Daijiworld Media Network – Saudi Arabia
Saudi Arabia, Jan 28: Middle East businesses are closely monitoring rising tensions between Saudi Arabia and the United Arab Emirates, amid fears that any further escalation could affect trade and investment flows at a time when both countries are emerging as major regional powerhouses in commerce and finance.
The unease grew after reports surfaced in December that Saudi Arabia gave UAE forces 24 hours to withdraw from Yemen, following which Saudi media stepped up rhetoric against the Emirates. While no formal diplomatic or commercial actions have been announced so far, companies with operations in both countries have reportedly begun contingency planning to ensure business continuity if the situation worsens.
For global investors and multinational firms, the developments have revived memories of the 2017 blockade of Qatar by Saudi Arabia, the UAE, Bahrain and Egypt, which lasted over three years and caused disruptions to regional supply chains. Adding to the uncertainty, US President Donald Trump recently said an “armada” of US Navy vessels was heading to the Middle East, while he continued to issue threats of strikes against Iran.
“At this stage, companies are not reacting operationally; they are asking baseline questions,” said Hussein Nasser-Eddin, CEO of Dubai-based security services provider Crownox. He noted that most queries revolve around financial resilience in case of escalation and whether there are early signs of diplomatic or consular changes.
Some UAE-based firms have reportedly faced difficulties in obtaining Saudi business visas. However, a Saudi government official denied any change in visa rules or procedures for UAE residents, stating that the number of issued visas remains unchanged. The UAE government has not responded to the matter.
Meanwhile, at least one UAE-based supplier to Saudi Arabia is said to be considering building inventory as a buffer, while some funds and firms are exploring plans to open offices in the kingdom to reduce risk in case of cross-border restrictions.
Around $22 billion in trade between the Gulf’s two largest economies is at stake, along with broader business confidence as both nations compete to strengthen their status as global financial hubs. Their sovereign wealth funds have emerged as major global investors across sectors such as energy, technology, healthcare and finance — fuelling an increasing rivalry for dominance as the region’s leading business destination for Wall Street giants, hedge funds and asset managers.
The tensions also highlight the complex balancing act facing international financial firms seeking access to an estimated $3 trillion controlled by sovereign wealth funds in Abu Dhabi and Riyadh, while maintaining operations across both markets.
Despite the heightened political chatter, several business professionals said there has been no major disruption to investments or commercial activity so far, and many remain hopeful that leaders will resolve differences through behind-the-scenes diplomacy.
There have also been indications of a willingness to de-escalate. Saudi Foreign Minister Prince Faisal bin Farhan Al Saud said the UAE’s decision to leave Yemen — “if that indeed is the case” — could help improve ties. Saudi Finance Minister Mohammed Al-Jadaan also expressed confidence that both sides could “reach an agreement to deescalate,” noting that aside from national security matters, everything else remains open for discussion.
Recent events suggest global businesses are increasingly adapting to geopolitical volatility. Even the 12-day conflict between Israel and Iran last year, which included Iranian missile strikes on a US base in Qatar, reportedly had limited impact on business operations.
Market indicators also point to stability, with UAE financial institutions continuing to buy Saudi bonds at nearly the same pace as before, while major Emirati lenders have played a role in underwriting several bond sales.
“It could slow growth, but as long as it doesn’t escalate to an existential threat to either side, most folks will come around eventually and go back to doing business as usual,” said Ryan Bohl, senior Middle East and North Africa analyst at Rane Network.