In the usually sun-baked corridors of Gulf diplomacy, where smooth surfaces and quiet agreements have long defined the private dealings of oil titans, a crack has begun to show — and it is attracting attention well beyond Riyadh and Abu Dhabi. What for years passed as minor diplomatic differences between Saudi Arabia and the United Arab Emirates has emerged in recent months as a visible rupture between two of the Middle East’s most powerful states, with implications that may reverberate across the region and the global economy.
At its heart, the Saudi-UAE feud is a story of strategic divergence — once close partners in regional security, their joint purpose has splintered under the pressures of competing foreign policies, economic ambitions, and differing visions of regional order. Saudi Arabia, led by Crown Prince Mohammed bin Salman, has increasingly focused on stability, state structures, and territorial integrity in its neighbourhood, even as it pursues economic transformation at home. The UAE, under President Mohamed bin Zayed, has tended toward more agile external engagement, including partnerships with Israel, economic influence in East Africa, and backing for autonomous actors in conflicts like Yemen.
The most visible manifestation of this tension can be found in Yemen, where both states were long part of a Sunni coalition against the Houthi movement. But their interests have diverged sharply: Saudi Arabia has sought to support Yemen’s internationally recognised government and secure its borders, while the UAE’s backing of the Southern Transitional Council — a separatist faction — has increasingly put it at odds with Riyadh’s objectives. The dispute erupted into open confrontation last year, including Saudi airstrikes on facilities alleged to be tied to UAE weapons deliveries and the eventual withdrawal of UAE forces — moves that have reshaped the alliance in ways that extend far beyond Yemen’s borders.
Economically, the feud is beginning to strain business ties and regional cooperation. Some UAE companies withdrew from a major defence exhibition in Riyadh this week, in a symbolic sign of deeper mistrust. Visa obstacles and bureaucratic complications have emerged between the two markets, even as tens of billions in trade bind them together. Business leaders worry that if tensions escalate further, the intertwined economic ecosystem that has long supported Gulf growth could fray, creating ripples in investment flows, energy partnerships, and regional financial networks.
The geopolitical risks are equally significant. A coherent Gulf position — once a cornerstone for external partners like Europe and the United States — now appears fractured. Initiatives meant to counter shared threats or stabilise hotspots from the Red Sea to the Horn of Africa face disruption by a rivalry with no clear mechanism for de-escalation. Some analysts warn that without a unified front, opportunities emerge for adversaries, including Iran, to exploit divisions among Gulf states.
The competition between Saudi Arabia and the UAE also reflects a broader transformation in Middle Eastern politics: a shift from tightly aligned blocs toward networks of influence shaped by economic agendas, external partnerships (including with Western and Asian powers), and divergent domestic priorities. What once seemed a strategic alliance is now a dynamic of parallel pursuits, each seeking leadership in a region undergoing rapid change.
As this feud plays out, the immediate concern — whether in Yemen’s fractured provinces or the boardrooms of Gulf-linked enterprises — is how far it will spread. For states that once presented a united exterior to the world, the risks lie not only in conflict and mistrust but in the erosion of confidence among allies and investors alike. For Gulf citizens and their global partners, these developments will continue to shape futures in a region where once-stable alignments now show their fault lines.
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Sources (Media Names Only) Foreign Affairs Reuters Financial Times The Guardian Middle East Forum