What Does Saudi-Iranian Détente Mean for the UAE’s Regional Ambitions

On March 10, 2023, Saudi and Iranian senior officials announced that they had achieved an agreement to restore diplomatic relations following months of mediation by China, a shared economic partner. Among other commitments, the deal obliges the two perennial rivals to reopen their respective embassies within two months and engage in joint efforts to de-escalate regional tensions. The other Arab Gulf countries have welcomed the agreement as a chance to see the broader Middle East enter a phase of lasting stability.

Although most regional actors regard any progress toward regional de-confliction favorably and recognize some critical sectors—such as the security of energy infrastructure and commercial waterways—as a collective interest, each actor has its specific reasons to pursue appeasement instead of head-on confrontation with Iran. Tellingly, Riyadh is not alone in extending an olive branch to Tehran. The United Arab Emirates (UAE), which has also suffered poor historical relations with the Islamic Republic, has sought to mend fences with its quarrelsome neighbor since early 2021.

The UAE-Iran Rapprochement in Perspective

In 2016, when Iranian demonstrators looted the Saudi embassy in Tehran in protest of the execution of the Saudi Shia cleric Nimr al-Nimr, the UAE downgraded its diplomatic ties with Iran and recalled its ambassador to signal its solidarity with Saudi Arabia.

Bilateral tensions between Tehran and Abu Dhabi reached their peak when four tankers off the coasts of Fujairah were targeted by a series of unexplained bombings, allegedly from Iranian limpet mines, in May 2019. As Emirati concerns about the quickly deteriorating maritime security environment grew, Abu Dhabi decided that it was time to reach out to Iran. Talks followed suit between the top naval officials of the two countries. In October 2019, the UAE’s national security adviser Sheikh Tahnoon bin Zayed Al Nahyan secretly flew to Tehran, underscoring the gravity of the situation for Abu Dhabi.

The UAE-Iran dialogue became significantly more public in late 2021. First, Dr. Anwar Gargash, a senior diplomatic adviser to UAE President Mohamed bin Zayed (MBZ), and Khalifa Shaheen Al Marar, Emirati Minister of State, met with Ali Bagheri Kani, the Iranian Deputy Foreign Minister for Political Affairs, in Dubai to explore ways to enhance “relations based on good neighborliness and mutual respect.” Shortly after the initial meeting, Sheikh Tahnoon bin Zayed made a second trip to Iran, where he sat down with the secretary of Iran’s Supreme National Security Council, Ali Shamkhani, and Iranian President Ibrahim Raisi to explore prospects of consolidating bilateral ties and solutions to mutual regional concerns.

Following several high-profile Houthi drone attacks on Abu Dhabi in the early weeks of 2022, public engagement between the two sides dried up, if only for a short while. De-escalation talks soon continued and visits resumed, with the Iranian Foreign Minister Hossein Amir-Abdollahian flying to Abu Dhabi to pay his respects to late UAE President Sheikh Khalifa bin Zayed Al Nahyan in mid-May 2022. Ultimately, Abu Dhabi announced that it would restore full diplomatic ties with the Islamic Republic and return its ambassador, Saif Mohammed Al Zaabi, to Tehran starting in late August 2022.

New Scenarios

The UAE was among the first countries to praise Saudi Arabia’s decision to normalize diplomatic relations with Iran, with Emirati Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan congratulating his Saudi counterpart Prince Faisal bin Farhan bin Abdullah in a phone call. The two-year-long backchannel diplomacy between Saudi Arabia and Iran finally delivered results. At the same time, regional states must contend with this new international environment, for it brings opportunities and risks of its own.

On the one hand, easing Saudi-Iran tensions is clearly positive news for the region. The two major powerhouses in the Gulf have signaled their intent to pursue dialogue to address sticking points in their relationship, opening a window of opportunity to resolve their countless disputes. The normalization deal may lay a solid foundation for long-sought stability and catalyze broader intra-regional engagement and economic growth. As the last summit of the Baghdad Conference on Cooperation and Partnership highlighted, regional countries share a growing consensus that economic cooperation will help drive regional rapprochement. The UAE will benefit from this relaxed atmosphere and may contribute to the positive momentum by investing in infrastructure projects, supporting energy transition initiatives, and backing reconstruction efforts throughout the region.

On the other hand, emboldened by its successful negotiations with Iran, Saudi Arabia may feel empowered to pursue its ambitions for regional leadership more directly. Historically, Saudi Arabia has sought to bear the mantle of leadership of the Islamic and Arab worlds. Brandishing its extreme wealth and its stewardship of Mecca and Medina, Riyadh may make a strong case. Its deal with Iran may grant Saudi Arabia the confidence necessary to vie for a more assertive position within the Gulf Cooperation Council (GCC). Despite its small geography, the UAE has constantly refused to play the role of “junior partner” to Riyadh. Nor  does the UAE see itself as a second-tier regional power. Thanks to its own political clout and financial might, Abu Dhabi is in a position to negotiate on equal footing with most geopolitical actors. Consequently, although the deal with Iran might have reinvigorated Saudi Arabia’s desire to lead, it is unlikely that the UAE will settle for a marginal role in the region’s politics.

