Middle East’s evolving alliances continue to shift
26 December 2024

Within and without, alliances in the Middle East are in a state of flux.
The brittle tensions that pitted three Gulf states against Qatar, before the January 2021 Al-Ula Agreement found an amicable resolution, have given way to burgeoning rapprochement between the UAE and Qatar.
On the other hand, the UAE-Saudi rivalry has intensified in recent years, culminating in late March 2024 in Riyadh’s lodging of an official complaint at the UN General Assembly, rejecting the UAE’s designation of territory adjacent to the kingdom as a protected maritime area.
Differences over the two countries’ Opec strategies, and their approaches to regional conflicts – notably Yemen and Sudan – have also come to the fore.
Latterly, a de-escalation has helped to defuse those tensions. Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud and UAE President Sheikh Mohamed Bin Zayed Al-Nahyan have strived to improve relations, with a meeting between the two leaders in late May doing much to stem the fraying of a once-close relationship.
Thawing enmities
The bigger shift in regional relations involves Iran. The Gaza conflict, fanning out to Lebanon, has helped reframe Gulf states’ ties with Tehran.
This was evident in the landmark visit of Iranian Foreign Minister Abbas Araghchi to Bahrain in October for a meeting with King Hamad Bin Isa Al-Khalifa – the first such visit in 14 years.
With a reputation as the Gulf state most hostile to Iran, Bahrain’s recent diplomatic outreach to Tehran reflects its sense that talking to the enemy is better than isolation, in the context of the current heightened regional tensions.
The Chinese-orchestrated Saudi-Iran agreement of 2023 at least provides a template for Manama to follow.
Bahrain’s overtures to Iran also reflect a new security dynamic in the region.
With Iran-backed militias in Iraq showing themselves capable of dispatching missiles as far as Israel, some regional analysts say the Gulf states’ leaders are increasingly anxious that these Shia militias could just as easily target them.
In this sense, building relationships with the Islamic Republic is one way of ensuring that domestic territory is not targeted by Iranian proxy militias.
China is playing to the crowd. It … is looking to put a wedge between the US and the wider world, including Southeast Asia
Bill Hayton, Chatham House
Beijing’s broadening reach
The region has also found itself increasingly engaged east of the Suez.
China’s regional role remains a work in progress, with the Saudi-Iran agreement arising out of Beijing’s willingness to offer a non-Western alternative to conflict mediation.
From Riyadh’s point of view, China’s leverage with Iran, primarily through extensive trade and investment links, made it the ideal broker for an agreement that Saudi Arabia views as key to helping dial down the threat posed by Iran.
The backdrop to such Gulf engagements with the likes of Iran and China is the evident reluctance of the US to provide the blanket security guarantees to its regional allies that it once did.
This has incentivised the Gulf states to attempt diplomatic entreaties with regional adversaries, compelled by an understandable need for self-preservation.
This has wider significance, placing China in a more prominent role in influencing regional politics – a sharp contrast with its previous low-key strategy and one that China watchers such as Bill Hayton, Asia-Pacific associate fellow at the thinktank Chatham House, see as being driven by interests rather than by tactical power politics.
For Beijing at least, its involvement in 2023’s Saudi-Iran deal affords an opportunity to reinforce its regional influence, while demonstrating its support for the Palestinian cause – an issue that resonates with many across the region.
“China is playing to the crowd,” says Hayton. “It has decided that large parts of [the world] don’t like Israel and it is looking to put a wedge between the US and the wider world, including Southeast Asia.”
China is meanwhile looking to deepen relations beyond Iran.
Despite the evident importance it places on maintaining close relations with the Islamic Republic – most notably as the main buyer of the latter’s crude oil exports – China also sees value in building ties with Saudi Arabia.
The recent accession of Saudi Arabia, alongside the UAE, Egypt and Iran, to the Brics geopolitical bloc affords further means for China to expand its influence in the region.
From Saudi Arabia’s point of view, Brics membership could provide opportunities to broaden its engagement beyond the Western powers with which it has been allied for generations.
The Trump factor
Given that when Donald Trump resumes his occupancy of the Oval Office in late January the US is likely to take a maximum-pressure approach towards Iran once again, a more multipolar disposition could offer the Gulf states something of a hedge.
Saudi Arabia could equally find itself in a position to be a conduit between the wider region and the Trump White House.
With inbound Trump appointees including the fiercely pro-Israel Mike Huckabee as the proposed US ambassador to Israel, there is a concern that the White House could give a green light to Israel to annex the West Bank and embed its occupation of Gaza.
The region may then find itself counting on Riyadh’s clout in Washington to restrain Trump from pursuing positions that would only escalate regional tensions.
Between the likes of the EU, the UK and China looking to revive relations with Saudi Arabia, and Russia still being a partner in the Opec+ group, the Saudi leadership may find itself the centre of regional attention in 2025.
Exclusive from Meed
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Dubai’s RTA opens Hessa Street upgrade20 April 2026
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Saudi Arabia’s Misk tenders residential package17 April 2026
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The contract was awarded to local firm Al-Nasr Contracting Company.
The scope covers the construction of roads, water networks, electrical and telecommunications networks, drainage and sewerage systems, and integration with the district cooling plant network at Island A.
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Newly formed chemicals giant Borouge Group International AG (Borouge International) has appointed Patrick Jany as chief financial officer (CFO). He will take office from 1 May, until which time Daniel Turnheim will continue to serve as interim CFO.
Jany joins Borouge International with more than three decades of international finance leadership across industrial, logistics and chemical businesses. “With 20 years’ CFO experience in publicly listed companies, he brings deep financial expertise and a disciplined approach to capital management,” Borouge International said in a statement.
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“As CFO, he will be part of a strong management team, leading and shaping Borouge International into a global industrial leader with scale, reach and financial discipline, supporting its long-term growth ambitions,” the company said in its statement.
Chemicals giant
Abu Dhabi National Oil Company’s (Adnoc Group) overseas investment arm XRG and Austrian energy major OMV completed the creation of Borouge International, a global chemicals giant with the fourth-largest polyolefins production capacity in the world, on 31 March.
The new entity was formed by the merger of Adnoc Group and OMV’s respective shareholdings in Abu Dhabi chemicals producer Borouge and Austria-based Borealis, as well as the acquisition of Canada-based Nova Chemicals.
Adnoc and OMV started the transaction to merge their interests in Borouge and Borealis, as well as acquire Nova Chemicals, in March last year. In July, Adnoc announced it would transfer its stake in Borouge International to XRG upon completion of the transaction.
Borouge International is headquartered and tax-domiciled in Austria, with regional headquarters in Abu Dhabi, UAE. The new company will operate corporate hubs across North America, Europe and Asia, with innovation centres in the UAE, Austria, Canada, Finland and Sweden.
Financial prospects
Borouge International will benefit from a superior resilient margin profile and well over $500m in identified earnings before interest, taxes, depreciation, and amortisation (ebitda) run-rate synergies per annum, with 75% expected to be realised within the first three years, XRG said at the time of creation of the entity.
“The company’s global reach, combined with long-term shareholders and a robust capital structure, will deliver resilience throughout the business cycle and an enhanced ability to drive consistent performance and sustainable value for shareholders,” XRG said in its statement.
The new company has also secured credit ratings of A (Negative) / Baa1 (Stable) / A- (Stable) ratings from S&P, Moody’s and Fitch, respectively, “confirming its robust financial position and capital structure and ability to access a range of long-term financing options”.
“XRG and OMV are committed to maintaining investment-grade credit ratings for Borouge International,” they said.
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The tender offer is expected to take place in 2027, subject to market conditions and approval by the UAE Capital Market Authority, with its timing “aligning with the new company’s future equity raise, to maximise value for all shareholders”.
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Dubai’s RTA opens Hessa Street upgrade20 April 2026
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Kuwait LNG project expected to be worth about $200m20 April 2026

