Experts have warned that the economic fallout from the conflict in the Middle East has become a major new threat to humanitarian aid efforts, as Gulf nations that have grown into significant aid donors may reprioritize their spending. Humanitarian groups are already grappling with sweeping cuts to foreign aid from traditional donors like the US and UK. The UN Office for the Coordination of Humanitarian Affairs (OCHA) is targeting just $23 billion (£17 billion) in humanitarian funding this year, a sharp decline from the $37 billion raised in 2024.
Gulf States as Major Aid Donors
While Western countries have signaled a retrenchment, Gulf states have become increasingly important donors in recent years. Last year, Saudi Arabia, the UAE, Qatar, Oman, and Kuwait collectively provided approximately $6 billion in humanitarian aid. This total surpasses the $4 billion contributed by the US, as well as the $1.9 billion, $1.4 billion, and $1.2 billion from the UK, Germany, and Japan, respectively. Much of this aid has been directed to crises in nearby regions, including Yemen, Gaza, and Syria.
Economic Impact of the Conflict
However, there are growing concerns that the economic repercussions of the current Middle East conflict—which has seen tourist hotspots attacked by drones and the closure of the Strait of Hormuz, a critical oil route—will lead to a reduction in foreign aid from these nations. Speaking at the Chatham House think tank, OCHA chief Tom Fletcher praised Gulf states for becoming “generous in this space” but warned that contributions have dried up during the war. “I don’t think we have taken very much at all from Saudi Arabia, Qatar, and the UAE over the past month,” he said. “Understandably, they’re inward looking, and feeling very defensive.”
Strategic Reprioritization
Dr. Neil Quilliam, an associate fellow at Chatham House, told The Independent that the war will significantly influence where Gulf states allocate their funds. He noted that the more “opaque” nature of their governing strategies means they may not publicly announce changes to aid spending as Western governments have done. “This war is having a significant impact on their budgets, and they’re going to have to reprioritize towards defence and the reconstruction of energy infrastructure that has been hit,” he said. “They’re also going to have to lower their ambitions for their national visions,” referring to the ambitious strategies to diversify their economies away from hydrocarbons. “We can surmise from that that they will probably pull back from some of their donor activity also,” he added.
An indication of this strategic shift came last week when Saudi Arabia’s $925 billion sovereign wealth fund published a new five-year plan prioritizing domestic investments. The plan also confirmed a move away from expensive giga-projects like The Line—a 100-mile steel and glass city in the Arabian Desert—which have uncertain financial returns.
Humanitarian Logistics Disrupted
Ongoing disruptions to shipping in the Strait of Hormuz are also raising concerns about devastating impacts on humanitarian operations, which rely on low-cost transit of commodities. “The UAE is specifically positioned as a key humanitarian logistics hub, which means that a lot of humanitarian supply chains have had to be rerouted,” Mike Pearson, research fellow at the ODI Global think tank, told The Independent. “Impacts to the wider economy will also have affected humanitarian operations, including around supplies of fuel and fertilizer, which are set to affect food supplies, and therefore food prices, later this year,” he continued.
Pearson noted that the current shock from the Iran War is the latest in a series of crises, starting with the Covid-19 pandemic, followed by Russia’s invasion of Ukraine, and then aid cuts from Western governments. “The bottom line for humanitarian groups is that these shocks increase costs, which ultimately means that they will be able to reach less people,” he said.
Global Humanitarian Needs Rising
Pearson’s comments come as a report by the NGO Mercy Corps warned that humanitarian crises across the Global South are already being seriously impacted. Examples include the closure of the Strait of Hormuz adding three weeks to delivery times for humanitarian supplies to Sudan, fuel prices in Somalia rising more than 150 per cent, and irrigation costs for farmers in Myanmar doubling. Meanwhile, aid groups are warning that humanitarian needs are increasing worldwide. According to the UN, over 239 million people require urgent humanitarian assistance in 2026, but OCHA plans to support only the 87 million with the “most severe humanitarian needs” due to shrinking budgets. The Red Cross has also warned that wars have become a “defining feature of our time,” with numerous humanitarian crises from conflicts being overlooked.
This article is part of The Independent’s Rethinking Global Aid project.
