meed-logo

line1 line2 line3
SIGN IN / REGISTER

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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11898933/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Saudi Arabia battery storage awards provide fresh lift

    24 August 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The latest battery storage awards provide a welcome injection of investment into Saudi Arabia’s power market, which has seen a sharp slowdown in contract awards this year.

    Saudi Power Procurement Company’s four Group 1 storage service agreements, announced last week, are worth more than $1.16bn and cover 2,000MW of capacity.

    That is significant against the wider market. According to regional project tracker MEED Projects, Saudi Arabia recorded $19.7bn in power sector contract awards in the first seven months of 2025, compared with just $2.5bn in new awards in the same period this year.

    The battery energy storage system (bess) awards therefore account for a sizeable share of the activity recorded so far this year and provide a much-needed source of new contracting activity.

    Importantly, this is not a one-off. SPPC issued the request for proposal (RFP) for its second group of bess projects in July, covering six projects with a combined capacity of 3,000MW and 12,000MWh.

    With the Group 1 tender taking around 18 months from RFP to contract award, it is reasonable to expect Group 2 contracts to be signed in 2027.

    At the same time, the awards for six independent renewable plants under Round 7 of Saudi Arabia’s National Renewable Energy Programme (NREP), with a combined capacity of 5,300MW, are also likely to move into next year, with the latest bid deadlines now extending into September.

    Although a substantial pipeline remains in procurement, it is only once these projects move from tender to award and into construction that this pipeline translates into market activity.

    It is important that these tenders continue to progress at the pace established by the early rounds of Saudi Arabia’s renewable energy programme and now also SPPC’s independent storage provider bess scheme.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962923/main.jpg
    Mark Dowdall
  • Qatar receives bids for major power grid expansion

    24 August 2026

     

    Qatar General Electricity & Water Corporation (Kahramaa) has received bids for several packages under a major power transmission expansion project tendered in April.

    The project covers new substations at multiple voltage levels, as well as the supply and installation of 400kV extra-high-voltage power cables. The overall scheme is estimated to cost $650m.

    It is being tendered as part of Kahramaa’s 2026 procurement plan, which includes 198 tenders with a total estimated value of QR21.4bn ($5.9bn).

    According to sources, bids were submitted for the following packages on 20 August:

    • Substation packages S1 and S2, covering new 132/11kV substations (estimated cost: $200m)
    • Package S3, covering new 66/11kV substations ($50m)
    • Package S4, including a new 400/220/132kV substation, as well as upgrades and modifications to existing 400kV and 220kV substations ($200m)
    • Package S5, covering new 132/11kV substations and upgrades to existing 132kV and 66kV substations ($100m)
    • Cable packages C1 and C2, covering 400kV cables ($100m)

    Kahramaa previously stated that foreign companies not registered in Qatar would be allowed to participate in the bidding, subject to meeting specified conditions, including registration and certification requirements.

    In June, the electricity and water utility awarded contracts worth more than QR2.2bn ($604m) to expand the electricity transmission network in the country’s western region.

    The engineering, procurement and construction (EPC) works will support the integration of the 2GW Dukhan solar power project into Qatar’s national electricity grid. The scope includes new and upgraded substations, as well as the installation of underground cables and overhead transmission lines.

    Kahramaa said contracts were awarded to local firm Voltage Engineering, Turkiye’s Best & Betas Consortium, India’s Larsen & Toubro and South Korea’s LS Cable.

    Of Kahramaa’s 2026 procurement plan, electricity transmission projects account for QR8.9bn ($2.4bn) and include the construction of new 400/132kV substations in Al-Wukair and Al-Mashaf, as well as the expansion of 400kV substations at Ras Laffan.

    These also cover the installation of 132kV underground cables between Al-Sailiya and Al-Rayyan over a 24-kilometre route, as well as upgrades to the 400kV and 220kV networks.

    Additionally, there are 64 planned electricity distribution projects managed by the Electricity Distribution Department that cover the medium-voltage and low-voltage networks throughout Doha and the regional municipalities. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962223/main.jpg
    Mark Dowdall
  • Maaden closes $1bn term loan and credit facility

    24 August 2026

    Saudi Arabian Mining Company (Maaden) has announced the closing of its inaugural international syndicated term loan and revolving credit facilities, worth a total of $1bn.

    The $500m international term loan facility will support Maaden’s growth agenda and general corporate purposes, including funding growth projects across its portfolio.

