Saudi Arabia and UAE: The economic war behind the rivalry

WISE NEWS PRESS / ANKARA, TÜRKİYE — 02 JANUARY 2026

The escalating military tension between Saudi Arabia and the United Arab Emirates in Yemen reveals a deep-seated struggle for regional economic leadership as Riyadh seeks to displace Dubai as the Middle East’s premier business hub.

The rift, which intensified after Saudi forces targeted a UAE shipment in Yemen, marks the culmination of a strategic divergence that began in 2019. According to an analysis by the New York Times, the one-time close allies are now fierce competitors across the Middle East and Africa. While their partnership was forged through joint interventions in 2015, the current friction is driven by Saudi Crown Prince Mohammed bin Salman’s aggressive plans to transform Riyadh into a global financial center, posing an existential threat to Dubai’s long-standing commercial throne.

The "Brotherhood" Feud in Yemen

The most violent manifestation of this rivalry is occurring in Yemen, where the two nations support opposing factions. In December, the UAE-backed Southern Transitional Council seized control of oil-rich regions in southern Yemen, areas where Saudi Arabia has historically maintained influence. Riyadh has officially labeled these movements a security threat. Following a Saudi strike on an Emirati shipment—which the UAE maintains contained no weapons—Abu Dhabi announced the "voluntary" withdrawal of its remaining military forces from the country.

From Alliance to Global Rivalry

A decade ago, Saudi Crown Prince Mohammed bin Salman (MBS) and UAE leader Sheikh Mohammed bin Zayed (MBZ) were viewed by Washington as like-minded authoritarian reformers. However, their worldviews have since diverged significantly. Sheikh Mohammed bin Zayed maintains an ideological focus, viewing political Islam as a primary regional threat. In contrast, Prince Mohammed bin Salman is described by analysts as a ruthless pragmatist willing to shift political positions to achieve his Vision 2030 goals.

Economic Pressure and Regional Conflict

The economic struggle became overt in 2021 when the Saudi government pressured international corporations to move their regional headquarters to Riyadh or face exclusion from state contracts. This competition has also spilled over into Sudan. The UAE has been accused of supporting the Rapid Support Forces (RSF), while Saudi Arabia backs the Sudanese army and hosts peace talks. U.S. Senator Marco Rubio recently noted that outside powers are fueling the conflict with money and weapons, complicating diplomatic efforts for the Trump administration.

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