The Spillover of the Gulf Rift into Business: An Analysis of UAE Companies’ Withdrawal from the Saudi Defence Show
Abstract
The rift between the United Arab Emirates (UAE) and Saudi Arabia, two of the most influential oil-producing countries in the Gulf region, has been escalating in recent months. The tensions between the two nations have not only affected their diplomatic relations but have also started to spill over into the business sector. This paper examines the recent withdrawal of some UAE companies from the World Defence Show in Saudi Arabia, scheduled to take place in February 2026. The analysis provides insights into the implications of the Gulf rift on the business interests of the two countries and the potential consequences for the regional economy.
Introduction
The UAE and Saudi Arabia have historically been the pillars of regional security in the Gulf, with their economic and strategic interests closely intertwined. However, in recent years, the two countries have witnessed a divergence in their interests, particularly with regards to oil quotas and geopolitics. The tensions between the two nations have been simmering, with the UAE’s withdrawal of its forces from Yemen in 2025 being a significant turning point. The disagreement between the two countries has now started to affect their business interests, with some UAE companies pulling out of the World Defence Show in Saudi Arabia.
Background
The World Defence Show, scheduled to take place in Riyadh from February 8-12, 2026, is a significant event in the defence industry, with companies from around the world participating. The UAE has been a major participant in the show, with several companies showcasing their defence products and services. However, sources close to the matter have revealed that some UAE companies have withdrawn from the show, citing the escalating tensions between the two countries.
Causes of the Rift
x
Play Video
Now Playing
x
Play Video
AI-augmented content writing
Watch on
AI-augmented content writing
The rift between the UAE and Saudi Arabia can be attributed to several factors, including disagreements over oil quotas, geopolitics, and the ongoing conflict in Yemen. The UAE’s decision to withdraw its forces from Yemen in 2025 was seen as a significant blow to the Saudi-led coalition, which has been fighting against the Houthi rebels in the country. The tensions between the two countries have been further exacerbated by Saudi Arabia’s allegations that the UAE helped a leading Yemeni separatist figure escape through Somalia.
Implications for Business
The withdrawal of UAE companies from the World Defence Show in Saudi Arabia is a significant indicator of the spillover of the Gulf rift into the business sector. The move is likely to have far-reaching implications for the regional economy, with potential consequences for trade, investment, and economic cooperation between the two countries. The defence industry, in particular, is likely to be affected, as the UAE and Saudi Arabia have been significant players in the regional defence market.
Conclusion
The withdrawal of UAE companies from the World Defence Show in Saudi Arabia is a clear indication of the escalating tensions between the two countries and the potential consequences for their business interests. The Gulf rift has significant implications for the regional economy, and it is essential for policymakers and business leaders to address the underlying causes of the tensions and work towards finding a resolution. The paper highlights the need for further research into the impact of the Gulf rift on the business sector and the potential consequences for the regional economy.
Recommendations
Based on the analysis, the following recommendations are made:
Diplomatic Efforts: Diplomatic efforts should be made to resolve the underlying causes of the tensions between the UAE and Saudi Arabia, including disagreements over oil quotas and geopolitics.
Business Diplomacy: Business leaders and policymakers should engage in dialogue to address the concerns of UAE companies and find ways to mitigate the impact of the rift on the business sector.
Regional Cooperation: Regional cooperation and economic integration should be promoted to reduce the dependence of the regional economy on individual countries and mitigate the impact of the rift.
Diversification: Companies in the region should diversify their investments and partnerships to reduce their dependence on individual countries and mitigate the risks associated with the rift.
Future Research Directions
The paper highlights the need for further research into the impact of the Gulf rift on the business sector and the potential consequences for the regional economy. Future research directions could include:
Impact on Trade: An analysis of the impact of the rift on trade between the UAE and Saudi Arabia, including the potential consequences for the regional trade agreements.
Investment Patterns: A study of the investment patterns of UAE companies in Saudi Arabia and the potential consequences of the rift on investment flows.
Regional Economic Integration: An analysis of the potential for regional economic integration to mitigate the impact of the rift and promote economic cooperation between the UAE and Saudi Arabia.