Down, but not Out: Evaluating Russia’s Post-Invasion Record in the Gulf

During the first year of Russia’s full-scale invasion of Ukraine, the Gulf region remained a geopolitical battleground between Russia and the United States. Throughout 2022 and early 2023, the Kremlin sought to strengthen its burgeoning partnership with Iran, preserve its energy sector investments in Iraq, and ensure that the Gulf monarchies resisted U.S. pressure to cut their trade ties with Russia. For its part, the U.S. sought to constrain the scope of Russian engagement with Saudi Arabia and the UAE, ensure that Gulf monarchies did not abet Russia’s weaponization of energy, and further isolate Iran over its military support for Russia’s invasion of Ukraine.

As the conflict rages on, neither Russia nor the U.S. may claim a clear geopolitical victory in the Gulf. While Iran has drifted more firmly into Russia’s geopolitical orbit, Moscow’s hopes of securing large-scale investments and arms contracts with the GCC states have receded. At the same time, the U.S. is frustrated by some GCC states’ unwillingness to condemn Russia over the invasion. Indeed, the Gulf’s silence toward the war only adds to the United States’ apprehension about the mounting influence of its rivals in the region. These trends underscore that multipolarity in the Gulf is already a geopolitical reality, but the stick of U.S. secondary sanctions remains a potent limiting factor on the region’s embrace of Russia.

Preserving its Foothold

Russia’s post-invasion strategy towards the Gulf region hinges on two main calculations. First, Russia assumed that Gulf Cooperation Council (GCC) countries would continue to view Moscow as a valuable partner in an increasingly multipolar world order. Historical precedents, including the UAE and Oman’s diplomatic normalization with the Soviet Union during its war in Afghanistan and Russia’s successful compartmentalization of disagreements with Saudi Arabia over Chechnya and Syria, substantiated this view. Russia also assumed that it would be able to preserve its “friends with all, enemies of none, allies of none” approach to regional diplomacy, which allowed it to simultaneously court Saudi Arabia, the UAE, Iran, and Qatar without attracting controversy.

Thus far, Russia’s assumptions have held up, but with notable caveats. While the multipolar outlook of the GCC countries has encouraged them to engage with Russia, they remain hesitant to drastically strengthen their partnerships with Moscow. The UAE’s expansion of commercial ties with Russia, which included a 57% increase in non-oil trade and the establishment of 4,000 new Russian-owned businesses, underscored the resilience of Moscow’s economic footprint in the Gulf region. Other trends, however, present a more ambiguous picture. Aside from Saudi billionaire Alwaleed bin Talal’s $500 million investment in Russian energy companies as the war broke out, sovereign wealth funds across the Gulf have refrained from making new investments. While Russia claims that its military-technical cooperation with Saudi Arabia is growing, Rosoboronexport’s participation in the Riyadh and IDEX Abu Dhabi defense expositions produced no major contracts. Saudi Arabia and the UAE’s adherence to OPEC+ oil production cuts has been the GCC’s most striking act of defiance against U.S. hegemony—but that adherence is driven far more by self-interest than by solidarity with Moscow.

Notably, the expansion of Russia’s deepening economic cooperation with Iran and Russia’s procurement of Iranian UAVs has not derailed its partnerships with Tehran’s regional rivals. Aside from Saudi Foreign Minister Faisal bin Farhan’s oblique description of Iranian drones as an increasing danger that must be stopped, Saudi Arabia has not overtly pressured Russia over its use of Iranian UAVs against Ukrainian electrical grids. Despite Russia’s previous concerns that the sale of S-400 air defense or Su-35 fighter jets to Iran could be perceived as red lines for the GCC, Moscow’s alleged arms sale negotiations with Tehran have not provoked backlash in Riyadh or Abu Dhabi. Nevertheless, the Kremlin’s flagrant violation of state sovereignty in Ukraine has undermined its credibility as a constructive contributor to regional security. Russia’s November 2022 offer to mediate between Saudi Arabia and Iran was ignored, and Moscow’s shadow diplomacy in Yemen has been reduced to Oman-brokered talks with the Houthis.

The U.S. Responds

In the wake of the Ukraine war, the U.S. has used moral suasion, co-option, and the threat of secondary sanctions to limit the scope of Russia’s influence in the Gulf region. In tandem with their European partners, U.S. officials have urged their Gulf partners to refrain from oil supply cuts that would provide Russia with valuable hard currency. In March 2022, the U.S. gave Saudi Arabia Patriot missile batteries to counter Riyadh’s narrative that Houthi drone strikes threatened global oil supplies. Of course, these overtures were undercut by Saudi Arabia and Russia’s joint pledge to cut 2 million barrels of oil per day of production in October 2022. Senate Majority Leader Chuck Schumer fumed that Saudi Arabia’s actions would “help Putin continue to wage his despicable, vicious war against Ukraine” and would be remembered by the United States, but these castigations have not convinced Saudi Arabia to moderate its position.

Washington’s threats of secondary sanctions have yielded more successful results than direct pressure. Russia’s energy investments in Iraqi Kurdistan were undermined by payment challenges, and Rosneft was ultimately forced to stop selling Kirkuk blend crude oil. The EU’s inclusion of seven Iranian entities, which had provided military aid to Russia, in its February 15 sanctions package was another noteworthy success in the West’s attempt to curtail Moscow’s economic influence. The specter of secondary sanctions has also inspired noteworthy concessions from the UAE; Mashreqbank suspended loans to Russian banks and Abu Dhabi remains reluctant to fully embrace Russia’s Mir credit card system. The expansion of GCC investment elsewhere in the post-Soviet space, such as the UAE’s free trade negotiations with Ukraine and $900 million investment plans in Kazakhstan, suggest that secondary sanctions are steering GCC countries away from the Russian market.

In spite of these accomplishments, the U.S. is undoubtedly frustrated with its inability to prevent the UAE from aiding Russia’s sanction evasion activities. The UAE’s export of microchips to Russia grew 1500%  year on year in 2022, and its sale of 158 drones to Russia worth $600,000 exposed a glaring gap in the sanctions regime. It remains unclear whether entreaties from U.S. officials, such as Undersecretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson during his recent visit to the UAE, or punitive actions, such as joint U.S.-British sanctions on UAE-licensed Russian bank MTS, will reverse this trend.

Throughout the second year of the Ukraine War, the trends described above are likely to persist. GCC countries are likely to leverage their multipolar outlook to contribute to conflict mediation. The stagnant JCPOA negotiations will likely bring Iran further into Russia’s orbit, while Iraq’s food insecurity challenges and energy export opportunities will force it to continue to thread the needle between Washington and Moscow. This will create risks and opportunities for both the U.S. and Russia, but leave neither completely satisfied with the geopolitical situation in the Gulf.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.