The United Arab Emirates (UAE) announced on April 28 that it will leave the global cartel of oil producers OPEC. Her decision is the latest sign that the war in the Middle East has not only deepened hostilities between Iran and its Gulf neighbors, but also among Gulf states.
Founded in 1960, OThe PEC is a rare success story among multilateral organizations in the region. Its policies opened the way that the oil producers of the Gulf have sufficient funds to buy or renationalize their oil resources and finance the spectacular development of their states.
The organization has survived all major revolutions and wars in the region so far, although Qatar left in 2019 when it was blocked by its Gulf neighbors.
Saudi Arabia, OPEC’s largest oil producer, has significant leverage within the group. This has led to tension with the United Arab Emirates, which has for some time pushed for higher production quotas for itself, given its spare capacity. These efforts have been in vain.
However, her decision to leave OPEC is about more than just disillusionment with the organization.
Although it was very close to Saudi Arabia in the mid-2010s, the United Arab Emirates has in recent years distanced itself from its largest neighbor. This has been driven by a number of regional issues, including countries’ different strategies in wars Yemen AND SUDANand their respective relations with Israel.
United Arab Emirates normalized relations with Israel in 2020, while the Saudis say that it will just normalize once a Palestinian state is established.
Both countries have recently become serious economic competitors. And although both states have been hit hard by Iran in the current war, the conflict appears to have accelerated their rivalry.
Saudi Arabia is the largest and richest country in the Persian Gulf. But many of its transformative economic projects require political stability and high oil prices to succeed.
The war has exposed the limitations of its policy of tentative rapprochement with Iran and its partnership with a US that is so closely allied with Israel. So the Saudis have strengthened defense ties with nuclear-armed Pakistan.
These deepening ties have been met with concern in the United Arab Emirates, which has close ties to India. The Emirates have been critical of Pakistan during the war, calling on Islamabad to punish the Iranians more forcefully – something that is not possible because of Pakistan’s role as a mediator in the peace negotiations.
At least partially disappointed by its response to the war, the United Arab Emirates recently demanded that Pakistan repay a loan of 3.5 billion dollars. Saudi Arabia immediately came to Pakistan’s rescue by providing financial support.
The UAE’s announcement to leave OPEC coincided with a meeting of the Gulf Cooperation Council in the Saudi capital Riyadh, where members asked to find common ground for the war in Iran. This was a huge insult to the Saudis.
Other Gulf Frictions
The war has fueled other frictions in the Persian Gulf, including reviving old tensions between the UAE and Iran over three islands – Abu Musa, Greater Tunb and Lesser Tunb – that Iran seized at the time of the Emirates’ independence from Britain in 1971. These islands strengthen Iran’s strategic position along the Gulf shipping lanes.
The United Arab Emirates has long claimed sovereignty over the islands, while Iran claims they were always part of its territory. Iran’s control of the three islands is thought to be part of one secret agreement between Britain and the Shah of Iran around 1970, where the Shah would give up Iran’s claim to Bahrain in exchange for the islands.
This and other historic border disputes in the region, including between the United Arab Emirates, Saudi Arabia and Oman, remain some of the most sensitive topics in modern Gulf history. For a forthcoming book on the rise of the Gulf states, I have tried to access relevant UK Foreign Office documents, but have been refused numerous freedom of information requests on sealed material dating from the 1960s and earlier.
The northern Gulf state of Kuwait has also been hit hard during the conflict. Here, many attacks appear to have come from Iraq-based Shiite militias. These attacks have revived traumatic memories of political violence linked to Iran in the 1980s and the invasion of Iraq in 1990.
States that cannot bypass the closed Strait of Hormuz – such as Bahrain, Kuwait and Qatar – have experienced the greatest economic damage from the war. To balance its budget, Bahrain is already dependent on aid from the wealthier Gulf states. The United Arab Emirates, Saudi Arabia and Oman, on the other hand, have the geographical means to bypass Hormuz.
Oman, which controls one side of the strait, could benefit in the long run. This could be either through a new deal with Iran to charge ships, or because its ports on the Arabian Sea will grow in importance – perhaps even reviving some of Oman’s former glory when it was a major regional power. This is not something the neighboring United Arab Emirates and Saudi Arabia would like to see.
The reckless US-Israeli attack on Iran has thus opened old fault lines and may create new ones between the states around the Gulf. It is also undermining the few avenues of regional cooperation that remain. This makes a fragmented and dangerous region even more so.
Toby Matthiessen is a senior lecturer in Global Religious Studies, University of Bristol
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