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
-
UAE GDP projection corrects on conflict24 April 2026
-
April 2026: Data drives regional projects24 April 2026
-
Boutique Group tenders Tuwaiq Palace hotel in Riyadh24 April 2026
-
Firms announce 129MW Dubai data centre24 April 2026
-
Iraq signs upstream oil contract24 April 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
UAE GDP projection corrects on conflict24 April 2026

MEED’s May 2026 report on the UAE includes:
> COMMENT: Conflict tests UAE diversification
> GVT &: ECONOMY: UAE economy absorbs multi-sector shock
> BANKING: UAE banks ready to weather the storm
> ATTACKS: UAE counts energy infrastructure costs
> UPSTREAM: Adnoc builds long-term oil and gas production potential
> DOWNSTREAM: Adnoc Gas to rally UAE downstream project spending
> POWER: Large-scale IPPs drive UAE power market
> WATER: UAE water investment broadens beyond desalination
> CONSTRUCTION: War casts shadow over UAE construction boom
> TRANSPORT: UAE rail momentum grows as trade routes face strainTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16554417/main.gif -
April 2026: Data drives regional projects24 April 2026
Click here to download the PDF
Includes: Commodity tracker | Top 10 global contractors | Brent spot price | Construction output
MEED’s May 2026 report on the UAE includes:
> COMMENT: Conflict tests UAE diversification
> GVT &: ECONOMY: UAE economy absorbs multi-sector shock
> BANKING: UAE banks ready to weather the storm
> ATTACKS: UAE counts energy infrastructure costs
> UPSTREAM: Adnoc builds long-term oil and gas production potential
> DOWNSTREAM: Adnoc Gas to rally UAE downstream project spending
> POWER: Large-scale IPPs drive UAE power market
> WATER: UAE water investment broadens beyond desalination
> CONSTRUCTION: War casts shadow over UAE construction boom
> TRANSPORT: UAE rail momentum grows as trade routes face strainTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16553627/main.gif -
Boutique Group tenders Tuwaiq Palace hotel in Riyadh24 April 2026

Saudi Arabia’s Boutique Group, backed by the sovereign wealth vehicle Public Investment Fund (PIF), has retendered a contract to convert Tuwaiq Palace in Riyadh into a hotel.
Contractors have been given a deadline of 31 May to submit proposals.
The scheme comprises 40 hotel rooms and suites and 56 one- and two-bedroom villas.
According to regional projects tracker MEED Projects, the contract was first tendered in 2022.
In January of that year, Crown Prince Mohammed Bin Salman launched Boutique Group to manage and convert historic and cultural Saudi palaces into ultra-luxury hotels.
Boutique Group’s first phase covers three palaces, two of which are under construction. Al-Hamra Palace in Jeddah is being converted to include 33 suites and 44 villas. In July 2023, MEED reported that Jeddah-based Al-Redwan Contracting was appointed the main contractor for the Al-Hamra Palace conversion.
The other project is the Red Palace in Riyadh, which will feature 46 suites and 25 guest rooms. In 2023, local contractor Mobco won the contract to undertake the project.
In 1957, the Red Palace became the headquarters of the Council of Ministers for 30 years, and later served as the main office for the Board of Grievances until 2002.
Jordan-headquartered Dar Al-Omran is acting as supervision consultant on all three projects.
Photo credits: Omrania
MEED’s April 2026 report on Saudi Arabia includes:
> COMMENT: Risk accelerates Saudi spending shift
> GVT &: ECONOMY: Riyadh navigates a changed landscape
> BANKING: Testing times for Saudi banks
> UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
> DOWNSTREAM: Saudi downstream projects market enters lean period
> POWER: Wind power gathers pace in Saudi Arabia
> WATER: Sharakat plan signals next phase of Saudi water expansion
> CONSTRUCTION: Saudi construction enters a period of strategic readjustment
> TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure pushTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16549695/main.jpg -
Firms announce 129MW Dubai data centre24 April 2026
Dubai’s Integrated Economic Zones Authority (DIEZ) has signed a joint-venture agreement with Netherlands-headquartered data centre developer Volt to build a new artificial intelligence (AI)-ready data centre in the emirate.
Planned for Dubai Silicon Oasis, the development will take the form of a campus covering up to 60,000 square metres.
The project will be delivered in two phases, starting with 29MW of immediately available capacity, followed by a second phase adding a further 100MW of committed power.
Under the arrangement, DIEZ will supply the land and essential infrastructure, while Volt will finance and develop the project, lead construction, and manage the design, leasing, implementation and day-to-day operations.
French firm Schneider Electric, which has its regional headquarters in Dubai Silicon Oasis, will support the development by supplying advanced electrical systems, power distribution capabilities and smart data centre infrastructure.
The GCC currently has more than 174 active data centre projects, representing over $93bn in investment, led by international players such as AWS, Google and Huawei, alongside regional developers including Khazna and Moro, supported by government-led localisation strategies.
More than a dozen large-scale facilities valued at over $100m each are currently under tender, with further packages expected to reach the market over the next six to 12 months.
The UAE is one of the leading data centre markets, with hyperscale campuses, sovereign cloud initiatives and edge data centre deployments underway.
Data centre development is closely aligned with the UAE’s digital economy and AI roadmap, as well as the wider smart city programme.
Priorities include hyperscale and colocation facilities to support cloud service providers; edge data centres to reduce latency and enable 5G and IoT use cases; energy-efficient designs using advanced cooling, modular construction and renewables; and strategic partnerships between global hyperscalers, local developers and utilities.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16548972/main.JPG -
Iraq signs upstream oil contract24 April 2026
State-owned Iraqi Drilling Company (IDC) has signed a contract with China’s EBS Petroleum for a project to drill 17 horizontal wells in the southeastern portion of the East Baghdad field.
Mohamed Hantoush, the general manager of IDC, said the contract signing came after a “series of successful achievements” by the company at the field.
The achievements included the completion of a project to drill 27 horizontal wells and another project to drill 18 horizontal wells, according to a statement released by Iraq’s Ministry of Oil.
In January, Iraq’s Midland Oil Company (MOC), in collaboration with EBS Petroleum, completed the country’s longest horizontal oil well in the southern part of the East Baghdad field.
The well, which was called EBMK-8-1H, reached a total depth of 6,320 metres, and had a 3,535-metre horizontal section, making it the country’s largest horizontal well ever drilled.
Senior officials from the Iraqi Oil Ministry and representatives of EBS Petroleum attended the well’s completion ceremony.
EBS Petroleum is a subsidiary of China’s ZhenHua Oil, which is focused on Iraq.
ZhenHua Oil is the operator of the field and is working with Iraqi partners to oversee the field’s development.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16543675/main4942.jpg
