The United States is considering a $5 billion fund to repair energy infrastructure in the Middle East damaged during the war with Iran. According to the Wall Street Journal, the proposed fund, called Partnership for Allied Trust and Construction (PACT), aims to support the reconstruction of damaged energy facilities. The US proposal is part of a larger $10 billion goal, with other regional countries expected to contribute. The plan is under discussion with governments in the region.
The $5 billion US contribution would be matched by an equivalent amount from eight regional partners: Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, Oman, Iraq, and Jordan. However, these contributions are not yet guaranteed, and no definitive agreement on financing has been announced. The US International Development Finance Corporation (DFC) would manage the fund if the project moves forward. The investments would focus on energy capacities affected by the conflict.
The war with Iran has caused significant damage to energy infrastructure in the region. QatarEnergy announced on September 21 that attacks on the Ras Laffan complex had resulted in a loss of around 17% of Qatar's liquefied natural gas production capacity. Some units may require up to three years of work to restore. The conflict has also disrupted traffic through the Strait of Hormuz, a critical passage for oil and petroleum products.
The PACT project aims not only to repair damaged infrastructure but also to finance new capacities that would allow producers to export energy without relying on the Strait of Hormuz. The strait was a crucial passage before the conflict, with 20.9 million barrels of oil and petroleum products transiting daily in the first half of 2025. This volume accounted for around 20% of global liquid petroleum consumption.
The conflict has significantly impacted energy exports through the Strait of Hormuz. In the second quarter of 2026, the strait saw only 4.9 million barrels per day of traffic, down from over 21 million barrels daily at the end of 2025. Producers are exploring alternative routes, including temporary solutions such as oil transfers between ships in Oman's region, which incur additional transportation costs.
Several questions remain unanswered before the fund can be implemented. Regional officials cited by the Wall Street Journal express concerns that new infrastructure may remain vulnerable to attacks as long as hostilities continue. The challenges also extend to maritime transportation, with Reuters reporting that the circulation of ships carrying raw materials through Hormuz remains much lower than pre-war levels.
The US proposal of $5 billion for the PACT fund is still under discussion, and the $10 billion goal depends on contributions from regional partners. The plan's success will depend on the outcome of ongoing talks with governments in the region. If implemented, the fund would support the reconstruction of damaged energy infrastructure and help restore regional energy exports.
Key points
- The US proposes $5 billion for a fund to repair Middle East energy infrastructure damaged during the Iran war.
- The fund aims to support the reconstruction of damaged energy facilities and finance new capacities to reduce reliance on the Strait of Hormuz.
- The plan's success depends on contributions from regional partners and the outcome of ongoing talks with governments in the region.
