Saudi-UAE rivalry reveals a deeper structural clash between state integrity and pragmatic fragmentation, beyond Yemen, with broader implications for regional order and Europe. Managed competition, not open confrontation, is essential to preserve Gulf stability, safeguard modernization agendas, and protect European economic and strategic interests.

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State Integrity versus Pragmatic Fragmentation: Power Projection beyond Yemen

In December 2025, tensions between Saudi Arabia and the United Arab Emirates (UAE) broke out openly in southern Yemen, reflecting a deeper disagreement over the country’s political future and beyond. More broadly, the confrontation reveals a structural divide between the UAE and Saudi Arabia, with brotherly competition giving way to open rivalry.

The kingdom has increasingly positioned itself as a status quo power, viewing non-state actors and secessionist movements in Sudan as threats to regional stability. Following years of assertive interventionism, Riyadh has since 2019 shifted toward mediation and a “zero-conflict” approach, as reflected in reconciled ties with Qatar and Iran and closer security coordination with Egypt, Somalia, Turkey, and Pakistan amid growing tensions with the UAE.

By contrast, the UAE has strategically engaged non-state actors such as the Southern Transitional Council (STC) in Yemen or the Rapid Support Forces (RSF) in Sudan to secure maritime chokepoints and its maritime footprint, trade routes, and global credibility as a fighter against terrorism and Islamist extremism. In the UAE, this ‘win-win’ approach – treating existing rivalry through de-escalation and preventive diplomacy – is framed as a pragmatic response to fragile state environments, relying on crisis management, rather than fragmentation, as an instrument of pragmatic containment.

In this context, the UAE is no longer willing to play a “little brother” role for Saudi Arabia; it considers strategic autonomy as the guiding principle in an increasingly fragmented global order.

Geopolitical divergence is further evident in differing alliances, particularly regarding Israel. Following Hamas’s October 7, 2023, attack, Saudi Arabia reaffirmed its pro-Palestinian stance and froze normalization talks with Israel. The UAE, however, maintained its Abraham Accords partnership, signed in 2020, providing humanitarian aid to Gaza and expanding trade ties.

Already in 2021, the two states conducted joint naval exercises in the Red Sea and were reported to have established shared facilities on the Yemeni islands of Perim and Socotra. Israeli recognition of Somaliland in December 2025 and the UAE’s DP World investment with a volume of USD 442 million in Berbera heightened Saudi fears of an Israeli-UAE encirclement and an emerging UAE-Israeli regional security architecture, compounded by the STC’s openness to Israeli engagement.

Where post-‘Arab Spring’ coordination between Saudi Arabia and the UAE was described as an “axis of cooperation,” the Israel-UAE partnership is now framed by critics as an “axis of fragmentation.”

Economic competition further sharpens tensions but is not new, as both the UAE and Saudi Arabia are pursuing similar business models centered on technological innovation, foreign investment, economic statecraft, and nation- and place-branding through tourism, entertainment, sports, and creative industries.

In 2020/2021, both oil producers clashed over oil policy at OPEC+, with Riyadh tightening tariff-free criteria in a move seen as targeting the UAE’s free zones. That same year, Saudi Arabia required firms seeking government contracts to base their regional headquarters in the kingdom by 2024 and launched its new airline, Riyadh Air, directly challenging the UAE’s long-standing dominance in aviation.

Today, both seek to present themselves as hubs of excellence and innovation. Yet, despite Saudi efforts to marginalize the UAE, Abu Dhabi remains too economically significant to sideline. Any Saudi attempt to pressure partners to disengage from the Emirates would thus risk undermining Riyadh’s own economic ambitions and damaging the broader Gulf business model.

As of 2024, the UAE remains Saudi Arabia’s fifth-largest trading partner, with Saudi exports totaling USD 18.7 billion, while Saudi Arabia ranks as the UAE’s ninth-largest trading partner, with exports to the UAE valued at USD 12.4 billion. Such data, along with dense personal, business, and infrastructural ties, underscores the high cost of confrontation.

Today, Saudi Arabia’s modernization agenda, Vision 2030, faces growing constraints. Fiscal pressures, volatile oil prices, domestic challenges – such as youth unemployment at 11.5% in 2024 and rising living costs – have forced a recalibration away from prestige megaprojects toward job creation, housing, education, and urban livability.

