Follow us on social

Mbs-mbz-scaled

How the growing UAE-Saudi rivalry could pay off for the United States

Their fierce competition for economic power in the region might actually smooth America's exit from the stage.

Analysis | Middle East

Multiple cracks have recently opened in the Saudi-Emirati relationship. The UAE is resisting efforts by Saudi Arabia and Russia to convince OPEC+ members to continue to restrict oil production. Meanwhile, Saudi Arabia will no longer consider goods produced in free zones to be “locally made,” a decision that will subject many Emirati products to tariffs. 

And that’s not all: Saudi Arabia suspended flights to the UAE, citing concerns about the Delta variant of COVID-19, an act reciprocated by the Emirates. In April, Saudi Arabia announced that by 2024, it will cease doing business with any company that does not base its regional headquarters in the kingdom, a policy that will likely force many multinational corporations to relocate from the UAE to Saudi Arabia. Saudi Arabia recently revealed a $133 billion investment to become a regional transportation and logistics hub, a bid to replace Dubai and Abu Dhabi (as well as Doha). The Saudis intend to launch a new airline that will jockey with other Gulf carriers like Etihad, Emirates, and Qatar Airways for international customers.

Taken together, these moves indicate heightened tensions between the two countries, and in particular between their powerful crown princes, MBS of Saudi Arabia and MBZ of Abu Dhabi. Under the previous U.S. administration, the princes had partnered closely with each other and with Trump’s team on issues from the 2017 blockade of Qatar, to the 2020 Abraham Accords. MBZ was described as a mentor for MBS, despite the contrast between the Emirati royal’s clever cultivation of the UAE’s image and the Saudi’s rash and often horrific policy decisions that undermined his desire to rebrand his kingdom. Yet despite their earlier closeness, the rivalry between the two countries is unsurprising: MBS sees Saudi Arabia as the region’s rightful dominant power, and is moving to seize the position of economic, transit, and tourist hub hitherto held by the UAE.

Under the Trump administration, the Saudis and Emiratis coordinated to compel greater U.S. involvement in the region, a reaction to Obama’s effort to negotiate a nuclear treaty with Iran and pivot to Asia. Trump and his team complied, abandoning Obama’s nuclear deal and adopting a stance of maximum pressure that brought the U.S. to the brink of war with Iran. The Biden administration looks to re-enter the nuclear deal, and appears committed to finally shifting U.S. focus away from the Middle East and Afghanistan

The Saudi-Emirati race for economic rewards could bode well for Biden’s goal of reducing U.S. involvement in the region. If Saudi Arabia and the UAE are primarily focused on competing with each other, they will both prefer to foster regional stability in order to encourage investment, potentially curbing impulses to behave aggressively towards each other or their neighbors. 

Saudi Arabia in particular needs to funnel capital towards MBS’ ambitious Vision 2030, through which he promised to diversify the economy, generate greater employment opportunities, and provide general prosperity for Saudis. Yet at present, Saudi Arabia remains bogged down in Yemen, a conflict that threatens to demand even greater resources as the Saudis’ inability to neutralize the Houthis becomes increasingly apparent. Hopefully MBS has learned that wars are frequently more costly and longer lasting than anticipated, and so may exhibit greater restraint in the future. Meanwhile, MBZ is too cunning to try to win a tug-of-war with Saudi Arabia’s larger economy — $700 billion as opposed to $421 billion GDP — so he will need to look for alternative sources of revenue. 

Yet in general, MBS faces the more difficult task: according to the World Bank’s “Ease of Doing Business” survey of regulations in 190 countries, the UAE ranks 16th, while Saudi Arabia ranks 62nd. The Saudi economy must be fully transformed to attract the level of investment necessary to employ its young and growing population. At over 20 million, Saudi citizens significantly outnumber the UAE’s approximately 1 million citizens, (both countries have large populations of expat workers, making the total number of residents higher than that of nationals). GDP per capita in Saudi Arabia is approximately $20K, compared to $43K in the Emirates. With a larger population and less capital per capita, MBS cannot afford to buy his citizens’ quiescence. As the Abraham Accords demonstrated, fears of public opposition do not constrain MBZ, whereas Saudi Arabia ultimately decided not to risk the backlash that would follow normalization with Israel.

