Seyed Mohammad Hosseini – Former Ambassador of Iran to Saudi Arabia
Saudi military fighter jets, by attacking two vessels carrying military equipment that had been sent by the United Arab Emirates to Abu Dhabi–backed militias in southern Yemen (the Transitional Council), pushed the Saudi–Emirati rivalry in Yemen into a new phase.
Saudi Arabia’s Ministry of Foreign Affairs, aligned with the ruling authority in Sana’a, also described the UAE’s military presence in southern Yemen as dangerous and announced: “Any threat against Saudi Arabia’s national security is a red line, and we will not hesitate to take the necessary measures to confront it.”
On this basis, it is necessary to present an analysis of the hidden and overt rivalry between the United Arab Emirates and Saudi Arabia in economic and political domains.
Transformation of Economic Relations and Regional Competition
Relations between the Kingdom of Saudi Arabia and the United Arab Emirates are transitioning from a model of “cooperation–hidden competition” toward a model of “competition–cooperation”; a competition that at times takes on a concealed form and at other times an overt one. The history of relations among the Persian Gulf monarchies has rarely contained a narrative of “unity and solidarity.”
Behind the façade of joint statements, there has almost always been a subtle competition over interests; a context in which pragmatic alignments have consistently been accompanied by quiet and hidden rivalry, active and dormant border disputes, competition for leadership of the Arab world, and continuous efforts to expand influence through security, economics, and relations with emerging and traditional powers.
With the onset of the twenty-first century, Saudi–Emirati competition across various issues has become less overt, yet in practice broader and more systematic. This rivalry manifests itself in development models and efforts to become the region’s primary hub (investment, logistics, financial flows, and regional headquarters of international companies).
Whereas in the past competition among Persian Gulf monarchies was largely concealed behind diplomatic protocol, it is now increasingly expressed through economics, investment, and corporate decisions. In fact, this rivalry has become evident under Crown Prince Mohammed bin Salman, the Crown Prince and de facto ruler of Saudi Arabia, through the transformational strategy of “Vision 2030.”
The core strand of this competition is the struggle to become the region’s premier commercial hub. For more than three decades, the United Arab Emirates (particularly Dubai and Abu Dhabi) has systematically attracted the central representation of prominent international companies, financial flows, and service infrastructures required for global trade.
In parallel, Riyadh is reshaping its governance model and altering its domestic and foreign policy approaches through selective inspiration from international political economy. Deregulation aimed at ensuring equal treatment of domestic and foreign investors is underway. Special economic zones (with tax and regulatory incentives) to attract production and logistics projects, modeled on the “foreign direct investment (FDI) attraction” framework, are being promoted in Saudi Arabia.
Another arena of competition between the two countries lies in land, maritime, and air corridors. In the maritime domain, Saudi Arabia is focused on sharply increasing port capacities and logistics belts to reduce dependence on the Persian Gulf and the Strait of Hormuz. Saudi Arabia’s corridor regulations are designed so that shipments do not merely transit, but instead generate added value within the country.
An even more sensitive front is air transit. Saudi Arabia has set its objective of becoming one of the world’s top 10 aviation countries. Saudi Arabia’s aviation strategy aims to increase annual passenger traffic to 330 million by 2030 and expand cargo capacity to 4.5 million tons, supported by a network of 250 destinations.
This poses a direct challenge to the UAE’s aviation industry, which has decades of experience and a long track record. The realization of Saudi Arabia’s aviation vision would not only reduce the number of passengers on UAE flights. Still, it would also diminish the volume of aviation-related services in that country, ranging from ground transportation and maintenance to hotels and business travel.
Political Competition and Regional Mediation
Saudi–Emirati competition in the political arena is at times subterranean and hidden, and at times overt and explicit. Both Abu Dhabi and Riyadh seek to become the principal political “center of gravity” for managing negotiations, ceasefires, and the region’s security order.
The clearest example is the civil war in Sudan. The Sudan conflict has become an arena for the competing approaches of Saudi Arabia and the United Arab Emirates. Saudi Arabia is banking on mediation and de-escalation in Sudan, as it requires a Red Sea belt along its maritime border with Sudan for its development strategy. The United Arab Emirates, despite officially denying these claims, is increasingly recognized as an actor operating through networks of influence and field partners in favor of one side of the Sudanese civil war.
Yemen, as has recently become evident, is another example of this hidden rivalry; a rivalry that has produced a rift within the joint coalition. Over time, the United Arab Emirates effectively diverged from Saudi Arabia’s line, established its sphere of influence in southern Yemen, and supported militias known as the “Transitional Council,” which—should the Houthis fall—lack international legitimacy to govern Yemen and pursue a path toward Yemen’s fragmentation. In contrast, Saudi Arabia seeks to preserve at least a minimum of formal unity within the anti-Houthi camp. Similar political rivalries between the two countries are also present in Libya and Egypt.
Another manifestation of political rivalry relates to both countries’ efforts to “acquire the status of peace mediator” in regional and international crises. For example, the United Arab Emirates has strengthened its mediating position through regular prisoner exchanges between Russia and Ukraine. Additionally, following the normalization of relations with the Israeli regime, the United Arab Emirates has gained additional political leverage and new channels of influence in Washington and the West Asia region.
Accordingly, economic competition between Abu Dhabi and Riyadh has long ceased to be merely “healthy competition for investment”. It has increasingly turned into a struggle over the region’s commercial center of gravity. Through Vision 2030 and its traditional regional influence, Saudi Arabia seeks to transfer the managerial core of regional trade to Riyadh, while the United Arab Emirates strives to preserve its role as the region’s traditional trade hub. In foreign policy, the same logic appears in competition over mediation and influence in conflict zones from Sudan to Yemen.
The paradox is that, despite the vast resources on both sides, this competition could ultimately prove detrimental to both sides. If Saudi–Emirati rivalry turns into a zero-sum game in the future, it will not only fail to produce commercial and political leadership in Abu Dhabi or Riyadh, but also increase the costs of regional instability for all.
More dangerously, political disagreements can undermine economic objectives. When regional crises become arenas of competition, countries are drawn into contradictory alliances, the credibility of mediators erodes, and trust among states dissipates. Ultimately, in the long term, this rivalry could weaken the future agendas of the Persian Gulf Cooperation Council. For this reason, the central question is whether Abu Dhabi and Riyadh can reach an understanding on the boundaries of competition and the areas of compromise.
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