The planned Kuwaiti project to develop a reliquefaction unit at the Al-Zour LNG import terminal is expected to be worth about $200m, according to industry sources.
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Saudi Arabia’s Misk tenders residential package17 April 2026

Saudi Arabia’s Mohammed Bin Salman Foundation (Misk Foundation) has floated two tenders for the construction of a residential community in District 5 of Prince Mohammed Bin Salman Nonprofit City in Riyadh.
The first tender is split into two packages, one that covers the construction of 237 villas and the other covering 223.
The second tender covers the construction of a community centre, swimming pool, mosque and school.
The bid submission deadline for both tenders is 27 April.
Misk Foundation is jointly developing the project in collaboration with local real estate developer Kinan.
The estimated SR900m ($240m) project will span an area of about 121,692 square metres.
In March 2022, the Misk Foundation released the masterplan for Prince Mohammed Bin Salman Nonprofit City.
Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud said in November 2021 that the Misk Foundation development in Riyadh will be the world’s first non-profit city.
“Prince Mohammed Bin Salman Nonprofit City, which implements the digital twin model, will host academies; colleges; Misk schools; a conference centre; a science museum; and a creative centre offering a space to support the ambitions of innovators in sciences and new-generation technology, such as AI [artificial intelligence], IoT [Internet of Things] and robotics,” he said.
“It will also feature an arts academy and art gallery, a performing arts theatre, a play area, a cooking academy and an integrated residential complex.
“In addition, the city will host venture capital firms and investors to support and incubate innovative enterprises to drive community contributions from around the world.”
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