Hence, a prolonged rupture with the UAE would jeopardize the kingdom’s ambitious diversification goals. Within the Gulf Cooperation Council (GCC), Qatar, Oman, and Kuwait have little interest in further escalation and want to prevent a ‘Gulf crisis 2.0’ scenario similar to the blockade of Qatar by the UAE, Saudi Arabia, Bahrain, and Egypt from 2017 to 2021, at all costs.

Stability is essential to their diplomatic and economic models, and a deep Saudi-UAE divide would threaten the narrative of a cohesive and prosperous Gulf. While episodic tensions are thus likely to persist, a full rupture appears unlikely.

Selective cooperation remains possible, particularly on cross-border challenges such as climate adaptation, digital transformation, future technologies, and specific regional security files. For instance, neither Abu Dhabi nor Riyadh is interested in a full escalation between Iran and the US; both instead seek to prevent US President Donald Trump from attacking the Islamic Republic.

Joint investments in artificial intelligence, quantum technologies, and digital infrastructure could further offer both countries competitive pressure and opportunities for synergy.

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Ignoring the UAE–Saudi Rift Is Not an Option: Why Europe Should Be Concerned

For Europe, this crisis also carries significant economic and geopolitical implications.

Economically, European companies are deeply embedded in Gulf markets, while Gulf sovereign wealth funds (SWFs) hold substantial investments across Europe’s financial and industrial sectors. Continued friction between Riyadh and Abu Dhabi poses a dual threat by destabilizing not only regional trade networks but also European business interests.

Moreover, as both Saudi Arabia and the UAE are pivotal suppliers of energy, ranging from hydrocarbons to emerging sectors such as hydrogen, a prolonged rift could disrupt ongoing transformations in energy partnership and diversification strategies.

Beyond economics, Europe’s motivations in Gulf stability are strategic. Against the backdrop of transatlantic uncertainties, potential US-Iran confrontation, and the Russia-Ukraine war, the EU views Gulf states as critical anchors of regional stability, conflict mediation, and crisis management.

In light of the UAE-Saudi rivalry, regions of utmost geostrategic interest for Europe, such as the Red Sea, will remain “a nexus of instability.” In Syria and Gaza, an ongoing UAE-Saudi rift further undermines perspectives for reconstruction – another European priority.

Reliable partnerships with Riyadh and Abu Dhabi thus remain essential for advancing Europe’s security, energy, and diplomatic goals.

Despite the significance of these dynamics, the Saudi-UAE rift has so far received too little attention in European political or public discourse. A more proactive European approach is required, which should promote dialogue and de-escalation through diplomatic engagement.

The EU, its member states, and the European business community should leverage their longstanding economic partnerships to encourage reconciliation and mutual confidence-building between both Gulf actors. While the US maintains much greater direct influence over both leaderships, Europe still retains relevant instruments of engagement and leverage.

Shared interests in maintaining international order, maritime security, energy cooperation, and open trade provide the basis for constructive facilitation. Together with regional intermediaries such as Egypt or Qatar, European actors can thus play a limited but meaningful role in easing Saudi-UAE frictions, thereby safeguarding their respective interests.

To do so, a clear and nuanced assessment is required to evaluate the concrete outcomes of the crisis and its potential implications for Europe.

First and foremost, the crisis needs to be understood and taken seriously across European capitals. For instance, the EU could steer Saudi-UAE competition toward sustainable reconstruction by tying European funding to credible governance outcomes rather than projects seeking political influence.

Furthermore, the current anti-UAE pushback also presents an opportunity for European actors to pressure the UAE into adopting more constructive policies in areas where its actions have previously conflicted with European interests, such as the Red Sea.

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Conclusion

Ultimately, the Gulf’s stability depends on managed competition rather than open confrontation. A functional balance between Riyadh and Abu Dhabi is essential to sustaining regional stability, investor confidence, and long-term modernization, without which the Gulf’s model of flexibility, pragmatism, and connectivity risks erosion.

As of today, the rift threatens not only regional cohesion but also Europe’s strategic interests. Here, Europe should treat this crisis as a priority, pursuing balanced, proactive engagement without taking sides to preserve modernization agendas, protect mutual investments, and sustain the Gulf’s role as a critical node of global connectivity.