Kuwait sits at a geopolitical crossroads – sharing maritime borders with Iran and land borders with Iraq and Saudi Arabia. Right now, the country finds itself directly involved in the dynamics of the US-Israel-Iran conflict and is becoming a live test case of how kinetic conflict and proxy networks converge inside a single jurisdiction.

Financially, the effects on deal flow are already materialising. Kuwait is seeking private offers for a major pipeline network transaction, but financial services provider, Macquarie has walked away, citing the Iran conflict and uncertainty about the long-term outlook. Airspace restrictions, port security incidents, and declining foreign investment are impacting energy and infrastructure sectors.

The market response has been telling. Kuwait was among the few Gulf markets to halt stock exchange trading entirely – a more conservative stance than its GCC peers. The decision was made intentionally to safeguard investors and address market uncertainties. Kuwaiti banks followed suit, suspending operations at key headquarters from 8 March 2026 as a preventive measure, reflecting a cautious response to uncertainty rather than immediate operational risk.

Most significantly, Kuwait has taken a proactive security posture. Since 16 March, Kuwait’s interior ministry has arrested over 20 individuals with reported links to Lebanese Hizballah – a designated terrorist organization that operates as an IRGC proxy in the region. Security forces seized drones, firearms, ammunition, and equipment during their operations. Since the onset of the conflict, Kuwait was the first GCC country to actively arrest cells reportedly planning sabotage operations on its territory, with UAE following suit on 20 March and conducting similar arrests.

For businesses operating in Kuwait and across the Gulf, these developments demand a sharper due diligence lens.

FACT can help by:

• Screening counterparties and UBOs for links to Hizballah and IRGC-connected networks using advanced databases and regional expertise.
• Applying enhanced due diligence and advanced risk analysis across financial and infrastructure sectors.
• Converting rapidly evolving geopolitical events into comprehensive risk assessments for businesses.

Kuwait is a jurisdiction where the stakes have materially shifted. Is your due diligence keeping pace?