The UAE may have felt disappointed by the Saudis’ reluctance to follow their lead on the Abraham Accords, especially since Jared Kushner apparently believed he could deliver the Saudis. MBS owed his close relationship to the Trump team, specifically Jared Kushner, to MBZ’s introduction. Yet ultimately, with a new president in the White House, MBZ may find it more useful to be the sole Gulf power to have normalized with Israel, given the subsequent boost in the eyes of the U.S., as well as subsequent access to advanced surveillance and military technologies. 

In the short term, the rivalry between the UAE and Saudi Arabia could help keep both MBZ and MBS focused on economic concerns. Yet MBS has staked his legitimacy on keeping his promises to the young generation of Saudis educated abroad, a transition that will require him to prioritize economic diversification away from oil. For MBS, therefore, competition with the UAE is likely to appear increasingly important, as Saudi Arabia seeks to replace the UAE’s role as the region’s capital of cosmopolitanism, opportunity, and glamor. In the medium term, if MBS fails to deliver, Saudi Arabia could grow increasingly unstable.

And in the short, medium, and long term, global interests are ill-served by both the UAE and Saudi Arabia continuing to tie their fortunes to the burning of fossil fuels, though to some extent it would seem that Abu Dhabi is acknowledging the changing realities. Despite both countries’ on-going and egregious human rights abuses, the Biden administration should encourage each countries’ efforts to transition away from oil.


UAE President Sheikh Mohammed bin Zayed al-Nahyan receives Saudi Crown Prince Mohammed bin Salman at the Presidential Airport in Abu Dhabi, United Arab Emirates November 27, 2019. WAM/Handout via REUTERS
Analysis | Middle East
Kim Jong Un
Top photo credit: North Korean leader Kim Jong Un visits the construction site of the Ragwon County Offshore Farm, North Korea July 13, 2025. KCNA via REUTERS

Kim Jong Un is nuking up and playing hard to get

Asia-Pacific

President Donald Trump’s second term has so far been a series of “shock and awe” campaigns both at home and abroad. But so far has left North Korea untouched even as it arms for the future.

The president dramatically broke with precedent during his first term, holding two summits as well as a brief meeting at the Demilitarized Zone with the North’s Supreme Leader Kim Jong-un. Unfortunately, engagement crashed and burned in Hanoi. The DPRK then pulled back, essentially severing contact with both the U.S. and South Korea.

keep readingShow less
Why new CENTCOM chief Brad Cooper is as wrong as the old one
Top photo credit: U.S. Navy Vice Admiral Brad Cooper speaks to guests at the IISS Manama Dialogue in Manama, Bahrain, November 17, 2023. REUTERS/Hamad I Mohammed

Why new CENTCOM chief Brad Cooper is as wrong as the old one

Middle East

If accounts of President Donald Trump’s decision to strike Iranian nuclear facilities this past month are to be believed, the president’s initial impulse to stay out of the Israel-Iran conflict failed to survive the prodding of hawkish advisers, chiefly U.S. Central Command (CENTCOM) chief Michael Kurilla.

With Kurilla, an Iran hawk and staunch ally of both the Israeli government and erstwhile national security adviser Mike Waltz, set to leave office this summer, advocates of a more restrained foreign policy may understandably feel like they are out of the woods.

keep readingShow less
Putin Trump
Top photo credit: Vladimir Putin (Office of the President of the Russian Federation) and Donald Trump (US Southern Command photo)

How Trump's 50-day deadline threat against Putin will backfire

Europe

In the first six months of his second term, President Donald Trump has demonstrated his love for three things: deals, tariffs, and ultimatums.

He got to combine these passions during his Oval Office meeting with NATO Secretary General Mark Rutte on Monday. Only moments after the two leaders announced a new plan to get military aid to Ukraine, Trump issued an ominous 50-day deadline for Russian President Vladimir Putin to agree to a ceasefire. “We're going to be doing secondary tariffs if we don't have a deal within 50 days,” Trump told the assembled reporters.

keep readingShow less

LATEST

QIOSK

Newsletter

Subscribe now to our weekly round-up and don't miss a beat with your favorite RS contributors and reporters, as well as staff analysis, opinion, and news promoting a positive, non-partisan vision of U.S. foreign policy.