Gaza conflict tests UAE-Israel ties
13 June 2024
The stance of the UAE towards Israel has cooled dramatically in the past eight months amid the conflict in Gaza, which is proving to be a major test of the partnership built between Abu Dhabi and Tel Aviv.
From boasting of warm and open trade dealings, the UAE has gone quiet on its business deals with Israeli partners, while on a political and diplomatic level the humanitarian tragedy in Gaza has increasingly drawn condemnatory statements from UAE officials.
It is a twist in developments that neither country could have foreseen, as nor indeed had Saudi Arabia, which was nearing its own normalisation agreement with Israel. It has also taken a bilateral strategic partnership that was long in the making into uncertain territory.
Long-term partnership
The 2020 Abraham Accords that normalised relations between the UAE and Israel came at the tail end of at least a decade’s worth of interaction between the two countries. The agreement emerged first and foremost as a set of shared strategic interests in opposition to regional threats in the early 2010s.
In a very tangible interaction in 2016, pilots from the UAE and Israel for the first time participated together in aerial combat training exercises hosted by the United States Air Force (USAF) in Nevada.
The UAE’s relationship with Israel also intersects with its relationship with the US, including its hope of securing access to advanced US military technology and assets, such as the F-35 Stealth Fighter Jet.
In September 2020, UAE foreign ministry spokesperson Hend Al-Otaiba stated that a request for the F-35 had been made six years previously, and that, “given that the UAE intends to be a partner to Israel, and already has a deep strategic partnership with the US, we are hopeful the request will be granted”.
While the sale of the F-35 by the US to the UAE has yet to materialise, relations between the UAE and Israel have nonetheless thrived on their own since the accords, on the basis of ongoing shared security interests and the opportunities for business, trade and investment between the two countries.
Since 2020, the value of trade between the UAE and Israel has swollen to about $3bn annually, and defence ties have only strengthened. In 2022, Israel supplied the UAE with air defence systems following long-range attacks on the UAE's oil infrastructure by the Iran-aligned Houthi movement in Yemen.
Israel-Palestine problems
It was as early as June 2023, however, that US Secretary of State Antony Blinken first warned that rising tensions in Palestine and Israel’s actions in the West Bank could imperil the process of normalisation.
With the advent of the war in Gaza, those fears of a damaging escalation in tensions have been realised.
As the conflict erupted in October, the UAE kept its distance and restricted itself to only the most limited commentary, condemning the “serious and grave escalation” by Hamas-led militants while calling for the full protection of all civilians under international humanitarian law.
By November, as the violence in Gaza ratcheted up, Abu Dhabi similarly affirmed its commitment to the accords even as individual UAE officials publicly condemned Israel’s actions and called for an end to the violence, pushing for a ceasefire, humanitarian aid and the release of hostages.
Anwar Gargash, a diplomatic adviser to the president, labelled the conflict a “profound setback” for the region, and stressed that the tragic course of events should lead to a political re-engagement on the issues of realising a two-state solution with East Jerusalem as its capital.
The close working relationship between the UAE and Israel nevertheless continued, as evidenced by Israel’s acquiescence to Abu Dhabi’s humanitarian efforts in Gaza, which have included the UAE setting up a field hospital and performing aerial aid drops in the territory.
The long grind of the conflict and the increasing inflexibility and intransigence on ceasefire negotiations by Israeli Prime Minister Benjamin Netanyahu have nevertheless steadily eroded this early good will.
While in early January, Gargash affirmed that the normalisation agreement was “a strategic decision, and strategic decisions are long-term”, by late January, senior UAE officials were ringing alarm bells.
Four months on, speaking at the Arab Media Forum in Dubai in late May, Gargash lambasted the conflict in Gaza as having taken on “brutal and inhuman dimensions”, stating that the “heinous attack in Gaza and Rafah cannot be overlooked” – a far more critical tone than his earlier conciliatory speech.
Unreliable partner
On the international stage, the disinclination of the Israeli government to listen to any of its key allies or partners has been trying for all, including the US. For Israel’s normalised partners in the Middle East, the conflict has underscored the tension between the Abraham Accords and underlying regional sentiments.
The UAE’s own founding father, Sheikh Zayed, was an ardent personal supporter of the Palestinian cause, and under his watch, the UAE was one of the first states to recognise Palestine as an independent state.
In the present, the humanitarian catastrophe in Gaza is drawing the competing influences of the UAE’s contemporary strategic interests and underlying sympathy for the Palestinian people into stark relief, and it is having a chilling effect on relations.
Public announcements in the UAE of deals with Israeli companies, which abounded before the conflict, have evaporated, and at least one very public deal has been put on hold amid the uncertainty.
Abu Dhabi National Oil Company (Adnoc) had been due to take a $2bn stake, alongside the UK’s BP, in Israeli gas producer NewMed, which holds 45% of Israel’s Leviathan offshore gas field.
In mid-May, Netanyahu suggested that the UAE could be involved in the governance of Gaza – drawing a swift rejection from UAE Foreign Minister Sheikh Abdullah Bin Zayed Al-Nahyan, who stated: “The UAE refuses to be drawn into any plan aimed at providing cover for the Israeli presence in the Gaza Strip.”
The episode was a stark demonstration of the breakdown in communication and diplomatic alignment between Abu Dhabi and Tel Aviv, and it joins a wider pattern of reports that UAE officials are already looking beyond Netanyahu and cultivating relations with his potential successors.
On 5 June, the UAE’s foreign minister again condemned the Israeli government after it allowed the divisive annual ‘Flag March’ of Israeli settlers through Jerusalem’s old city, as well as settler activism in the Al-Aqsa Mosque compound, despite the extraordinarily heightened tensions over Gaza.
