Competition over the Containers: A Struggle for Supremacy
The recent public disagreement between the United Arab Emirates (UAE) and Saudi Arabia within the OPEC+ group has sent ripples through international markets. This latest spat, which has been a crack in their strategic partnership, particularly since 2015, is another manifestation of the changing dynamics in the Saudi-Emirati relationship.
At the heart of the dispute is the UAE's opposition to the extension and expansion of a supply deal without first increasing its baseline production. The UAE's demand for a higher quota in the OPEC+ deal can be seen as an economic measure aimed at self-preservation in a more competitive landscape. This firm objection to the OPEC+ deal also signifies a projection of power, reflecting the UAE's growing self-perception as a regional power.
The relationship between the UAE and Saudi Arabia, however, remains solid despite the public clash. The marriage between the two nations, which has ebbed and flowed since the founding of the UAE in 1971, still needs each other, as they increasingly compete in several domains. The Saudi-Emirati Coordination Council established in 2016 and the GCC have not been able to resolve the current dispute due to personalized state relations in the Gulf.
Dhahi Khalfan, a former UAE official, and Turki Al Sheikh, an advisor to the Saudi Royal Court, have both expressed unsparing views about the situation on Twitter. Their statements highlight the awareness of changing dynamics in the Saudi-Emirati relationship, which is crucial in resolving the current oil spat.
The region is not yet in a state where differences could snowball and negatively impact the neighborhood, but it needs to avoid replicating economic diversification models without much innovation to prevent more aggressive forms of competition. The awareness of changing dynamics in the Saudi-Emirati relationship is crucial in resolving the current oil spat and in shaping the direction of the Middle East.
Three factors to watch in the Saudi-Emirati relationship are the extent of UAE power projection, the tolerance of coordination during economic competition, and the impact of rapidly shifting domestic, regional, and global developments on their threat perceptions and geopolitical standing. The public airing of disagreements is a new normal in the Gulf, paradoxically a blessing in disguise, as it raises citizens' awareness of public affairs.
The recent dispute should be understood against the backdrop of a growing perception in the Gulf that the post-oil era is nearing. The region is undergoing major recalibration, with rising economic competition in the Gulf and a more assertive Emirati voice being two of its clearest manifestations. Despite the challenges, the relationship between the UAE and Saudi Arabia will likely survive the latest disagreement, as the benefits outweigh the costs.
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