The golden era of unconditional brotherhood between Saudi Arabia and the United Arab Emirates is officially over. These two Arab giants were once the closest of allies who moved in lockstep on foreign policy and defense. Now they are locked in a high stakes contest for economic dominance and regional power that is reshaping the Middle East.
This shift marks a critical turning point for the Gulf Cooperation Council. What was once a partnership has evolved into a fierce rivalry driven by money, oil, and the desire to lead the Arab world.
The Race for Economic Crown
The primary driver of this growing rift is economics. Crown Prince Mohammed bin Salman (MbS) is aggressively pushing his Vision 2030 plan to transform Saudi Arabia away from oil dependence. To do this, he needs to turn Riyadh into the commercial capital of the Middle East. This directly challenges Dubai and Abu Dhabi which have held that title for decades.
The most aggressive move came when Saudi Arabia issued an ultimatum to foreign companies. Multinational firms were told to move their regional headquarters to Saudi Arabia by 2024 or risk losing lucrative government contracts.
This policy forced businesses to choose between the established luxury of Dubai and the booming potential of Riyadh. The competition has spilled over into other sectors as well:
- Aviation: Saudi Arabia launched Riyadh Air to compete directly with Emirates and Etihad for global transit passengers.
- Tourism: The Kingdom is pouring billions into Red Sea resorts and entertainment hubs to rival the UAE’s tourism sector.
- Logistics: Both nations are racing to become the primary shipping and logistics hub connecting Asia, Europe, and Africa.
The UAE is not sitting idle while this happens. They have responded by doubling down on their strengths. The Emirates recently updated visa rules and business regulations to remain attractive to expats and investors who might be tempted by Saudi offers.
Oil Disputes and Geopolitical Splits
Energy policy remains a significant point of friction between the two neighbors. While both rely on oil revenue, their strategies for the future differ sharply.
Saudi Arabia often pushes for production cuts within OPEC+ to keep global oil prices high. They need these high revenues to fund massive giga-projects like NEOM. The UAE often prefers to pump more oil now to monetize its reserves before the world transitions to green energy.
These disagreements have led to heated moments inside OPEC meetings where the UAE has pushed back against Saudi leadership.
Beyond oil, their foreign policy paths have diverged significantly.
Key Areas of Disagreement:
- Israel: The UAE normalized relations with Israel through the Abraham Accords in 2020. Saudi Arabia has held back and demanded a path to Palestinian statehood before taking that step.
- Iran: The UAE has sought to de-escalate tensions with Tehran through trade and diplomacy sooner than Riyadh.
- Global Alliances: While both maintain strong ties with the US, the UAE has been more aggressive in building independent technological and military ties with China.
Proxy Struggles in Yemen and Sudan
The rivalry is most dangerous where it touches on military and security interests. In Yemen, what began as a joint military intervention has fractured into competing agendas.
Saudi Arabia supports the recognized government and wants to secure its southern border against Houthi rebels. The UAE has backed the Southern Transitional Council (STC). The STC is a separatist group that effectively controls the port of Aden and seeks independence for southern Yemen.
This split has created a situation where Saudi-backed forces and UAE-backed forces actively compete for control of strategic ports and territory.
A similar pattern is visible in Sudan. Reports indicate the two Gulf powers have supported opposing sides in the civil war between the Sudanese army and the Rapid Support Forces (RSF).
The UAE views the RSF as a bulwark against Islamists. Saudi Arabia has focused on mediating talks and supporting the stability of the traditional state apparatus. These proxy conflicts highlight a deeper strategic disconnect. Saudi Arabia views itself as the stabilizing leader of the Islamic world. The UAE acts as a nimble, assertive power protecting its own specific interests across the Horn of Africa and the Red Sea.
A Clash of Personal Ambitions
At the heart of this cold war is the changing dynamic between the two leaders. For years, UAE President Sheikh Mohammed bin Zayed (MbZ) acted as a mentor to the younger Saudi Crown Prince.
That dynamic has shifted completely. MbS is no longer the protégé; he is the confident leader of the region’s largest economy and expects deference.
Analysts note that the two leaders rarely attend each other’s major summits anymore. The frequency of their joint appearances has dropped sharply compared to five years ago. This personal distance reflects the national distance.
Saudi Arabia feels its size and religious status make it the natural hegemon of the Gulf. The UAE believes its economic success and military efficiency give it the right to act independently. Neither side is willing to back down.
This does not mean a total rupture is coming. The countries are too interconnected to sever ties completely. Instead, they are settling into a “cold peace” defined by intense competition. They will work together when it suits them and compete ruthlessly when it does not.
The days of the Saudi-UAE axis moving as one single force are gone.
Readers witnessing this historic shift should understand that this rivalry will define the future economy of the Middle East. As Riyadh rises, it inevitably creates friction with Abu Dhabi. The result will be a more competitive, fractured, and dynamic Gulf region.
What do you think about this growing rivalry? Do you believe Riyadh will overtake Dubai as the business hub of the Middle East? Let us know your thoughts in the comments below. If you are following the economic updates on social media, use the hashtag #GulfPowerShift to join the conversation.
