July 28, 2023

IntelBrief: Saudi-UAE Differences Cloud Prospects for Regional Security and Conflict Resolution

Saudi Press Agency via AP

Bottom Line Up Front

  • Recent tensions between the key Gulf allies, Saudi Arabia and the United Arab Emirates (UAE), have complicated their once closely aligned regional security strategy and unnerved officials in Washington.
  • MBS is seeking to use preponderant Saudi influence in the global oil market and the large size of the Saudi economy to fund Riyadh’s ambitious economic diversification program and attract investment to the Kingdom, partly at the expense of the UAE.
  • UAE-Saudi differences have clouded regional and international diplomacy to end the long-running war in Yemen, which has had catastrophic consequences on the Yemeni population.
  • The two Gulf heavyweights continue to share major geopolitical and regional interests, likely limiting the duration and extent of their rift.

A wide variety of press reports and readouts of meetings with Saudi de-facto leader Mohammed bin Salman (MBS) and his erstwhile mentor, UAE President Mohammed bin Zayed Al Nahyan (MBZ), point to strains in a pivotal Gulf relationship that has been closely aligned on virtually every significant regional and global issue. As a more open sign of dissonance, over the past year, both leaders have pointedly declined to attend regional summits and other meetings organized by the other. MBZ did not attend the May Arab League meeting in the Kingdom to allow Syria back into the group, even though the UAE was the vanguard of efforts in the Gulf to rebuild relations with the Assad regime, despite its war crimes and crimes against humanity. The tensions have surprised many experts because of MBZ’s key role in engineering the rise of the much younger MBS to the apex of the Kingdom’s power structure. Jointly, the two engaged in risky and ultimately troubled regional adventures, including sending Saudi, Emirati, and allied Arab forces to fight against the Iran-backed Houthi movement in Yemen, and deciding, in 2017, to isolate and boycott Qatar. The 2017 boycott nearly brought an end to the 42-year-old alliance of six Gulf Arab countries, the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, UAE, Qatar, Bahrain, and Oman) – a grouping that had survived many regional challenges, including the 1980-88 Iran-Iraq war and Iraqi leader Saddam Hussein’s 1990 invasion of Kuwait. According to observers who have met with him recently, MBS accuses MBZ of steering him to undertake ill-fated regional policies, including the Qatar boycott. MBZ might perceive that MBS’ role in the killing of dissident Saudi journalist Jamal Khashoggi in 2018 has, among other actions, disqualified MBS from asserting himself as the paramount Gulf state leader, despite Saudi Arabia’s large area and population relative to those of the other Gulf states.

As MBS’ father, King Salman, withdraws from day-to-day decision-making and the Khashoggi killing seemingly fades into the background, MBS is moving to emerge from MBZ’s shadow and mentorship. Moving to assert his domestic and regional agenda, MBS has cooperated with Russia – in the “OPEC+” forum of OPEC and non-OPEC major oil exporters - to reduce global oil production in an effort to raise global crude oil prices. The cuts, primarily a two million barrel per day production decrease announced in October, blindsided U.S. officials while at the same time representing a roadblock to the UAE’s efforts to raise its production to maximize its revenue stream. The Emiratis have raised their oil production capacity to more than four million barrels a day but are allowed under OPEC policy to pump no more than about three million, forfeiting hundreds of billions of dollars in revenues. UAE leaders acquiesced to the cuts but privately blamed Saudi Arabia for pressuring them to do so. Still, at the OPEC+ meeting in June, the UAE was given a higher oil production target for 2024, whereas several other exporters had their quotas reduced, suggesting that the two powers seek to minimize their differences on the issue. In late July, UAE Energy Minister Suhail al-Mazrouei stated that current actions by OPEC+ to support the oil market are sufficient for now, and the group is "only a phone call away" if any further steps are needed. The UAE's criticism of MBS’ alignment with Russia on oil production might also signal a potential shift by MBZ away from Russian President Vladimir Putin; MBZ has engaged Putin despite the invasion of Ukraine, but the UAE president might be questioning Putin’s political longevity in the wake of the Wagner Group mutiny in late June.

UAE leaders appear concerned that MBS seeks to undermine the Emirates’ position as the key Gulf hub for global business investment and trade. As part of MBS’ plan to diversify and modernize the Saudi economy through his “Vision 2030” program, MBS is reportedly demanding that foreign companies relocate their regional headquarters from Dubai, the UAE commercial center, to Riyadh, the Saudi capital. MBS is also planning to establish technology centers, draw more tourists, and develop logistical hubs – all of which would siphon business away from the UAE. Still, there are no indications that MBS has the political will or the domestic support to lift restrictions such as the public dress code or the prohibition on alcohol – limitations that reduce the Kingdom’s appeal to tourists and expatriate business executives.

Differences have also widened between the two over the end game for resolving the war in Yemen - a war that MBS and MBZ entered in 2015 to counter Iranian influence, and which both thought would be quickly won. Instead, the war slowly developed into a quagmire for both Gulf states, and Yemen has served as a launching point for the Iran-backed Houthis to fire Iranian-supplied ballistic missiles and armed unmanned aerial systems (UAS) on targets in both countries, but particularly Saudi Arabia. Saudi officials have been meeting with Houthi representatives in a concerted diplomatic effort to end the war on terms at least acceptable to Riyadh, although with mixed success. The UAE, which has been largely excluded from the diplomacy, continues to back a Yemeni separatist movement – the Southern Transitional Council (STC) – that is seeking to restore a Yemeni state in the south. MBZ continues to view southern Yemen as a base from which to project power into East Africa, including Sudan, and opposes any settlement that would reduce the UAE's ability to operate from south Yemen. Saudi Arabia supports the Republic of Yemen Government, which Houthi forces ousted from the capital, Sanaa, in 2014. The rival objectives of the Yemen Government and the STC are one factor that has frustrated the Saudi-led peace settlement diplomacy to date.

Arguably, the Saudi-UAE rift could be quickly healed on the weight of their many shared interests and objectives. Both MBS and MBZ have, in recent years, questioned the U.S. commitment to Gulf security and to the containment of Iran. To reduce tensions with the Islamic Republic amid the uncertainty about U.S. policy, both have engaged directly with Tehran. Saudi Arabia restored relations with the Islamic Republic in March in a deal finalized by Beijing. In addition to remaining engaged with Russia’s leadership, both MBS and MBZ perceive the value of expanding relations with China, notwithstanding caution from Washington against doing so. The UAE has normalized relations with Israel, and Saudi officials have held talks with U.S. officials, inconclusive to date, about following suit. Perhaps calming fears among some U.S. officials that a wider MBS – MBZ rift would complicate U.S. efforts to deter and counter Iran, both leaders continue to work closely with the United States to develop integrated air and missile defense (IAMD) for the Gulf and to counter Iran’s threats to Gulf security. And officials of both countries have sought to counter Western assessments that their differences will widen into a more open breach. In separate statements to The Wall Street Journal in July, a UAE official speaking for the government said claims of strained relations were “categorically false and lack foundation,” and a Saudi official called the idea “simply not accurate.”