UAE firms pull out of Saudi defence show as Gulf tensions spill into business – Firstpost

Some UAE companies have withdrawn from a major defence exhibition scheduled to take place in Saudi Arabia, according to a Reuters report, citing two sources with direct knowledge of the matter, in a further sign that tensions between the two Gulf oil powers may be spilling over into business relations.

The World Defense Show is due to be held in the Saudi capital, Riyadh, from February 8 to 12.

It was not immediately clear whether all UAE companies listed under the country’s pavilion had pulled out of the event.

Trickle down effect

Once regarded as twin pillars of regional security, Saudi Arabia and the United Arab Emirates have seen their strategic interests steadily diverge, with differences emerging on issues ranging from oil production quotas to broader geopolitical priorities.

Those disagreements surfaced publicly in December, when advances by a UAE-backed southern Yemeni separatist group brought the fighting uncomfortably close to Saudi Arabia’s borders.

The situation escalated when the Saudi-led coalition carried out an air strike on a weapons shipment linked to the UAE at the Yemeni port of Mukalla.

Although the UAE has since withdrawn all its forces from Yemen, tensions have persisted. Saudi Arabia has alleged that the UAE assisted a prominent Yemeni separatist figure in escaping through Somalia, an accusation that has further strained relations.

The UAE’s withdrawal from a major annual defence exhibition has underscored concerns that the rift between the two oil-producing powers could begin to affect the extensive trade and investment ties that bind them.

While cross-border dealmaking has so far remained largely unaffected, Gulf-based business sources say unease is starting to filter into the commercial sector, with companies quietly preparing for potential disruptions even as day-to-day trade continues.

With inputs from agencies