    The $500m international revolving credit facility, which is expected to remain undrawn, provides additional committed funding capacity “as Maaden continues to scale its business and execute its long-term growth strategy”.

    The transaction “was met with strong support from the international banking market, attracting participation from a diverse group of leading international banks across key global financial markets”, including the US, Canada, Europe, China and Japan. The facilities were oversubscribed, Maaden said.

    ALSO READ: Maaden and Aramco sign deal to create joint venture

    “The level of demand reflects the global banking community’s confidence in Maaden’s financial strength, strategic direction and ambitious growth plans,” the Saudi state miner said in its statement.

    “The facilities mark another significant milestone in Maaden’s funding journey – further diversifying its sources of funding and broadening its access to global capital providers as the company continues to advance its long-term growth ambitions.

    “Maaden continues to make significant progress across its growth pipeline, expanding production, advancing major projects and accelerating exploration as it builds a world-class mining company at the heart of Saudi Arabia’s economic transformation.”

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962086/main4516.jpg
    Indrajit Sen
  • Dubai inflation slows to 5.3% in July

    24 August 2026

    Dubai’s annual inflation rate slowed to 5.3% in July, down from 5.7% in June, as a decline in transport costs eased pressure on consumer prices, according to Emirates NBD.

    The bank said the slowdown supported its view that price growth peaked at mid-year, and it expects inflation to continue easing through the rest of 2026. Monthly price growth slowed to 0.1% in July, from 0.4% in June, the weakest pace since February.

    Transport was the clearest sign of the moderation. Annual price growth in the category slowed to 11.9% in July, from 18.1% in June, as transport costs fell 3.7% over the month. Fuel and lubricant inflation eased to 24.1% year on year, from 48.3%, tracking a decline in local petrol prices.

    Petrol remains the main swing factor in the emirate’s inflation. Transport contributed 1.1 percentage points to headline inflation in July, down from 1.7 percentage points in June. Emirates NBD said the relief may prove temporary, with Super 98 petrol prices climbing 5.9% in August to leave them 33.8% higher than a year earlier. The bank expects headline inflation to edge higher in the August figures before easing again later in the year.

    The UAE deregulated petrol and diesel prices in 2015 and reviews them monthly against global prices, meaning changes in global fuel costs pass through to consumers quickly. Transport, which includes fuel, accounts for 9% of Dubai’s consumer price index basket.

    Housing remained the largest contributor to inflation even as its impulse faded. Housing and utilities, which account for about two-fifths of the basket, added 2.8 percentage points to headline inflation. Annual price growth in the category slowed to 7.0%, from 7.4% in January.

    Food inflation edged up to 7.8% year on year, from 7.6% in June, which the bank attributed to lingering supply-chain disruption from the regional conflict. Inflation in restaurants and hotels accelerated to 4.5% year on year, from 1.7% in June.

    Emirates NBD forecasts inflation of 2.9% by year-end but said risks to that projection were tilted to the upside, given lingering pressures in food and housing.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18961735/main1839.jpg
    Colin Foreman
  • Libya oil project on track for 2027 completion

    24 August 2026

     

    The project to develop a workers’ camp at Libya’s Erawin oil field is on track for completion next year, according to industry sources.

    The project, estimated to be worth about $50m, is being executed by the Libyan oil services company Al-Saraya Al-Hamara, headquartered in the city of Sebha.

    The Libyan company was awarded the contract in February 2025.

    The scope of the project includes:

    • Construction of an accommodation camp
    • Construction of the camp maintenance warehouse
    • Construction of the camp office
    • Construction of a fire brigade shelter
    • Construction of a kitchen and mess hall
    • Construction of a mosque
    • Construction of a laundry room
    • Construction of a clinic
    • Construction of parking facilities
    • Installation of a fire and gas system
    • Installation of a power generator
    • Construction of associated facilities

    The client on the project is Zallaf Libya Oil & Gas Exploration & Production Company.

    Zallaf Libya Oil & Gas Exploration & Production Company was established in Libya in 2013 and is wholly owned by Libya’s state-owned National Oil Corporation.

    The Erawin field development project is located about 800 kilometres south of Tripoli and 100km southwest of the El-Sharara field.

    Libya shipped its first cargo of crude from the Erawin oil field in November 2023.

    The shipment departed from Libya’s Zawiyah port and consisted of 600,000 barrels of crude.

    Australia-based Worley Parsons was appointed as the front-end engineering and design (feed) contractor for the early production facility project in 2019.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18953632/main.jpg
    Wil Crisp