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This article was first published by Stratfor Worldview and is reprinted here with permission.

The once-close Saudi-Emirati relationship is weakening — or, put in another way, normalizing — as overlapping economic competition and strategic differences on issues like Yemen and the Muslim Brotherhood finally pop up into the public spheres. It is not a shift towards a virulent rivalry like others in the region, but rather a turn away from a period of unprecedented closeness that emerged after the Arab Spring in 2011. And like the external factors that brought Saudi Arabia and the United Arab Emirates close for nearly a decade, changes in regional and global geopolitics are now again forging new wedges between them by periodically putting their interests at direct odds.

From Rivals to Fraternal Nations

In the mid-20th century, Saudi Arabia and the tribes that would become the United Arab Emirates watched one another warily. War was averted thanks to British intervention, but the Saudis kept pressing on the Emirati border until the 1974 Treaty of Jeddah ceded Emirati territory to Riyadh — including the United Arab Emirates’ only land border with Qatar. After the United Arab Emirates gained independence in 1971, the Saudis and Emiratis became less adversarial as they bonded over mutual desires for a stable oil market, concern about Iraqi and Iranian expansionism, fear of jihadist terrorism, and a need to keep the United States engaged in the region’s security. Personalities mattered too: the close bonds between Emirati and Saudi rulers helped cement ties. 

This cooperative relationship went into overdrive in the 2010s. The Arab Spring in 2011 shocked the region’s political establishments, especially the Arab Gulf states whose royals had survived decades of existential threats from communism, nationalism and militant Islamism. Riyadh and Abu Dhabi collaborated closely to boost fellow monarchies in Jordan and Bahrain with economic aid and, in Bahrain’s case, troops. Fear of revolution, and those who fanned its flames, led to the blockade of Qatar in 2017. A key Emirati-Saudi demand to end the blockade was for Doha to abandon support for the Muslim Brotherhood, the international movement that had briefly most benefited from the Arab Spring. As the effects of the Arab Spring were still being felt, the United States and Iran signed the Iran nuclear deal in 2015, a deal that the Saudis and Emiratis saw as a green light for Iranian expansionism throughout the region. Meanwhile, in the royal palaces, new leadership came into place. In Abu Dhabi, Crown Prince Sheikh Mohammed bin Zayed secured de facto control of his country and changed its foreign policy toward a more confrontational, adventurous path. Meanwhile, in Saudi Arabia, the rapid rise of Crown Prince Mohammed bin Salman in 2016 brought policies that echoed bin Zayed’s own security mindset. Together they began the military intervention in Yemen, a campaign designed to roll back the Houthis and, by extension, the threat of Iranian influence on Saudi Arabia’s southern border. 

A Difference of Opinion

But now it’s becoming clear that such closeness between Saudi Arabia and the United Arab Emirates could only last as long as the region’s geopolitics incentivized it. The Arab Spring, for example, has largely passed. While its effects are still being felt in Syria and Libya, where civil war and political paralysis continues, counter-revolutionary forces have either reasserted control or prevailed in critical countries like Egypt, Jordan, and Bahrain. In Saudi Arabia and the United Arab Emirates, revolutionary sentiment has been muted. After large protests by Shia Saudis faded from view and the United Arab Emirates completed its own purge of the Emirati Muslim Brotherhood, dissent in both countries now appears on the margins of the internet and in hushed conversations rather than in street protests or government buildings. 

This ebbing in anti-state challenges has created a split of opinions on how to deal with groups like the Muslim Brotherhood and, by extension, Qatar. In January 2021, Saudi Arabia was the first to announce the end of the blockade on Qatar, which it began to see as an unnecessary risk — especially once former U.S. President Donald Trump, who had shielded Riyadh from criticism over the move, lost re-election. The United Arab Emirates, which even as late as November 2020 was signaling it was still in the blockade for the long haul, grudgingly went along with the shift. But while Doha now has a Saudi ambassador, the Emiratis notably have yet to restore a full-time ambassador (even as the United Arab Emirates has rapidly established diplomatic representation with Israel). 

