The rift between Saudi Arabia and the UAE that freezes OPEC is a sign of the future

Dubai, United Arab Emirates-In early July, the unexpected disagreement between Saudi Arabia and the United Arab Emirates within OPEC shocked many people in the Gulf region and those looking outside the country.

This The dispute over the level of oil production The group’s ability to make plans for the market was temporarily frozen, leading to an increase in crude oil prices. But experts who have been following the region for a long time said that this is not the first time tensions between Arab neighbors and long-term close allies have emerged, and it may not be the last.

Abdulkhaleq Abdulla, a professor of political science in the UAE, told CNBC: “What happened here is that these are the two largest economies in the region, in the Arab world.” “And with Saudi Arabia. Arabs want to reform their economy, privatize, etc., there will inevitably be competition between them.”

“I think the competition between the two largest Arab economies has just begun,” Abdullah said. “And it will definitely intensify in the coming days.”

The strategic alliance between Riyadh and Abu Dhabi is becoming more and more active on the world stage, which is evident in many areas. It is usually related to the so-called close relationship between Saudi Crown Prince Mohammed bin Salman and his UAE counterpart Mohammed bin Zayed-some people even call it “brotherhood.”

But in the recent months before OPEC’s cracks appeared, conflicts of interest emerged. In February, Saudi Arabia announced that its government Will stop doing business with any international company By 2024, its regional headquarters will not be located in Saudi Arabia.This move is Generally regarded as targeting Dubai, The current headquarters hub in the Middle East.

Dubai, United Arab Emirates-The UAE announced a normalization agreement with Israel last year, becoming the first Gulf country to do so, and Saudi Arabia has so far publicly refused to do so. At the same time, Saudi Arabia has been making preliminary reconciliations with its rival Sunni power Turkey. The relationship between the UAE and Turkey is strained due to Ankara’s support for the Islamic ideology that the UAE leader considers a threat.

The two Gulf countries have some Diversity of interests in the Yemen warAlthough on the same side, the Saudis support an Islamic party that is not trusted by the UAE, while Abu Dhabi supports separatist tribes that are inconsistent with Riyadh’s goals. The UAE reduced its military activities in Yemen in 2019, while Riyadh is still involved in the conflict.

Hussein Ibish, a senior resident scholar at the Institute of Arab Gulf States in Washington, said: “It is generally believed that the worldview and interests of the UAE and Saudi Arabia are practically indistinguishable-the UAE is to some extent Saudi Arabian Attachments or appendages of the country.”, wrote in a blog post in July. “Never before.”

In early July, Saudi Arabia cancelled preferential tariffs on goods produced in free zones or associated with Israeli manufacturers. This is also seen as a direct blow to the UAE, which is the center of the free zone in the region. After this move, wave after wave of patriotic Saudis launched a campaign to boycott UAE goods through Twitter.

Although the UAE is Saudi Arabia’s second largest trading partner in terms of imports, this situation still occurs.

“The idea used to be to create a Gulf Cooperation Council market, but now people realize that Saudi Arabia and the UAE have very different priorities,” said Amir Khan, senior economist at the National Bank of Saudi Arabia. Tell Reuters In July. Khan said: “This regulation is adding fuel to the bones of these political differences.”

So, where will things go?

OPEC agreement reached in mid-July, Saudi Arabia and the UAE Energy Ministers praised each other and praised the work of the Group of Petroleum Producing Countries. Nonetheless, economic competition-at a time when oil-producing countries’ returns are extremely volatile-will not disappear anytime soon.

Tobias Bock, a Gulf Affairs researcher at the Royal United Service Institute in London, told CNBC: “We are coming out of this pandemic, and every country in the world needs to find a way to recover its economy.” “But for the Gulf monarchy. Especially for Abu Dhabi and Saudi Arabia, the situation is more complicated because they are also under pressure to find a way to transform their economies and get rid of their dependence on oil.”

“In that environment, frankly, everyone will take care of the first place,” Bok continued. “For all true friendships and continued pragmatic alliances, when it comes to economic issues, the friendship ends at some point and it becomes taking care of yourself.”

For UAE professor Abdullah, “the competition is too strong” to describe what is happening between the two countries.

“This may be a controlled, managed, and friendly game,” he told CNBC. “Or it may get out of control, and we will see it intensify in the next few months and years. We are still in the first five minutes of the game. We don’t know how it will develop-it may have an impact on the politics that binds the two countries together. The problem has some impact and some political spillover effects.”

“In the economic sphere, there are obviously conflicts in multiple areas,” Bok said. “You have somewhat abandoned your position now, and these positions are currently in conflict. Will they maintain this? We will wait and see.”