Why Did Saudi Arabia and UAE Shift From Allies to Fierce Gulf Rivals?

For nearly a decade, Saudi Arabia and the United Arab Emirates (UAE) acted as close partners across the Gulf. Both capitals worked with Washington on regional security and counterterrorism. Oil wealth fueled diplomacy and infrastructure across West Asia and Africa. However, this unity has now steadily eroded. A visible rivalry has emerged, driven by competing ambitions and diverging economic priorities. This intra-Gulf power struggle holds global implications for commercial aviation and logistics.

The Yemen Flashpoint and Red Sea Routes

The rivalry’s most visible sign appeared in Yemen. On 30 December 2025, Saudi-led forces struck Yemen’s port city of Mukalla. Saudi authorities claimed the operation targeted weapons from the UAE. These weapons were allegedly bound for the UAE-backed Southern Transitional Council (STC). Abu Dhabi rejected this allegation outright. UAE officials stated the vehicles were for their own deployed forces. Shortly after, the UAE announced the withdrawal of its remaining troops from Yemen. This Mukalla strike represents a clear rupture between the two capitals. Coalition warfare has evolved into direct competition over ports and post-war influence. This instability directly impacts Red Sea trade routes and critical humanitarian supply chains.

Structural Economic Competition: Riyadh vs. Dubai

Beyond the battlefield, economic rivalry has taken center stage. Saudi Arabia is leveraging its economic scale to challenge Dubai’s dominance. The Kingdom’s Vision-linked goals aim to diversify its economy. A key policy tool is the Regional Headquarters (RHQ) requirement. Since January 1, 2024, international companies must have an RHQ in Saudi Arabia to secure government contracts. This policy directly pressures Dubai’s long-dominant services and finance ecosystem.

Data shows this policy is working. As of 2025, over 540 multinational companies became RHQ participants. This number exceeds the original 2030 target of 500 companies. In 2024, the UAE saw a 31% decline in new RHQ projects. Consequently, competition has shifted from market rivalry into a zero-sum geopolitical contest.

Aviation Hub Rivalry: The Battle for Connectivity

The most significant commercial aviation impact is the Gulf hub competition. Dubai International Airport (DXB) remains the global leader. In 2023, DXB handled 87 million passengers and 1.8 million tons of cargo. Riyadh’s King Khalid International Airport (RUH) handled 37 million passengers and 440,000 tons of cargo in the same year.

Saudi Arabia's Aviation Ambitions

Saudi Arabia is aggressively pursuing its National Aviation Strategy. The plan aims to attract $100 billion in investments by 2030. It seeks to triple annual passenger traffic to 330 million. The Kingdom is launching a new national airline, Riyadh Air, to challenge regional carriers like Emirates.

New infrastructure is also central to this strategy. The planned King Salman International Airport (RUH) in Riyadh is a massive project. It aims to accommodate 120 million passengers and 2 million tons of cargo by 2030. Saudi Arabia’s aircraft orders from manufacturers like Airbus signal this rapid expansion.

Dubai’s Response and Connectivity Advantage

Dubai is not yielding its position. Plans for Al Maktoum International Airport (DWC) are even larger. The DWC expansion aims for a capacity of 260 million passengers annually. The UAE retains a clear advantage in global aviation-finance connectivity and established networks. The route between Dubai and Riyadh is already a major corridor. It ranked among the world's top 10 busiest international routes in 2025. This route recorded 4.5 million scheduled seats. This shows the strong business ties, despite the political tensions. The International Air Transport Association (IATA) stresses the need for regional coordination. This is vital to handle the projected Middle East aviation growth. For more commercial aviation news, visit flying.flights.

Strategic Divergence and Global Impact

The two U.S. allies now operate with different regional playbooks. Saudi Arabia prioritizes risk management and de-escalation. This protects its domestic economic reforms and foreign investment confidence. The UAE, conversely, favors power projection. This involves backing local partners and securing long-term footholds. These tactical differences deepen mistrust. They convert into a strategic rivalry that Washington finds costly to manage. Ultimately, strategic competition now outweighs their former strategic alignment. This shift creates uncertainty for all Middle East security frameworks.