The Latest Incident: On December 30 2025, the Saudi Air Force bombed two Emirati ships unloading military hardware at Mukalla port in Hadhramaut province in southern Yemen (please see Map 1 below). The cargo was apparently destined for the forces of the Southern Transitional Council (STC), a separatist militia supported by the UAE, although the latter claimed that it was for its own anti-terror units in the area recently occupied by the STC. While protesting the Saudi action, Abu Dhabi announced that it was withdrawing its units from Yemen.
Map-1: Current Geopolitics in Yemen
2. The Context: Although this military action may seem against the apparent cordiality of the bilateral ties between the Kingdom of Saudi Arabia and the United Arab Emirates, it is only the latest episode in their recurring frictions for over 70 years over issues such as territorial disputes, oil production, geopolitical posturing, economic rivalry, and personality clashes. In this article, we briefly examine the history of such instances and place the current state of bilateral relations in its historical context.
3. The History: To start with, the present Kingdom of Saudi Arabia was proclaimed by King Abdulaziz in 1932. Following oil discovery in the 1930s, it entered into an unwritten “Security-for-Oil” compact with the United States in 1945. The Trucial States and Oman, however, had the British mentorship till the formation of the United Arab Emirates in 1971. Today, Saudi Arabia (population: 33.7 mn; Area: 2.15 mn sq kms, and GDP: $1.27 tr) dwarfs the United Arab Emirates (population: 11 mn; Area: 83,600 sq kms, and GDP: $549 bn). While Saudi Arabia is a unitary monarchy run by the Al-Saud royal family, the UAE is a federation of seven emirates, of which oil-rich Abu Dhabi (run by the Al-Nahyan royal family) and business hub Dubai (run by the Al-Maktoum royal family) are the most important. The two countries have, in general, cordial ties. They are among each other’s top five trading partners. They also share membership of the Gulf Cooperation Council, the Arab League, OPEC and the OIC.
4. The UAE-KSA Differences: The bilateral history of Saudi Arabia and Abu Dhabi/the UAE is peppered with some bitter frictions. The following, in chronological order, are the disputes between Saudi Arabia and Abu Dhabi/the UAE:
(i) Territorial Dispute 1: The two countries share a common border of 457 kms (please refer to Map 2 below) between the Eastern Province of Saudi Arabia and the Abu Dhabi Emirate. The common border was demarcated in the late 1950s after a bitter dispute during 1952-55 regarding the ownership of the oil-rich Buraimi oasis at the trijunction of Saudi Arabia, Oman and the Abu Dhabi emirate. Although Saudis enjoyed over-the-horizon support of the United States and the Aramco Oil Company, the active British armed intervention on the side of Oman and Abu Dhabi eventually carried the day. This military defeat and loss of face embittered the Saudi leadership. Nearly two decades later, when the UAE was constituted in December 1971, the Kingdom refused to recognise it as a country and continued to deal with the constituent emirates on an individual basis. On 21 August 1974, the Treaty of Jeddah was signed between Sheikh Zayed and King Faisal, finally demarcating the frontiers between the Emirate of Abu Dhabi and Saudi Arabia, leading to Saudi recognition of the United Arab Emirates. However, the UAE has still not ratified this treaty and has sought to renegotiate its crucial part to make the Saudis share the oil revenue from the Zararah oilfield. Saudis have denied that plea.
Map-2: The UAE, Saudi Arabia, Oman and Qatar
(ii) Territorial Dispute 2: While the UAE and Qatar initially had a common border of around 19 kms, Saudi Arabia also claims this territory and access to the sea east of Qatar. Under the Treaty of Jeddah, 1974, Saudi Arabia got a 25 km corridor eastwards from Khor Al Adaid, thus giving the Saudis an outlet to the Persian Gulf on the eastern side of Qatar. In return, the UAE was to keep six villages in the area of Al-Buraimi, including al-Ain, and most of the al-Zafra desert. Subsequently, in 1977, the UAE and Saudi Arabia reportedly arrived at a secret agreement giving more of the UAE’s coastline to Saudi Arabia. When the UAE and Qatar later sought to build a causeway and a gas pipeline, Saudi Arabia protested. The Emirati side continues to be dissatisfied with some of the provisions of the Jeddah Treaty, which it claimed to have signed under force majeure. It also claims that the borders under the Jeddah Treaty do not conform to the oral understanding between the two delegations. It continues to show its land territory reaching to the Qatari border. As late as August 2009, Saudi immigration refused entry to the Emiratis carrying identity cards with an “incorrect map” of their common border.
(iii) OPEC Oil Quotas: In July 2021, OPEC meetings, Saudi Arabia, and the United Arab Emirates had disputed over oil production limits as the UAE wanted to monetise its natural resources as quickly as possible to help drive the transition away from fossil fuels. It also wanted its OPEC production quota to be raised in commensurate with its enhanced production capacity. Riyadh, on the other hand, wanted deep collective production cuts to shore up the oil prices in a tailspin following a sharp decline in demand due to the Covid-19 pandemic. At one point during the dispute, Abu Dhabi threatened to leave OPEC. Saudi Arabia and the UAE later settled the difference with a compromise to gradually raise the UAE production quota.
