Gone are the days when Saudi Arabia was regarded as a guardian of Arab unity and Islam’s holy sites within the Arabian Peninsula by its neighbours, both near and far.
The process was speed up by the formation of Gulf Cooperation Council GCC in 1998, as it relegated Saudi Arabia’s position among its nearest neighbours to that of a “superior power.” The GCC governments started to question the Saudi superpower’s status quo over time as their own economies grew and they began to pursue their own national interests-based geopolitical connections and directions.
While rivalry among oil-rich nations is rampant today, the UAE and KSA are forging the most potent new rivalry in the Persian Gulf thanks to their frequently radically different worldviews.
The UAE has spent extensively on an American buffer, becoming possibly Washington’s closest Arab partner today. Qatar, like the UAE, opened its borders to the US Military Central Command headquarters as leverage against Saudi pressure and as a way to realise its own regional objectives.
Abu Dhabi is said to have spent $4 billion on lobbying groups and other strategic investments to improve their relationship with Washington. The Emiratis have a lot of money and spend a lot on their military. They have also built up mercenary armies that are currently fighting in Somalia, Libya, and Yemen. All of these things have paid off, and the UAE is now in a good position to challenge Riyadh in the GCC and make its own regional policies without the kingdom’s dictates.
Points of contentions between UAE and Saudi Arabia
Competition between Saudi Arabia and the United Arab Emirates is not new. The Treaty of Jeddah was negotiated between the two young states in 1974 in an effort to settle their longstanding territorial and resource disputes.
In particular, Saudi Arabia demanded that the oil-rich Buraimi Oasis be handed over to it before it would recognise the United Arab Emirates. Abu Dhabi eventually gave in and signed the pact, but in 2004, it began to dispute its contents, arguing that there were discrepancies between the oral agreement that had preceded the treaty and the treaty itself. This is a prime illustration of the lingering hostilities between the two countries that has yet to be resolved.
In an effort to enhance economic cooperation among member states, the GCC agreed to establish a common bank in 2009. This decision sparked another controversy among GCC members. Nonetheless, the United Arab Emirates raised objections when it was decided to set up the bank in Saudi territory, noting that they had already asked to host this joint venture five years prior.
However, the UAE eventually withdrew from the concept, and GCC talks about a common currency fell through.
At a time when the international community is trying to lessen its reliance on fossil fuels, Saudi Arabia and the United Arab Emirates are fighting an economic battle over oil exports. The United States and the European Union (EU) have both, in recent years, declared significant measures to reduce carbon emissions to counteract global warming.
In particular, Europeans hope to achieve a carbon-neutral economy by the year 2050, and they intend to stop selling automobiles powered by gasoline and diesel by 2035.
As a result, Abu Dhabi and Riyadh are competing to increase production faster than the other before declining global demand and resulting lower prices leave neither with enough revenue to adequately fund their respective governments’ budgets. The UAE is in a race against the clock to increase output to 5 million barrels per day by the end of this decade, and has spent over $122 billion to do so. In response, the Saudis have started increasing their own production capacity with the goal of producing 13 million barrels per day.
Furthermore, in 2019, oil earnings accounted for around 50% more of Saudi Arabia’s GDP than the UAE.
In a more recent public conflict, Persian Gulf neighbours Saudi Arabia and the UAE clashed in July 2021 at the OPEC+ Summit, when the UAE strongly opposed a Saudi decision to maintain oil production levels low until December 2022, calling the move “unfair” to the UAE.
In addition to oil trade, there is a great deal of rivalry between Abu Dhabi and Riyadh in other areas of commerce. For an estimated benefit of $18 billion to the Saudi economy, the kingdom authorised 44 foreign firms to establish regional offices in the capital city of Riyadh in October. There was a catch to the deal, though: businesses with operations outside of Saudi Arabia would be barred from the country’s lucrative market.
The move was part of the kingdom’s effort to compete with the United Arab Emirates (UAE) for foreign investment and talent and become a regional commercial centre.
Companies that have not established their primary offices in Saudi Arabia by the end of 2023 will no longer be eligible to receive government contracts in the kingdom.
A disastrous cooperation in the war in Yemen
The disastrous war in Yemen has become a proxy battleground for the regional ambitions of Mohammed bin Salman and Mohammed bin Zayed and their rivalry with older regional countries like Iran and Turkey.
Both the monarchy and the UAE entered the now six-year-old war with divergent priorities and expectations for its outcome.
The United Arab Emirates wanted to secure control of Yemen’s ports and trade lanes, as well as the country’s strategic assets, such as the Bab el-Mandeb Strait. When it comes to Yemen, a country that has been under Saudi control for decades, the Saudis prioritize protecting their southern border from the ideologies of the Zaidi Shia and the Ansarallah resistance organisation, beliefs that reject all foreign intrusion.
In addition to its engagement throughout Yemen, the United Arab Emirates has sought diplomatic connections in the region at the expense of Saudi Arabia. Recent Emirati initiatives have focused on strengthening connections with countries Riyadh maintains a substantial distance from, such as Turkey, Israel, Syria and Iran.
The Iranian dilemma
It is unrealistic to expect Saudi Arabia to quickly end its long-standing regional rivalry with the Islamic Republic, which has been worsened by the conflicts in Yemen and Syria. Since it is not seen as ‘leading’ those conflicts, like the Saudis, and because it does not consider Iran a “menace,” like the Saudis, the United Arab Emirates has the freedom to reduce tensions with Iran without losing political leverage.
Because of the sizeable Iranian diaspora in the UAE and their involvement in the local economy, Abu Dhabi has economic incentive to keep open lines of communication with Iran, a country with which it engages in major trade. The Biden administration’s desire to advance nuclear talks with Iran and Tehran’s ability to influence the events in Afghanistan and other critical neighbouring states are other factors in the country’s decision to prioritise economic diplomacy over harsh actions.
The United Arab Emirates (UAE) seeks power balance with the Saudis by keeping good relations with Iran, which might come in handy in the event of a major confrontation with Riyadh. During the economic blockade put on Doha by the kingdom from 2017-2021, Qatar did essentially the same thing, relying on Iranian aid to mitigate the consequences of sanctions.
Saudi Arabia is unable to negotiate an open peace with Israel because of its crucial position in the Islamic world. The so-called Abraham Accords were signed in September 2020, proving that the UAE has fewer limitations.
Abu Dhabi’s restoration of relations with Israel is an effort to lessen their own susceptibility to regional threats, such as bombings on their infrastructure, despite their awareness of their limited influence in geopolitics. Even in opposition to Saudi Arabia’s authoritarian tactics, the Emiratis are given direct US support thanks to the Abraham Accords.
UAE and Turkey re-approachment
Over the past couple of years, Ankara and Abu Dhabi’s relationship has grown stronger. The United Arab Emirates (UAE) has become Turkey’s major regional commercial partner owing to the joint efforts of the Turkish president and UAE crown prince.
In addition, Abu Dhabi is planning to leverage Turkey’s substantial influence in Azerbaijan, Central Asia, and Palestine in order to broaden its commercial ties beyond the West Asian region. The United Arab Emirates is aware of the influence that Turkey possesses in Afghanistan, and it is ready to compete against Saudi Arabia in this region as well.
Both the United Arab Emirates and Saudi Arabia, in anticipation of the post-oil age, are striving to increase their geopolitical influence over other regional players while simultaneously trying to envision what life would be like in a world without fossil fuels.