For UAE-Israel ties to thrive, Abu Dhabi needs a government partner in Tel Aviv that it can work with on a productive basis to safeguard interests between the two countries while avoiding diplomatic affronts.
Unfortunately for the UAE, the current Israeli government – with the far-right ministers that Netanyahu has brought into the cabinet – has had a habit of proving itself to be the very antithesis of such a partner.
Looking ahead, it could be a long road for UAE-Israel ties to return to resembling their halcyon state of 2021-22, and it will take a government in Israel under someone other than Netanyahu to get there.
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In a statement on the Dubai Financial Market on 11 June, Emaar Properties said it “stands on the threshold of a historic announcement” and revealed more details about the project. It said it will have a total development value of AED200bn, with a gross floor area exceeding 4.5 million square metres.
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Aramco awards contract for Uthmaniyah gas compression project
12 June 2026
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Saudi Aramco has awarded a key contract as part of its larger project to boost gas compression capacity at the Shedgum and Uthmaniya processing plants in the kingdom’s Eastern Province.
The Shedgum and Uthmaniya plants currently receive approximately 870 million cubic feet a day (cf/d) and 1.2 billion cf/d of Khuff raw gas, respectively. Through this multibillion-dollar project, Aramco aims to increase the compression and processing capacity of the two plants, as well as construct new pipelines to enhance gas transport.
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Shedgum and Uthmaniyah gas compression project
The contract awarded by Aramco for the Uthmaniyah gas compression plant is one of nine EPC packages comprising the overall Shedgum and Uthmaniyah gas compression project. The list of packages is as follows:
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Aramco has awarded the contract for the Shedgum and Uthmaniyah early works site preparation (package 6) to local firm Al-Shalawi International Company Trading and Contracting, sources told MEED.
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Contractors submitted bids for packages of the Shedgum and Uthmaniya gas compression capacity expansion project in January, MEED previously reported.
The Saudi energy giant is understood to have started the solicitation of interest process for the main EPC contract tendering exercise in the fourth quarter of 2024.
Aramco subsequently issued the tenders for the EPC packages of the scheme during the second quarter of last year and set an initial bid submission deadline of 17 August.
Aramco then extended the bid submission deadline to 17 November, 7 December, and then to January, according to sources.
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Uncertainty increases for Shell’s $3.9bn gas project in Iraq
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Due to the major disruption to shipping crude exports through the Strait of Hormuz, Iraq has had to dramatically reduce oil production in the Basra region, and, as a result, associated gas production has declined as well.
One source said: “Right now, the state-owned oil companies in Iraq are in the midst of a financial crisis and it is unlikely that they will be able to contribute to this project in the way that was originally envisioned.”
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PIF to work with Egypt’s TMG on Saudi real estate schemes
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The MoU also establishes a framework to attract additional investors to future project phases and is intended to expand private sector participation as investors, partners and suppliers.
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Oman signs $7.5bn of Duqm project deals
10 June 2026
Oman’s Public Authority for Special Economic Zones and Free Zones (Opaz) has signed 10 investment agreements and memorandums of cooperation worth RO2.9bn ($7.5bn) for projects in the Special Economic Zone at Duqm (SEZAD).
The agreements were signed on 8 June during an investment ceremony in Duqm, chaired by Opaz chairman Qais Bin Mohammed Al-Yousef.
The package includes a RO350m ($910m) agreement with Al-Sahil Power to develop the 890MW Duqm independent power project (IPP).
MEED reported in January that a consortium comprising Korea Western Power (Kowepo), Qatar’s Nebras Power, the UAE’s Etihad Water & Electricity (EtihadWE) and Oman’s Bhawan Infrastructure Services had signed a PPA for the Duqm IPP project.
The agreement appears to relate to the same project, suggesting that Al-Sahil Power has been established as a project company to execute the project.
The project will be developed under a long-term power-purchase arrangement with Nama Power & Water Procurement Company (NamaPWP).
A consortium of China-headquartered Shandong Electric Power Construction No. 3 Company (Sepco 3) and South Korea’s Doosan Enerbility was recently appointed as the main contractor on the combined-cycle gas turbine plant.
Commercial operations are scheduled to begin in 2029.
Green hydrogen project
The largest agreement signed includes a RO1.6bn ($4.2bn) agreement for the implementation of the second and third phases of Indian renewable energy company ACME Group’s green hydrogen project in Duqm.
Hydrom, Opaz and ACME previously signed project development and land usufruct agreements for the two phases in May 2025
The development will establish a green hydrogen and green ammonia production complex covering 10 square kilometres.
Each phase is expected to produce about 71,000 tonnes a year of green hydrogen and 400,000 tonnes a year of green ammonia.
Total production capacity will reach 142,000 tonnes of green hydrogen and 800,000 tonnes of green ammonia a year once both phases are completed.
The agreements also include a memorandum of cooperation with OQ Group for the development of a natural gas liquids (NGL) separation and processing plant in Duqm’s petrochemicals zone.
The proposed facility has an estimated investment value of RO288m ($750m). It will process natural gas liquids into propane, butane and heavier hydrocarbons for export and downstream industrial use.
Elsewhere, a Chinese investor signed an agreement to develop a silicon-based battery anode materials plant with an investment value of RO192.2m ($500m). The facility will produce materials used in lithium-ion batteries for electric vehicles.
Other agreements
Other agreements cover industrial, residential, tourism and manufacturing projects.
These include a RO30m residential development for Jindal Steel employees, a chemicals manufacturing plant by Duqm Chemical Industries, a steel fabrication facility by DSD Ferrometalco and a precast housing factory to be developed by Al-Qiyada Construction Technology.
Further memorandums were signed for a RO192.2m industrial complex promoted by Truot Holding and a RO184.5m tourism and commercial development by Ruby Investment & Development.
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