Arab Gulf oil producing countries will embark this year and next on a “massive accumulation of foreign assets” as they cash in on record oil prices and soaring worldwide petroleum demand, a new report says.

The region will buy about $360bn (€290bn, £200bn) of foreign assets, from bonds to property in 2005 and 2006 – 50 per cent more than their total purchases of the past five years, according to a study by the Institute for International Finance, the leading association of private banks. “The Gulf Co-operation Council [countries] are in the midst of a period of exceptional economic performance,” says the IIF, which specialises in tracking capital flows in emerging markets.