(iv) MbZ-MbS Rupture: The UAE leader, Mohammed bin Zayed (MbZ), mentored and groomed Prince Mohammed bin Salman (MbS) after his initial appointment as Deputy Crown Prince and Defence Minister of Saudi Arabia in 2015. MbZ reportedly lobbied hard, albeit in a discreet manner, for MbS in corridors of power in both Washington and Riyadh to facilitate his accession to Saudi power. MbS took over as the Crown Prince in 2018 and as Prime Minister in 2022. His dramatic rise went against the long-established convention of the ascendancy of the senior-most son of the late King Abdulaziz, founder of the current Kingdom. Initially, MbS followed the Emirati playbook by liberalising the Saudi economy and society, and the two leaders collaborated in joint action against Qatar and Yemen. However, soon differences began emerging with MbS perceiving that MbZ was leading him up a blind alley as the UAE left the Saudi-led Yemeni coalition. Moreover, with the Saudi economy double the size of that of the UAE, highly ambitious MbS did not want to be seen as tied to MbZ’s apron strings. Saudi Arabia triggered an economic rivalry with the UAE by requiring foreign companies to relocate their regional headquarters to Saudi Arabia to qualify for the award of government contracts, which were very substantive under MbS’s Vision 2030. This directly threatened Dubai and Abu Dhabi, where most such regional headquarters were hitherto based, to take advantage of friendlier economic and societal norms. Currently, this economic rivalry is truly underway with both MbS and MbZ pursuing their expansionist agendas involving access to top-end US artificial intelligence technology, e-sports, etc.
(v) Geopolitical Differences: In a trailblazing initiative in 2020, the UAE established diplomatic ties with Israel in 2020 under the “Abraham Accords”. Saudi Arabia under MbS has, however, resisted the American pressure to do so, insisting on a clear pathway to a two-state solution to the Israel-Palestine question. Saudi Arabia and the Emirates have nuanced differences on “Political Islam”: while Saudi Arabia wants to control it, the UAE is clearly against it.
(vi) Regional Geostrategy: During the past decade, the UAE has surreptitiously supported the successionist movements in Libya (Gen. Khalifa Haftar), Sudan (Rapid Support Forces), Yemen (Southern Transitional Council) and Somalia (breakaway Somaliland). This has often been done in the guise of humanitarian relief (in Libya and Sudan), maritime concessions by Dubai-based DP World (in Djibouti and Somaliland) and anti-terrorism (Yemen), etc. Saudi Arabia, on the other hand, prefers unitary sovereign states. Riyadh perceives the UAE’s regional geo-strategic activities as aimed at containing Saudi Arabia’s regional influence and is increasingly active against it. These frictions came to a head on December 30, 2025, when the Saudi air force bombed the Emirati ships in Mukalla, capital of Hadhramaut province bordering southern Saudi Arabia. Observers expect this Saudi hardline against the Emirati activities to be increasingly visible elsewhere in the region in the near future.
5. The Implications: Over the past few years, the ties between Riyadh and Abu Dhabi have declined from joint regional management to managed competition for prestige, influence and geo-strategic space. Unless contained through bilateral or external means, the competition may escalate centrifugally to a veritable conflict waged through proxies in the regional hotspots. The KSA-UAE polarisation may force geopolitical realignment with regional states being sucked into loose alliances. Other regional powers such as Israel, Iran, Egypt and Turkey may seek to exploit the schism between the region’s top two powerhouses for their economic and/or strategic benefits. Ever nimble Pakistan, for one, would alternately try to play both sides of the divide for its own strategic and economic ends. As MbZ’s short visit to New Delhi on January 19 demonstrated, unless India is careful, it may get involved in this issue. The rivalry between Riyadh and Abu Dhabi is likely to spill to the global level, particularly in the currently oversupplied oil market. In case these two major OPEC oil producers exceed their respective production quotas, the commodity price may fall further. At a different level, the split among the two main regional allies has put the United States in a piquant situation. President Trump has plenty at stake. On one hand, MbS has been his presumptive partner in the Gulf with a promise to invest at least $600 bn in the American economy. On other hand, MbZ is his Abraham Accords ally, and AI front-running stakeholder with the US tech giants. Although for Washington, a failure to calm down MbS-MbZ tensions is not an option, it is also difficult to see how President Trump’s transactional diplomacy would heal this multilayered rift. Yet, playing favourites with either or alternating between them is likely to be counterproductive when the White House needs a regional Pax Americana to push its agenda over Palestine and Iran. As both antagonists have substantive ties with major powers, the US loss of influence over them could mean gains for China, Russia, India and major Western European powers.
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The previous issue of The New US National Security Strategy: Implications for the WANA Region are available here: LINK
