Oil prices have spiked to a 6 year high, as OPEC+ cancels meeting over Saudi-UAE dispute, possibly leading to further tensions between the two Persian Gulf allied regimes, but why now are the two at loggerheads?
An OPEC plan, set forward to extend the deadline of an oil output cut to the end of 2022, has been slammed as “unfair to UAE” by Abu Dhabi, leading to a very public dispute with their traditional Gulf ally Saudi Arabia. An OPEC meeting last Friday, designed to negotiate a solution, ended with no progress made and now the UAE has even boycotted a meeting altogether in a perceived attempt to force through its demands.
Under a proposed OPEC+ plan, in dispute, the Kingdom of Saudi Arabia (KSA) would have to cut its oil production by 5% and the UAE by 18%. The UAE has declared that the market is in need of higher oil production due to the decline in prices, which comes as a result of the decline in energy usage and international travel.
Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, proclaimed that “Big efforts were made over the past 14 months that provided fantastic results and it would be a shame not to maintain those achievements … Some compromise and some rationality is what will save us,” in a subtle jab at the Emiratis.
Saudi Arabia Attempts To Combat UAE Dominance
During the Trump era, a great deal of favoritism was handed to the KSA, in fact, this may have come at the expense of undermining some of America’s biggest allies in the region, such as Jordan and Egypt. But as Saudi Arabia failed to join the ‘Abraham Accords’ and normalise ties with Israel, the Saudis realized a strategic problem emerging for them in the region.
The UAE has waged a regional proxy war on the Muslim Brotherhood group, collaborating with the Israelis, US, Saudis, Egyptians, LNA (in Libya) and many more to fight them on multiple fronts. This effort has ended up leading the Crown Prince, Mohammed Bin Zayed al-Nahyan, to great power, not just locally but regionally.
Through intelligence strongman Mohammed Dahlan – the right hand man of Abu Dhabi’s Crown Prince – the UAE’s intelligence agency’s reach has been a spectacular development for them. This, in addition to a number of other moves in the region, has helped spread its influence. As part of the UAE’s war on the Pan-Islamic Muslim Brotherhood organization, it has helped in the fight against the MB’s affiliates in Syria, the ousting of Sudan’s former Brotherhood aligned leader, operating behind the scenes with Egyptian coup leader Abdel-Fattah al-Sisi, and even seeking to obliterate the al-Islah Party in Yemen with the help of Israel and the US.
On top of working to overthrow governments and crush MB-aligned groups, the UAE worked to tighten its contacts in Washington DC and focused in on large-scale lobbying campaigns, in addition to expanding their usefulness in the eyes of US officials. The overthrow of former Sudanese President, Omar Bashir, is one example of how Abu Dhabi came through for the US. When the Sudanese people forced Bashir from power, a joint military-civilian interim government was formed, with the UAE working as the chief backers of the military side of the newly formed regime. When the US sought to pick up new members for its Israeli normalisation program, the UAE stepped in to do most of the dirty work for them to make that possible and Sudan – with the civilian element of the government in opposition to the move – normalized ties with Israel. When it came to Sudan having to pay for the American victims of terrorism, although Saudi Arabia had footed the bill for Sudan which was required for sanctions relief from the US, this was even done by the KSA at the request of the UAE.
With Saudi Arabia having operated as the historic Arab powerhouse of the Gulf, seeing such a rise to prominence from the UAE seems to have sparked competition. In Yemen, the Saudi-led coalition which entered the country in 2015 included the UAE, yet now the Emirati backed Southern Transitional Council (STC) forces and Saudi-backed Hadi government forces are battling over territory in the country’s south.
Beginning in 2017, the Gulf Cooperation Council (GCC) partners had teamed up against oil-rich Qatar, blockading it for its connection to Iran and the Muslim Brotherhood. But after Saudi Arabia’s blockade completely failed to do its intended damage to Doha, the Saudi’s finally decided to lift the blockade earlier this January. Although the UAE was relatively quiet about this move, it continued to drag its feet and it was clear that the Emirati leadership wished to see further pressure.
The other notable move here was the UAE’s instant decision to normalize ties with Israel, establishing a working trade relationship and attempting to pressure Saudi Arabia to do the same. Yet, Saudi Arabia refused to quickly get entangled in the mess which could have resulted in such a move, instead it was likely that they advised Bahrain to take the step instead to test the waters. Given what just happened and the out-pour in popular Saudi (citizens) support for the Palestinian cause, despite government repression, during the latest attacks on Gaza, has perhaps justified the Kingdom’s decision not to yet normalize ties.
Seeing the new trade routes put on the table between the UAE and Israel, it is likely that the Saudis are not too happy about the ease with which this has all been achieved by Abu Dhabi, especially when access to key ports in Yemen has been denied by the staunch resistance of Yemen’s Ansarallah (Houthis) and even disputes with Oman in Yemen’s East. In both a gesture to show commitment to the Palestinian cause and in practice to punish the UAE, Saudi Arabia amended its rules on imports from GCC countries to disallow using goods produced in ‘freezones’ or using Israeli input from preferential tariff concessions. The UAE free zones are a huge driver of its economy, allowing for foreign companies to operate under light regulation.
Saudi Arabia also recently closed down all flights to the country from the UAE, citing ‘COVID-19 concerns’, yet it is speculated that this was likely another stab at the UAE.
If Saudi Arabia is looking to pursue the road of opposition to the rising UAE, which wishes to place itself as a regional powerhouse, a tighter realignment with Qatar and a working relationship with Iran may help pave to way to keeping it on top, as well as perhaps working with the Muslim Brotherhood on some fronts. It’s previous strategy of attempting to simply diversify its economy, opening it up to the West, whilst following the every word of war-hawks in Washington has not led the Saudi regime to victory. The UAE’s economy has much greater diversification and its intelligence networks are some of the most powerful in the region, with a very effective lobbying and business model, which expands from West to East. In order to compete with the rising UAE, Saudi Arabia will have to completely change its approach to regional politics, but this is assuming that Crown Prince Mohammed Bin Salman is truly looking to go down such a path.