No loans for Gulf as Iran war spooks Asian lenders

Core Insights - The sentiment towards financing in the Middle East has sharply reversed from optimism to caution due to escalating military operations in the region [2][10][14] - Asian lenders had previously viewed the Middle East as a key growth engine for 2026, with significant loan commitments and a rise in syndicated loan volumes [7][9][14] Industry Trends - Syndicated loan volumes to the Middle East and North Africa increased by 12% to approximately $180 billion in 2025, while Asia Pacific loan volumes excluding Japan fell by about 18% [7][14] - Chinese banks significantly increased their lending to the region, nearly tripling to a record $15.7 billion in 2025, driven by low-cost funding and weakening domestic credit demand [9][14] Company Actions - Several global lenders, including HSBC and Standard Chartered, are reassessing their ambitions in the Gulf and have indicated that some transactions involving Asian balance sheets will need to be paused [5][14] - A major Singaporean bank has shelved its Middle East expansion plans for 2026, pausing discussions that were previously underway [6][14] - Some banks from Japan, Greater China, and Singapore are considering shifting their focus to more stable markets like South Korea and Australia [5][14] Market Reactions - The ongoing conflict has led to extreme volatility in oil and gas markets, unsettling global finance and disrupting transportation routes [10][14] - A major Chinese bank has restricted a drawdown on a bilateral facility linked to the Abu Dhabi government, reflecting heightened caution among lenders [11][14]