UAE’s Relations with Russia: Calculated Risk or Geopolitical Necessity?

In a move viewed as a calculated risk by several observers, the Emirati President Shaikh Mohammed bin Zayed, was recently hosted by Russia as the esteemed guest of honor at the St Petersburg International Economic Forum, Russia’s most significant economic gathering. According to Anwar Gargash, the diplomatic adviser to the UAE President, this visit is not just about diversifying diplomatic ties but also about fostering a broader perspective. Gargash emphasized, “[Emirati President] meets a lot of Western leaders, it is also important for him to hear from President Putin to be able also to support the international community’s collective effort, in order to go beyond the current polarization.” Further, Gargash alsto stated that, we are making an effort to hear all sides,” including maintaining open lines of communication with Moscow.” In today’s shifting geopolitical arena, the Emirati policy is either a “calculated risk,” or simply a realpolitik that’s prompting Abu Dhabi to keep all diplomatic channels open.

UAE’s Pragmatism

The foundations of the recent visit of Mohammed Bin Zayed and maintaining open dialogue with Russia arguably lies in a disappointment with the U.S.’s reaction to the Houthi drone attacks on Abu Dhabi in January 2022, which forced Abu Dhabi to diversify its foreign policy. The Ukraine war served as a convenient geopolitical opportunity to showcase a policy of diversifying contacts with all sides. This signifies yet another pivotal example of Abu Dhabi transitioning from its interventionist foreign policy, previously evident in Libya, Yemen, and Syria, towards assuming a more proactive role as an international mediator, particularly in Ukraine.

The ongoing war in Ukraine and the recent forum visit align perfectly with this narrative. A case in point is the UAE’s demonstrated willingness to act as a significant mediator in 2022 when it facilitated the release of American basketball player Brittney Griner in exchange for Russian arms dealer Victor Bout. The UAE also offered humanitarian assistance to Ukrainian when it sent in March 2023 an aircraft carrying 14 tonnes of relief aid. A UAE delegation also met President Zelensky on an official visit to Kyiv, led by the Minister of Climate Change and Environment, Mariam Al Mheiri. Coincidentally, on International Women’s Day, Ukraine’s First Lady met with the UAE’s President. These events illustrate Abu Dhabi’s open dialogue with all sides and humanitarian assistance to Kyiv.

Observers have expressed hope due to the statement by the UAE’s President indicating a willingness for his nation to take on a more prominent role in the crisis. Expert Andrew Korybko suggested that “if the US approves Ukraine holding ceasefire talks with Russia, then MBZ will likely be requested to mediate.” At the same time, the United States remains a key defense ally for both the UAE and Ukraine. The UAE currently accommodates 5,000 US troops at the Al Dhafra air base just outside Abu Dhabi. In simple terms, Abu Dhabi’s strategy of maintaining open communication with conflicting parties could boost its diplomatic stature on a global level—in the ongoing tension among Russia, the West, and Ukraine.

The UAE Prioritizes the Economy

The International Economic Forum in St. Petersburg serves as a stage for Russia to demonstrate its investment potential to partners, and it allows the UAE to highlight its economic prowess. The crux of the bilateral relations between these two nations lies in their mutually beneficial economic exchanges. Russia’s quest for new trading partners to substitute its severed connections with the West is evident in its growing trade with the UAE. This trade relationship saw a 68% increase in 2022, hitting a record high of $9 billion. Russian exports made up $8.5 billion, a dramatic 171% increase. This positive trend is also reflected at the regional level. For instance, in 2022, trade between Tatarstan and the UAE rose to $71 million.

Furthermore, Bashkortostan, another republic in the Volga region, has been actively trading with the UAE, with their trade turnover tripling in 2022. In one year only, Bashkir exports to the UAE increased 3.4 times, accounting for 94.1% of the total trade between the two. The imports from the UAE have also doubled within a year.

The United Arab Emirates (UAE) and Saudi Arabia are vital strategic players within OPEC+. Notably, OPEC+ has recently decided to cut production three time; once in October 2022 and again in April 2023, leading to the most recent reductions in June. From a Western perspective, these actions have been interpreted as helping Russia keeping oil price high to cover its costly war on Ukraine. Meanwhile, all the Gulf Cooperation Council (GCC) states saw their GDP rise, while energy deals took on heightened importance for Russia. Contrary to forecasts suggesting Western sanctions might reduce Russia’s economy by up to 15%, by early 2023, Russia’s real GDP was only 7-10% below what it might have been in the absence of sanctions. Consequently, Russia’s economic future hinges heavily on its oil and gas exports and its ability to discover new markets for exports, find new suppliers for critical imports, and decrease its dependency on the Western supply chain.

According to Russia’s Deputy Prime Minister, Alexander Novak, oil and gas industry revenues rose by 28% in 2022. This increase is attributed to higher global market prices, a 2% rise in Russian oil production, and a 7% surge in oil exports, despite the sanctions. In light of this, it is not surprising that the President of Ukraine reached out to the Arab League ahead of his trip to the G7 meeting that led to additional sanctions. This move highlights the economic might of the Arab nations, particularly the GCC countries, and the importance of Russia’s deals with OPEC+ for its economy and war efforts. The UAE, in particular, plays a pivotal role in this dynamic.

The UAE’s Relationship with Russia is a Calculated Risk

Recent shifts towards diplomatic normalization in the region, particularly between Saudi Arabia and Iran, are positive developments. A key topic at the “Russia-Islamic World” Group of Strategic Vision during the Kazan Summit—an influential economic platform for fostering relations with the GCC countries—was planning an international North-South transport corridor. This route connects several key cities, including Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, and Bandar Nazali. During the Kazan Summit, Russia’s Deputy Prime Minister Marat Khusnullin met the UAE’s Minister of State for Foreign Trade Thani Ahmed Al Zeyoudi. Their discussions included the potential development of the North-South project, suggesting the involvement of GCC countries in alternative trade pathways.

For Moscow, the UAE represents a critical ally in diversifying trading partners and navigating Western sanctions. The UAE is instrumental in sustaining favorable oil prices and strengthening Russia’s resistance to Western sanctions. Moreover, the geopolitical transformations signified by these alternate logistic, transportation, and connectivity options further underscore the UAE’s unique partnership with Moscow. In line with this, Mohammed Bin Zayed’s aspiration to host one million Russian tourists this year acknowledges Russia’s potential to contribute to diversifying the UAE’s economy.

In conclusion, whether the UAE’s relationship with Russia is a “calculated risk” or a geopolitical necessity remains to be seen. The future of this relationship will largely depend on the outcome of the war in Ukraine, internal issues faced by Russia, including a coup by the Wagner group, and the challenge of managing relations with Western partners. It is evident that Abu Dhabi is proactively seeking a mediating role in the crisis. If successful in helping to end the Ukraine war, the UAE stands to gain increased global recognition. Therefore, the UAE may be willing to place a strategic bet investing in facilitating much-needed peace.

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