Gulf Rift Spills into Business as UAE Firms Withdraw from Saudi Defence Exhibition
Tensions between the United Arab Emirates and Saudi Arabia are beginning to ripple beyond diplomacy and security, seeping into commercial and investment relations, as several UAE companies withdraw from a major defence exhibition scheduled to take place in Riyadh.
According to two sources with direct knowledge of the matter, some UAE-based firms have pulled out of the World Defense Show, which is set to run from February 8 to 12 in the Saudi capital. The exhibition is one of the region’s most prominent defence industry gatherings, bringing together global manufacturers, policymakers, and military officials. It remains unclear whether all UAE participants listed under the national pavilion have withdrawn, or if the move is limited to specific companies.
Neither the UAE Ministry of Foreign Affairs nor the Saudi government’s media office issued immediate comments on the reported withdrawals.
From Strategic Partners to Strategic Rivals
Once regarded as twin pillars of Gulf and regional security, Saudi Arabia and the UAE have increasingly found themselves on divergent paths. Their differences now span a wide range of issues, from oil production quotas within OPEC+ to broader geopolitical priorities across the Middle East and Horn of Africa.
These tensions surfaced publicly in December, when a military advance by a UAE-backed southern Yemeni separatist group moved closer to Saudi Arabia’s borders, triggering alarm in Riyadh. The situation escalated rapidly, culminating in a Saudi-led coalition strike on a weapons shipment at Yemen’s port of Mukalla that was reportedly linked to the UAE.
Although Abu Dhabi has since withdrawn its forces from Yemen, strains have persisted. Saudi Arabia has accused the UAE of assisting a prominent Yemeni separatist figure in fleeing via Somalia, an allegation that has further deepened mistrust between the two allies-turned-rivals.
Business Community Feels the Pressure
The withdrawal of UAE firms from the annual defence show is being interpreted by analysts and business leaders as a symbolic but significant sign that political disagreements are beginning to spill over into commercial domains.
While trade flows and cross-border investment activity between the two countries remain largely intact for now, Gulf-based business leaders say unease is growing. Companies are quietly revisiting contingency plans and conducting internal risk assessments, even as day-to-day commerce continues uninterrupted.
“There is a growing sense that tensions at the political level could eventually translate into business disruptions,” said one senior Gulf-based executive. “For now, it’s manageable, but people are watching closely.”
Saudi Arabia and the UAE maintain deep economic ties, with bilateral trade estimated at around $30 billion. Goods, capital, and executives move frequently between the two economies, underscoring how intertwined their commercial ecosystems have become.
Echoes of the Qatar Blockade
Within the regional business community, memories of the 2017 Gulf crisis, when Saudi Arabia, the UAE, and allies imposed a trade and diplomatic boycott on Qatar, remain fresh. That standoff, which lasted until 2021, forced banks and investors to take sides and led to capital restrictions that reshaped regional investment flows.
Some investors now fear that if the current Saudi-UAE rift deepens, similar measures could resurface, even if in subtler forms. During the Qatar blockade, certain Saudi-linked funds imposed limitations on deploying capital in Doha, a precedent that continues to influence risk calculations today.
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The stakes may be even higher this time. Many large Saudi family-owned conglomerates and major corporations maintain significant operations in the UAE, where regional headquarters and senior management teams are often based. Any prolonged disruption could affect flight routes, supply chains, staffing arrangements, and investment decisions across multiple sectors.
Questions that would have seemed implausible just months ago, such as potential interruptions to logistics networks or air travel, are now being factored into internal planning, according to Gulf-based business sources.
“Everyone stands to lose if this escalates,” said one senior business figure, reflecting the broader concern that a prolonged rift between the Gulf’s two largest economies could have far-reaching consequences for regional stability and growth
