Saudi Arabia is scaling back, suspending, or burying flagship Vision 2030 projects due to the ongoing war with Iran [2].
These adjustments threaten the core of Crown Prince Mohammed bin Salman's strategy to diversify the Saudi economy away from oil. The curtailment of these projects suggests a significant shift in the kingdom's ability to fund its most ambitious architectural and economic goals.
The conflict has severely impacted the state's financial capacity by closing the Strait of Hormuz. This closure has slashed oil export volumes, leading to a reduction of around 30 percent in Saudi oil exports since the war began [2].
Because the government relies heavily on energy sales, the drop in volume has reduced state revenue and widened fiscal deficits. The projected fiscal deficit for 2025-26 is about 150 billion Saudi riyals [3].
These financial pressures have forced the government to cut spending on large-scale developments in Riyadh and other designated zones [1, 2]. The overall investment value of the Vision 2030 initiative is approximately $1 trillion [1].
There is disagreement among observers regarding the primary cause of these setbacks. Some reports said the war with Iran is the primary driver of the current scaling-back [2]. However, other reports said the grand vision was already crashing into reality before the conflict broke out [1].
Despite the internal debate on the root cause, the result remains a series of suspended or reduced projects across the kingdom as the state prioritizes war-related expenditures and fiscal stability.
“Vision 2030 projects are being scaled back, suspended, or quietly buried because of the war with Iran.”
The scaling back of Vision 2030 indicates that geopolitical stability in the Strait of Hormuz is a prerequisite for Saudi Arabia's economic transformation. If the conflict persists, the kingdom may be forced to permanently abandon certain 'giga-projects,' signaling a transition from an era of aggressive expansion to one of fiscal survival and defensive spending.
