
A general view of the Strait of Hormuz (Reuters)

As the conflict between Iran and Israel intensifies, experts warn that direct US involvement could trigger a dangerous escalation, most notably, the closure of the Strait of Hormuz, a critical global energy chokepoint.

If Iran were to follow through on this long-standing threat, the consequences would be severe, cutting off roughly 20% of the world’s oil exports and 30% of global natural gas shipments.

Russian strategic analyst Andrey Ontikov told Asharq Al-Awsat that fears remain real and growing, particularly if the war expands.

If the United States is drawn into the war alongside Israel, the likelihood of Iran moving to close the Strait of Hormuz becomes the most serious and effective threat, he said.

Ontikov explained that such a move would paralyze global energy flows from the Gulf, sending oil and gas prices soaring and inflicting major economic damage on both exporting and importing nations.

The resulting disruption would directly affect international shipping, raise transport and insurance costs, and cause energy prices to spike, further straining already fragile global supply chains, he added.

He also warned that broader geopolitical implications are at stake. A regional war involving the Strait of Hormuz could jeopardize key trade corridors, including China’s Belt and Road Initiative and Russia’s North-South transport corridor.

That would have a direct economic impact on both Beijing and Moscow, forcing countries to look urgently for alternative trade routes, Ontikov said.

Oil prices are already rising, though Ontikov believes that if tensions ease, the global economic impact could be contained. However, a prolonged or widened war would paint a far more troubling picture.

Saudi economic expert Dr. Ibrahim Alomar, head of Sharah Consulting, echoed these concerns.

“If the conflict stays limited, the effects may include a temporary $10–$20 increase in oil prices and limited disruption to financial and shipping markets,” he said. “But a broader war could push oil prices above $120, causing inflation and a sharp global economic slowdown.”

Alomar warned that in the worst-case scenario - where the Strait of Hormuz is fully closed - oil prices could skyrocket past $200, triggering hyperinflation, severe recession, and a collapse in global financial markets.

“Such a scenario could ultimately reshape the global economic system, depending on who emerges least damaged from the crisis,” he concluded.