In Yemen, geographic and strategic realities have also begun to set in. Initially, Emiratis and Saudis were equally committed to rolling back Yemeni Houthi rebels. But as the war dragged on, it became clear the Yemeni conflict was more of a Saudi problem than an Emirati one. The United Arab Emirates was not willing to expend the troops and treasure on a military campaign to fully defeat the Houthis, but it didn’t have to either. Buffered by geography that kept Houthi threats of attack mere threats, the Emiratis could focus on a limited campaign instead. And in June 2019, that’s what they shifted to — alarming their Saudi allies who saw their coalition falling away. The bad blood caused by that move continues to linger as Saudi political commentators, almost certainly with state approval, now criticize the United Arab Emirates’ Yemeni strategy. 

Enter the Post-Oil World

Meanwhile, internationally, the impetus for a global green energy revolution has gained steam, threatening to destroy the oil-dependent economies of both the United Arab Emirates and Saudi Arabia. But while there is a fair bit of economic divergence between the two Arab Gulf countries, there too is also enough overlap to produce economic friction. In tourism, Saudi Arabia hopes to copy Dubai’s high-end luxury lure while also aping its penchant for chasing Guinness World Records (Saudi Arabia is, for example, still technically building the Jeddah Tower, which, if ever completed, would be the world’s tallest — stealing the mantle from Dubai’s Burj Khalifa skyscraper). But with similar climates and attractions, Saudi Arabia finds itself in the same market as Dubai rather than discovering a new well-spring of tourists. Saudi Arabia is also pursuing new transport and infrastructure projects that have put it on an implicit path of competition with the United Arab Emirates — from its new national airline that will invariably end up trying to muscle out Dubai’s Emirates Airline market share, to its growing ports along the Red Sea and the Persian Gulf that Saudi hopes can unseat Jebel Ali as the logistical linchpin between Asia and Europe. 

Saudi Arabia has already signaled it will play hardball to win these contests. In February 2021, it announced it would sever state contracts with businesses that didn’t have their regional headquarters in the kingdom — a clear shot at Dubai, the preferential place for most businesses to set up shop. Then, in July 2021, Riyadh also imposed tariffs on goods produced in free zones or with Israeli involvement — policy decisions that directly affect the free zone-heavy, Israel-friendly United Arab Emirates. The Emiratis, meanwhile, have also proven willing to counter with their own policies: They’ve already offered citizenship to highly qualified foreigners and investors, dropping any cultural or religious requirements from nationalization, in a bid to lure the best and brightest to their shores permanently. And at OPEC, the Emiratis were more willing to publicly break with the Saudis to gain the production level they wanted — a move that could presage more maverick negotiating in the future.

More Splits Ahead

And there are yet more differences ahead. One of them is on Israel, which the United Arab Emirates normalized ties with and which the Saudis have not. Though Saudi Arabia has notable pro-Israel factions trying to change public sentiment in favor of normalization, Riyadh under King Salman remains committed to the traditional Arab Peace Initiative and is thus unlikely to overtly cooperate with Israel. The new tariffs that targeted Israeli-supplied goods or services may only be the beginning of a more overt attempt by Riyadh to limit the United Arab Emirates’ gains from normalization with Israel

In Yemen, relations between the United Arab Emirates and Saudi Arabia could readily turn for the worse — especially as the former’s client, the Southern Transitional Council, continues to seek eventual secession from Yemen, which the latter wants to keep unified. In previous phases of STC-Yemeni government violence, the Emiratis have played the role of mediator to roll back tensions. But new rounds of fighting could see Saudi newspapers and even official diplomats become more openly critical of the United Arab Emirates’ backing of the STC, something that would further strain diplomatic ties.

Finally, in the realm of economic competition, both sides look likely to gird themselves for a long-term contest. The United Arab Emirates and Saudi Arabia will probably both shift policies and create incentives to win over businesses and tourists, while trying to take advantage of one another’s comparative disadvantages. But they are also likely to gamble on big-spending projects meant to undercut one another’s economies — even if it’s not necessarily clear it’s economical to build such projects. Neom in northwest Saudi Arabia is already a long-shot project. But if the futuristic megacity is ever completed, it could be a major attraction that lures businesses and workers away from the glitzy malls of Dubai. That prospect alone could keep a project like Neom alive longer than if it were exposed to the full force of the free market. Though the ties that bind will continue to do so in major strategic matters, in the coming decade Riyadh and Abu Dhabi will chart different, sometimes competing, courses.