Shifting Sands: Developments in the Saudi-Emirati Relationship
Opinion Analysis by Naif Al Rogi, Featured Writer
July 26th, 2021
Much ink has been spilt over the past few weeks on the current state, and indeed the very future, of the Saudi-Emirati alliance, arguably the most consequential political relationship in the Middle East today. According to one point of view, the Kingdom and the Emirates' interests have diverged so drastically that it warrants historical comparison to the Sino-Soviet split. This interpretation is a greatly exaggerated, melodramatic one. Another camp claims the opposite, that nothing has changed, and that Riyadh and Abu Dhabi remain totally aligned on all issues. That line is harder to sell in light of the very real differences played out in the open this month during OPEC+ deliberations over oil production quotas, not to mention the broader economic rivalry developing between the two countries.
Talk of a suddenly turned acrimonious relationship by certain so-called ‘informed sources’ was dispelled this week by an OPEC+ compromise, and by the visit of the UAE’s de facto ruler Abu Dhabi Crown Prince Mohammed bin Zayed to Riyadh the next day, on the eve of Eid-ul-Adha. bin Zayed’s public (socially distanced) embrace of Saudi Arabia’s Crown Prince Mohammed bin Salman only further underscored the effusively cordial language of oil ministers from both countries the day before. "What bonds us together is way beyond what you imagine… you assume that we lack our advantage of being mysterious and clever," Saudi oil minister Prince Abdelaziz bin Salman said about his Emirati peers at a virtual press conference after reaching an OPEC+ commitment to gradually increase production levels. “Am I right, Suhail?”, the prince asked the UAE’s oil minster Suhail Al-Mazrouei—his reply: “100% your highness.” Anwar Gargash, the UAE’s long-serving Minister of State for Foreign Affairs, similarly expressed a seeming deference to Saudi Arabia as being a sort of big brother and guiding hand.
Such exhibitions are, of course, partly damage control; many observers and commentators, not least those with some association or other with Qatar, gleefully carried obituaries of the Saudi-Emirati alliance. Riyadh has taken the lead in the Gulf rapprochement, while Abu Dhabi has been noticeably less enthusiastic about warming up to Doha. So we are introduced to the first wrinkle. Economic considerations have been marked out as turning the neighboring partners into competitors. Saudi Arabia, which is embarking on a rapid and overdue modernization drive, is making concerted efforts to pry away multinational companies and foreign investment from the UAE, which has for decades enjoyed its position of entrepôt to a closed-off Kingdom. Earlier this year, the Saudi government announced that from 2024 onwards no contracts would be given out to multinationals with regional HQs outside the country—a blow to Dubai, particularly, where many companies based there rely heavily on Saudi business. Saudi Crown Prince Mohammed bin Salman, along with other officials, have frequently lamented the sight of Western consultants commuting by airplane to work in the Kingdom from homes in Dubai. As part of his program to make the country more livable, the Crown Prince no doubt expects foreigners to stay—and crucially spend—in Saudi Arabia. The salvo continued with the more recent announcement of a new airline based out of Riyadh, positioned to compete with Abu Dhabi’s Etihad and Dubai’s Emirates (as well as Qatar Airways) in the long haul, high end flight space. Far from abating, and a departure from the current era of good feelings in Gulf affairs, Saudi Arabia has unilaterally amended import rules from other Gulf Cooperation Council members, shoving free zones out of the customs union, mandating a minimum number of employed nationals, and reaffirming a longstanding boycott of Israeli goods, whether produced in whole or in part.
One is left with the impression that the Kingdom is playing a game of catch-up, and its energy policy can be appreciated in this context. Saudi Arabia would like to see oil prices and supply remain stable for years to come, ensuring it a steady and reliable stream of income as it invests in other areas. The UAE, by contrast, has calculated that its oil reserves are better exploited today rather than in an uncertain tomorrow, when demand for it might not exist. With this in mind, Abu Dhabi has invested heavily in increasing its production capacity, which stands at roughly 4.2 million barrels per day (b/d) today from 3.1 million b/d in 2018, and with an aim of reaching 5 million b/d by 2030. The recent compromise reached by OPEC+ served Saudi interests by extending the production limits through to the end of 2022, while conceding to the UAE by allowing it a substantial increase in its quota, though not until the middle of 2022. Beyond oil, the two countries share a general view of the international scene; an aversion to political Islam and its standard-bearers like Erdogan’s Turkey, an anxiety around Iranian expansionism and its nuclear program, and an increasing feeling that the United States cannot be depended on for their defense. These fundamentals brought the Riyadh and Abu Dhabi closer than ever before in their histories post-2015, with the ascendance in Saudi Arabia of Mohammed bin Salman, whose personal relationship with Emirati leaders, namely Mohammed bin Zayed, underpinned the new alliance—‘Together Forever’ as the UAE proclaimed, celebrating its neighbor’s 90th National Day. It has been a remarkable journey reaching this point. Many of the opinion pieces we have been subjected to lately have repeatedly singled out (as though copying notes) disputes over the Saudi-Emirati border and the Shaybah oil field that were previous sources of tension. Notable, I think, is the fact that none of the pundits cared to mention that Saudi Arabia did not even recognize the nascent United Arab Emirates until 1974, three years after its founding following the British retreat from East of Suez. I would have thought such a fact would have fit in snuggly with the ready narratives being propagated, but it seems to have slipped through the talking points.
At any rate, though the Kingdom and the Emirates will compete (and cooperate) with each other economically, the political alliance has its foundations grounded more firmly in the ground, impervious to the shifting sands.