Key facts
- Companies report that Saudi Arabia has been delaying or blocking money transfers to accounts in the United Arab Emirates.
- These payment issues have been occurring since mid-May.
- Saudi Arabia's central bank has denied imposing any direct restrictions on specific countries.
- The two Gulf nations have existing political disagreements concerning Israel, regional influence, and support for separatist movements.
- Bilateral trade between Saudi Arabia and the UAE exceeds $20 billion annually.
Saudi Arabia has reportedly begun delaying or blocking money transfers to accounts in the United Arab Emirates, sparking concerns about escalating political tensions and their impact on trade between the two Gulf nations. Several sources told the Financial Times that payments from Saudi banks to UAE-based companies and individuals have been returned or held up since May, often without clear explanation.
A Western executive at a Dubai-based healthcare company confirmed that their Saudi clients' payments had been blocked since mid-May. However, Saudi Arabia's central bank has denied imposing any direct restrictions on specific countries.
The dispute underscores existing political friction between the two Arab world's largest economies, which have traditionally been seen as allies but harbor several points of contention. These include differing stances on Israel, the UAE's backing of separatist movements in Somalia and Yemen, and Saudi Arabia's push for companies to relocate operations within the kingdom. Bilateral trade between the two nations exceeds $20 billion annually.
Experts note that economic competition is not new, and such measures have been deployed during previous periods of tension. The recent Israeli-US war on Iran had temporarily masked these underlying divisions, with Gulf states aiming to present a united front. The UAE's earlier announcement of its departure from OPEC, a group effectively led by Saudi Arabia, was also viewed as a significant move impacting Riyadh.