Saudi Arabia's Vision 2030 Under Pressure Amid Regional Conflict
The war between the US/Israel and Iran is disrupting Saudi Arabia's ambitious plan to diversify its economy away from oil, deterring foreign investment and impacting key projects.
The Challenge to Vision 2030
Launched in 2016, Vision 2030 was designed to reduce Saudi Arabia's dependence on oil by transforming the kingdom into a global hub for tourism, technology, and culture. The plan, overseen by Crown Prince Mohammed bin Salman, is funded in large part by the Public Investment Fund (PIF).
However, the ongoing conflict between the US/Israel and Iran has created a "worst-case scenario" for the kingdom, according to Michael Ratney, former US ambassador to Saudi Arabia. The country finds itself "right in the middle" of the war.
Key Disruptions
Foreign Investment Deterred
The war has disrupted funding by deterring foreign direct investment. Saudi Arabia seeks approximately $140 billion in foreign investment to fuel its transformation, but instability has significantly reduced investor confidence.
Dr. Neil Quilliam of Chatham House notes that the conflict "deters international investors and hinders Saudi Arabia's ability to attract foreign direct investment."
Oil Exports Under Threat
Oil exports have been affected by disruptions through the Strait of Hormuz, a critical chokepoint for global energy supplies. Saudi oil infrastructure, including the East-West oil pipeline, has been attacked by Iran but has since been repaired.
Budget reports from late 2025 showed that over half of annual revenue still comes from oil, underscoring the challenge of diversification.
Giga-Projects Scaled Back
Some flagship projects have been affected:
- NEOM and The Line — the crown jewels of Vision 2030 — have been scaled back or delayed.
- Yasir Al-Rymayyan, head of the PIF, stated that "no NEOM project has been canceled, but some have been postponed" as spending is being reprioritized.
- LIV Golf funding may also face cuts.
"No NEOM project has been canceled, but some have been postponed."
— Yasir Al-Rymayyan, PIF Governor
Sports Investments Continue
Despite these challenges, Saudi Arabia continues to pursue major sports investments, a strategy critics call "sportswashing" — using sports to distract from human rights issues.
Key moves include:
- Hosting the 2034 FIFA World Cup
- Signing top athletes like Cristiano Ronaldo
- Ongoing investment in LIV Golf
Ben Harburg, owner of Saudi football club Al Kholood, said the kingdom has become "a global axis for sport."
"Saudi Arabia has become a global axis for sport."
— Ben Harburg, Al Kholood owner
Western Business Interest Remains
Despite international criticism over human rights issues — including the murder of journalist Jamal Khashoggi — Western business interest has not been deterred.
James Montague, author and journalist, observed that the Khashoggi killing "has not deterred Western business interest, especially under the Trump administration."
The Bottom Line
The conflict presents an ongoing threat to Saudi Arabia's diversification timeline. With over half of revenue still tied to oil, foreign investment under pressure, and flagship projects facing delays, Vision 2030's ambitious goals are being tested by regional instability. The kingdom's ability to balance its long-term economic transformation with immediate geopolitical challenges will be crucial in the years ahead.