Saudi Arabia has abandoned its aspirations to host the 2035 Rugby World Cup as a result of the Public Investment Fund’s new financial strategy.

The sports minister, Prince Abdulaziz bin Turki al-Faisal, confirmed Saudi Arabia’s interest in bidding for the tournament last year, but the Guardian has learned that the kingdom has not submitted an expression of interest to World Rugby and has no plans to do so before the bidding process closes in October. The president of Asia Rugby, Qais al-Dhalai, also talked up a joint Middle East bid from Saudi Arabia, Qatar and the United Arab Emirates last year, but that has not materialised either.

World Rugby’s bidding process for the 2035 tournament opened last October, with Argentina, Japan and Spain among the countries understood to have submitted initial expressions of interest. The deadline for submitting a formal bid is not until October 2026 so Saudi Arabia and the other Gulf countries still have time to reconsider, but there is no expectation they will do so.

After examining the bids and conducting site visits, World Rugby will identify a preferred bidder in May 2027 before a formal appointment is made by the World Rugby Council the following autumn, with an announcement timed to coincide with that year’s tournament in Australia.

Saudi Arabia’s decision to put its rugby aspirations on hold is a part of what PIF described as the “value realization” phase of its Vision 2030 economic plan published this week.

LIV Golf is to be the highest-profile casualty of PIF’s insistence on prioritising projects that can produce a return, with the rebel tour’s funding to be withdrawn next year, which will result in the teams requiring significant private investment for the league to continue.

PIF will continue to invest in sport but plans to focus on domestic projects, such as infrastructure related to the 2034 football World Cup and the Formula One track near Riyadh, which is due to open next year.

While the economic uncertainty caused by the war in Iran is likely to have some impact on PIF’s spending plans, the decision to step away from a 2035 Rugby World Cup bid is understood to have been taken before the conflict began at the end of February.

In an interview with the state-owned television channel Al Arabiya on Thursday, the PIF governor and LIV chair, Yasir al-Rumayyan, confirmed that all its spending projects are being reviewed.

“I can’t tell you I will cancel this investment or get into another investment,” Rumayyan said. “It is a dynamic [situation] with or without war. But, of course, the war would add more pressure to reposition some priorities.”

Qatar’s interest in rugby is more advanced and it has agreed a deal to stage the second final series of the new Nations Championship in 2028, with the first event to take place at Twickenham this autumn.

Unlike Saudi Arabia, Qatar already has all the stadiums and infrastructure in place that is required to stage global events, but its focus at present is bidding for the 2036 Olympics.