Kuwait

Kuwait faces an 8.5% 12-month probability of a new armed-conflict onset on its territory, classified as a high risk. Its exposure reflects its location between Iran, Iraq, and Saudi Arabia; dependence on Gulf security; proximity to the Strait of Hormuz; and its role as a host and partner for U.S. forces. Kuwait’s history of invasion and occupation by Iraq in 1990–91 demonstrates that external conflicts can rapidly reach its territory despite strong alliances and substantial state capacity.

Recent reporting indicates that Iran launched missiles and drones toward Kuwait on September 3 in retaliation for U.S. bombardments, triggering air-raid sirens and interceptions by Kuwaiti air defenses. The Arab League condemned the attacks on September 4, while the broader Iran-U.S. confrontation continues to disrupt shipping through Hormuz and involve Kuwait alongside other Gulf states.

The largest uncertainty is whether these attacks remain limited retaliation or develop into repeated strikes, casualties, infrastructure damage, or ground operations. Further Iranian attacks, U.S. or allied military activity involving Kuwait, or a breakdown in Gulf de-escalation would raise risk; sustained interception, diplomatic backing, and containment of the Iran-U.S. confrontation would lower it. A Polymarket contract implying 2.9% for an Iranian invasion by October 31 provides narrower market context, not a measure of the full risk.