Unhappy neighbours: Saudi Arabia and the UAE

Ref: ADS-56

Summary: it has been a long time since the UAE and Saudi Arabia have seen eye to eye and the Iran war and subsequent MOU have done little else but paper over the cracks.

We thank Helen Lackner for today’s article. An expert on Yemen, Helen also works as a freelance rural development consultant with a particular interest in water, among other environmental issues. SAQI Books has published the paperback edition with new material of her Yemen In Crisis, now subtitled Devastating Conflict, Fragile Hope. Her latest book is Yemen: Poverty and Conflict published by Routledge. You can find Helen’s most recent Arab Digest podcast A black eye in Yemen for the UAE here.

While the UAE joined Saudi Arabia, Qatar and other Gulf states in calling for an end to the war in Iran just before the 15 June Memorandum of Understanding was announced, it was something of a volte-face. Earlier in the conflict the UAE had offered encouragement to Israel and the US to pursue the war and even actively participated in air raids on Iran at a time when other Gulf Cooperation Council [GCC] states were struggling to bring the conflict to an end. So, while it is true joint action and cooperation between Saudi Arabia and the UAE will certainly continue when circumstances demand, tensions between them have developed into a fundamental feature of regional geopolitics.

An important recent development was the UAE’s exit from OPEC. Although friction between Saudi Arabia and the UAE over oil production have been a live issue since at least 2021, this break will have a lasting impact on prices. Once the Hormuz Strait constraints are solved and countries have rebuilt their strategic stocks, in a world where demand for oil drops thanks to renewable alternatives, the UAE exporting an additional million barrels per day [from its OPEC quota of 3.45mb/d to its current capacity of 4.85mb/d or more], alongside reduced sanctions on Iranian oil, will contribute to a slump in world oil prices. States most dependent on oil income, Saudi Arabia being one of them, will feel the pinch. The regime in Riyadh is likely to interpret the Emirati withdrawal from OPEC as a direct threat to the Saudi economy.

Saudi Arabia and the UAE have almost identical long term development strategies – which the latter has gone a long way to achieving – to reduce dependence on hydrocarbon exports and broaden their economies with giga real estate projects, tourism, advanced technology with an emphasis on AI and developing industry sectors using alternative sources of energy. The same strategy is used: cooperation with the US and its major companies, with promises of mutual foreign investment locally and in the US. Politically, they share authoritarianism, have similar policies with respect to Russia; both are developing their economic relations with China and are strategically located between Europe and East Asia, an advantage for their international state-owned airlines and for maritime trade.

In most sectors, the UAE has a two decades lead over the Saudi regime which only initiated its Vision 2030 modernisation trajectory a decade ago. Saudi Arabia, however, has the advantage of geographical size and a population three times that of its Gulf neighbour, mostly nationals, in sharp contrast to the UAE where at best 10% are nationals. Holding that national population advantage the Saudis can, for example, look to internal tourism continuing to expand whereas one of the lasting impacts of the US-Israeli Iran war could see a significant reduction of international visitors and wealthy foreign settlers in the UAE.

The GCC free trade agreement enabled the UAE to establish a series of ‘free zones’, mostly in Dubai. In July 2021, the Saudi regime ended free trade for produce from free zones, imposing tariffs on these products thus reducing the potential of this UAE asset. The same year, it decreed that all major international companies operating in the kingdom must have their HQ there leading to more than 660 companies moving to Riyadh, despite the fact that living conditions in the Saudi capital are not yet quite as relaxed as in Dubai.

Another significant difference is the UAE’s proven military effectiveness. Since 1990, its forces have been involved in US-led and other operations in Afghanistan, Somalia, Kosovo, Libya, Iraq and Yemen, achieving the moniker of ‘little Sparta’ bestowed by senior US military staff. By contrast, the Saudi military are widely reputed to be little more than a ‘parade’ army.

However in December 2025 in a show of military muscle after the UAE backed a Southern Transitional Council (STC) bid to seize Yemen’s easternmost governorates, the Saudis bombed two Emirati ships in the port of Mukalla bringing to a head the long simmering dispute over how each side has managed their engagement in the still unresolved Yemen conflict.

Internationally, differences have worsened in recent years. In addition to Yemen, they are most acute in Sudan where the Saudis and Emiratis are on opposing sides: Saudi Arabia, with US support, is trying to mediate the conflict and supports the ‘official’ armed forces, while the Emiratis continue controversial assistance to the Rapid Support Forces (RSF) who stand accused of committing genocide. In 2025 the rivalry intensified with UAE support for a RSF parallel governing entity and the Saudis establishing a coordinating council with the government led by General Burhan the head of the Sudanese Armed Forces (SAF).

Beyond Sudan, UAE-Saudi tensions are also worsening around the Red Sea, involving a complex set of issues in Egypt, Somalia and Ethiopia. While Saudi Arabia now has a base in Djibouti, the UAE were expelled from there in 2018 and set up their base in Berbera in Somaliland with additional facilities in Eritrea. The Saudis have excluded the UAE from the Red Sea Council created in 2020 (which six years on is little more than a paper organisation.) Meanwhile, the UAE encouraged Israel to recognise Somaliland, the first state in the world to do so, threatening Saudi dominance on the shores of this essential maritime outlet. The Somaliland intervention further underlined the extent of UAE-Israeli cooperation. Saudi Arabia in response is building a rising alliance with Türkiye and Pakistan, supported by Egypt and Qatar.

The early days of the mentor-mentee relationship between Mohammed bin Zayed [MbZ] of the UAE and Mohammed bin Salman [MbS] of Saudi Arabia are long forgotten. Ignoring the fact that he became crown prince thanks to UAE support through its influential ambassador to Washington Yousef al Oteiba, MbS stopped listening to MBZ early on, to the latter’s dismay. The high point of Saudi-UAE cooperation, also at the root of future divergence, was the blockade of Qatar between 2017 and 2021. Initiated by the UAE, the Saudis forced on the Emiratis the 2021 reconciliation that ended the blockade. In late 2022, competition had reached a level of overt hostility, with reports that MBS told reporters the UAE had ‘stabbed us in the back’ a statement he accompanied with a threat to retaliate.

The UAE’s policies challenge not only the Saudis but also the GCC as a viable entity. For decades the GCC pretended to be a cohesive group of like-minded autocracies, despite being unable to establish meaningful shared institutions, such as a common currency or air defence platforms. Both Saudi Arabia and the UAE claim international status as middle ranking world powers. The extent to which they have over the years used oil wealth to acquire the most sophisticated military hardware on offer attests to that. Although the deepening rivalry is unlikely to lead to serious armed confrontation, it will intensify. While the US-Israeli war on Iran, and the consequent Iranian strikes on various facilities throughout the Gulf Cooperation Council, have temporarily given the two states reason to muffle their disagreements, the deep split between on the one hand the UAE and Israel and, on the other, Saudi Arabia, other GCC and Arab states, alongside Türkiye is likely to be a lasting feature of regional politics for years to come. And though the Red Sea and surrounding states are also likely to become prominent, Yemen may remain the most visible site for the rivalry to play out.