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Saudi Arabia's dilemma as it tries to stay out of US-Iran war

July 29, 2026

Saudi Arabia finds itself in a challenging position as it attempts to avoid full involvement in the US-Iran war that began in February 2026. After enduring attacks from Iranian proxy forces in Iraq, Houthi militants in Yemen, and strikes on multiple fronts, the Kingdom conducted joint military operations with the US against Iraqi militias launching drone attacks. Saudi Arabia's Crown Prince Mohammed Bin Salman is trying to protect his Vision 2030 economic diversification program, which requires foreign investment and stable infrastructure, both of which are threatened by ongoing regional conflict.

Who is affected

  • Saudi Arabia and Crown Prince Mohammed Bin Salman
  • Iranian Islamic Revolutionary Guards Corps (IRGC)
  • Houthi militants in Yemen
  • Popular Mobilisation Forces (Iraqi paramilitary groups)
  • Hezbollah in Lebanon
  • US Central Command forces
  • Gulf Arab states (Kuwait, Bahrain, Jordan)
  • Israel (as a US ally)
  • Foreign investors in Saudi Arabia
  • Saudi graduates and job seekers
  • Commercial shipping companies operating through the Strait of Hormuz

What action is being taken

  • Saudi Arabia and the US are conducting joint strikes on Iranian proxy militias in Iraq
  • Iran is concentrating drone and missile attacks on Jordan, Kuwait, and Bahrain
  • Iran is targeting commercial shipping attempting to transit the Strait of Hormuz
  • Iraqi militias are launching drone strikes on Saudi Arabia
  • Houthis are attacking regional Saudi airports at Abha and Jizan
  • Saudi Arabia is pumping approximately five million barrels of oil per day through their east-west pipeline to the Red Sea export terminal at Yanbu

Why it matters

  • This conflict threatens Saudi Arabia's Vision 2030 economic transformation plan, which aims to diversify the Kingdom away from oil dependence and attract foreign investment. The ongoing attacks jeopardize critical infrastructure including data centers and oil facilities, making it difficult to create the stable environment needed for economic development and job creation for hundreds of thousands of young Saudis. The 2019 drone attacks on Abqaiq and Khurais oil facilities demonstrated Saudi Arabia's vulnerability, having knocked half of its oil exports offline for several days. Additionally, Iran's effective closure of the Strait of Hormuz—through which 20% of the world's oil and liquified natural gas previously traveled—has major implications for global energy markets and Saudi Arabia's ability to export its primary revenue source.

What's next

  • No explicit next steps stated in the article

Read full article from source: BBC