The Middle East Crisis: A Practical Guide for Finance Transactions – Part 1

The current escalation of geopolitical tensions in the Middle East is materially affecting logistics, trade routes, insurance markets and supply chains across the region. The crisis has already disrupted maritime transit through the Strait of Hormuz, a critical energy corridor through which roughly 30% of global seaborne oil flows normally pass.

Shipping suspensions, rerouted trade flows and heightened war-risk insurance premiums are now common features of regional commerce. In some cases, cargo routes are being diverted around Africa, adding weeks to transit times and increasing costs.

For banks structuring finance transactions in the Middle East – whether project finance, trade finance, acquisition finance or structured commodity transactions – these developments create practical operational challenges that can delay closings or impair transaction performance. Structuring teams therefore need to adjust deal mechanics to ensure that transactions remain operationally workable under stressed geopolitical conditions.

Practical checklist for structuring and closing finance transactions during conflict

The checklist below highlights key pressure points currently affecting the structuring and closing of finance transactions in the Middle East and sets out practical approaches that deal teams can adopt to help ensure transactions remain executable despite operational disruption.

Conditions precedent (CP) timelines

Issue

• Traditional CP timelines assume relatively predictable execution logistics, regulatory processing times and document circulation.
• During geopolitical disruption: Travel restrictions and security concerns may delay signings.
• Supply chain disruptions can delay technical reports, insurance confirmations or collateral documentation.
• Government authorities may experience administrative delays.

In some cases, logistics disruptions caused by conflict – including shipping delays and rerouting – can extend project procurement timelines by several weeks.

Practical solutions

Build extended CP longstop dates

• Include longstop dates 30–60 days longer than standard market timelines.
• Allow automatic extensions triggered by force majeure or conflict-related disruptions.

Introduce staged CP frameworks

• Split CPs into: Closing CPs – limited to core legal and regulatory deliverables.
• Post-closing CPs – e.g. insurance endorsements, technical reports or non-material registrations.

Permit conditional CP satisfaction

Allow certain CPs to be satisfied via:

• Undertakings.
• Comfort letters.
• Escrow arrangements.

With full documentation delivered post-closing.

Use Materiality thresholds

Require that failure to deliver a CP must materially affect the borrower’s ability to perform obligations, preventing minor logistical delays from blocking closing.

Use conditions subsequent

Allow certain CPs to de delivered as conditions subsequent.

Execution logistics and document signing

Issue

Conflict conditions can disrupt:

• Travel for signatories.
• Courier services.
• In-person notarisation requirements.
• Embassy legalisation processes.

These challenges are particularly acute where documents require wet-ink execution or physical registration.

Practical solutions

Default to electronic execution

• Where legally permissible: Use e-signatures and electronic closing platforms.
• Pre-confirm enforceability in each relevant jurisdiction.

Prepare alternative signing mechanics

Include provisions allowing:

• Power of attorney execution.
• Board-authorised signatory substitutions.
• Split signings across jurisdictions.

Digitise closing deliverables

Circulate:

• Electronic constitutional documents.
• Digital board resolutions.
• Scanned notarised copies.

with originals delivered later if required.

Pre-position signatories

Where physical signatures are unavoidable:

• Appoint local authorised signatories.
• Hold pre-signed signature pages in escrow.

Regulatory approvals and government consents

Issue

Regional instability can slow approvals from: Central banks.

• Foreign investment authorities.
• Sector regulators.
• Ministries responsible for energy or infrastructure projects.

Administrative backlogs and security restrictions can significantly delay transaction timelines.

Practical solutions

Early engagement with regulators

Initiate informal pre-filing consultations before documentation is finalised.

Parallel processing

Submit regulatory filings in parallel with financing documentation negotiation, rather than waiting until after signing.

Conditional drawdowns

Allow funding to occur:

• In tranches.
• Subject to receipt of specific regulatory approvals rather than requiring all approvals prior to closing.

Government liaison advisors

For large infrastructure or project finance deals:

• Appoint local regulatory consultants.
• Maintain direct communication channels with ministries.