Asian Banks Cautiously Resume Gulf Lending Despite Iran Risks

Asian banks are cautiously resuming Gulf lending after pausing activity due to the Iran conflict earlier this year. This article explains why lenders are returning despite ongoing geopolitical risk, how much financing has flowed to borrowers like Qatar National Bank and Boubyan Bank, and why weak loan demand elsewhere in Asia is pushing banks to deploy surplus capital. It also covers the growing role of Chinese lenders in Gulf energy deals and how banks are now pricing risk on a deal-by-deal basis instead of avoiding the region altogether. Read on for the full breakdown of numbers, borrowers, and what this shift means for future Gulf financing.

September 2, 2026

Capital Tests Geopolitical Risk

Asian banks are stepping back into Gulf financing after months of hesitation triggered by the Iran conflict, signalling that lenders are beginning to look past the risk rather than avoid it entirely. In August, major borrowers, including Qatar National Bank, Boubyan Bank and Kuwait's sovereign wealth fund, secured financing from Asian lenders and other institutions. The shift comes not because the conflict has resolved, but because a lack of deal flow elsewhere has left banks holding capital they are eager to put to work.

Lending Returns Selectively

At the moment, bankers in Asia appear to be willing to take a certain level of risk linked to the Iran conflict, particularly since the situation has so far avoided the most disastrous results that were feared at the start of the year. Nevertheless, the present situation by no means stands on any unconditional basis; it is said that decisions are being made on a case-by-case basis and that the internal safeguards that the banks put in place when the conflict first began are still fully operational.

Moreover, it is reported that Saudi Energy Co. is now entering negotiations for a $300 million loan, the arrangement being backed by a major Chinese lender, which in turn shows that Chinese banks are expanding their involvement in financing Gulf energy projects. In 2025, Asian lenders supplied more than $17 billion to borrowers in the Gulf, a sum that is nearly three times the amount lent in 2024 and thus represents a record for the region, with the majority of the funds going to Saudi Arabia and the UAE.

Risk Reprices Capital Access

One of the reasons why banks are taking a cautious approach to lending again is not so much due to a revival of confidence as it is because of the need to act. Since the Asian syndicated loan market, with the exception of Japan, is experiencing its most difficult period in about 16 years, banks have had to look more closely for solid credits that can take on their excess liquidity.

Although geopolitical uncertainties continue, Gulf borrowers have long been regarded as reliable borrowers, supported by strong sovereign backing, and therefore meet this requirement. Yet the bankers anticipate that total lending volumes will remain restricted for the time being and do not expect their lending policies to become more lenient unless there is greater clarity regarding how the conflict unfolds. This situation means that borrowers still have access to capital, but it is becoming increasingly based on their individual creditworthiness rather than on general regional strategies.

Capital Follows Calculated Risk

The situation in the Gulf at the moment is not simply a resumption of normal activities but rather a revision of the way banks assess risk in relation to opportunity. Asian lenders are not disregarding the risks associated with the Iran conflict, but they are no longer allowing those risks to stop them from making every decision. It will be up to the coming months to decide whether this careful revival will turn into something more lasting or whether it will stay a narrow and selective reaction largely due to banks needing somewhere to put their capital.

Keep an eye on how rising geopolitical uncertainty is affecting the cost, the direction, and the availability of global capital.