Emirati-Iranian Messaging

On March 16, less than a week after the Saudis and Iranians shook hands in Beijing, senior Iranian officials visited the UAE. The mission included Ali Shamkhani, a top national security official, and Mohammad-Reza Farzin, the head of Iran’s central bank. The Iranian delegation’s composition speaks volumes about the priorities driving the talks between the UAE and Iran, with conflict mitigation and financial cooperation heading the bill.

Amid growing concerns about Israeli strikes on Iran, Tehran seeks assurances that Emirati leaders will not allow the country’s territory to be used as a launchpad against Iran’s nuclear and military facilities. Iranian officials have also insisted that UAE-Israel defense cooperation and intelligence sharing, brought into the open after the “Abraham Accords” of September 2020, remain at non-threatening levels. For its part, the UAE has sought guarantees that Iran’s ballistic missile and nuclear programs will not threaten the Emirati position as a secure global trade hub.

Fortunately for Tehran, the UAE has signaled on several occasions that it does not want to be dragged into an Iran-Israel shadow war. For example, when rumors began swirling about a loosely-defined missile defense alliance sponsored by the U.S. that would include the GCC monarchies, Egypt, Jordan, and Israel, Abu Dhabi remained reluctant to join the blatantly anti-Iran coalition. More recently, the Emirati ambassador to Tehran gave assurances to Iranian officials that the UAE would not allow any country to use its territory to carry out activities against Iran. Although Abu Dhabi has put defense cooperation with Tel Aviv on the back burner, the UAE may reverse that policy if it believes Iran will renege on its security commitments.

On the economic front, where national interests are more easily aligned, the two countries are making significant headway. Although Iran’s economy has suffered from years of crippling sanctions, growing international pressure and mounting domestic unrest have created a dangerous mix for the Islamic Republic’s leadership. In order to buoy its weakened economy, Iran must build its foreign currency reserves, unblock its frozen financial assets abroad, and—most importantly—access new markets for its hydrocarbon exports. As a globally interconnected financial hub and major re-export destination with a growing community of Iranian expats, the UAE is well-positioned to support Iran’s endeavor to ease its economic isolation. Tellingly, the UAE has already played a significant role in helping Iran circumvent U.S. sanctions on its oil exports over the past years. Recent figures display a positive trend in the UAE-Iran trade, with the UAE standing out as Iran’s top trade partner in the Gulf region with bilateral trade values reaching over $19.7 billion between March 2022 and January 2023.

Shamkhani’s visit to Abu Dhabi and Dubai shortly after the Saudi-Iranian deal signals to the UAE that Iran’s agreement with Riyadh does not alter the relationship between the two countries. Tehran continues to attach weight to Emirati concerns and considers Abu Dhabi a key interlocutor in geopolitical disputes central to its interests. The Syrian case exemplifies the UAE’s utility for the Iranians.. The survival of Syrian President Bashar Al Assad’s regime is vital to Iran’s strategic calculations and power projection capability in the Levant.

Aside from Oman, the UAE is the only GCC country to have openly engaged with the Assad regime and championed Arab countries normalization of relations with Damascus over the past years. President Bashar’s visit to Abu Dhabi on March 19, the second trip to the Emirate since 2022, underscores the friendly ties between the two leaderships. With the next Arab League summit due in May 2024, Abu Dhabi is expected to spearhead efforts to admit Damascus back into the Arab fold. Recent reports about Saudi Arabia’s intention to mend fences with Assad and invite him at the next Arab leaders summit highlight Riyadh’s willingness to covet a key role in Assad’s rehabilitation. Although the UAE claims that its outreach to Syria primarily aims at distancing Damascus from Iran, it also provides a crucial diplomatic lifeline to the internationally sanctioned Assad rule and legitimize the Syrian regime, Iran’s long-term core goals too. Therefore, as long as the UAE plays an active role in maintaining the Assad regime in power, Iran will have an added value from keeping constructive communication channels with Abu Dhabi open despite their differing agendas.

Regardless of whether the Saudi-Iran rapprochement deal survives, the UAE will continue to leverage its unique geopolitical position to secure its agency. By carefully threading its diplomatic posture between opposing forces in the Gulf, it can maximize its strategic interests. Regarding potential tensions with Saudi Arabia, previous examples suggest that the UAE would refrain from openly criticizing Riyadh, choosing instead to smooth out tensions as they arise. Although preserving its long-lasting partnership with the Saudis is key to the UAE’s national security, maintaining maneuverability and the ability to conduct an independent foreign policy comes first.

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