meed-logo

line1 line2 line3
SIGN IN / REGISTER

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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13025007/main.gif
James Gavin

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

Click here to register
Exclusive from Meed
Related Articles
  • Iraq gas field project disrupted by regional conflict

    26 March 2026

     

    Register for MEED’s 14-day trial access 

    Progress on Iraq’s project to develop the strategically important Akkas gas field has been disrupted by security issues related to the US and Israel’s ongoing war with Iran, according to industry sources.

    Work activity at the project site has been significantly reduced due to security concerns, and the project is now expected to take longer to complete.

    Iraq held a ceremony in January this year to mark the restart of drilling operations at the site as part of the field development project.

    In July last year, Iraq’s Oil Ministry announced signing a contract with the US-based oil field services provider SLB to develop production at Iraq’s Akkas gas field.

    Under the terms of the deal, SLB will drill wells at the Akkas field, aiming to initially raise production to 100 million cubic feet a day (cf/d).

    Many of SLB’s non-Iraqi employees have now been evacuated from the country.

    Over the long term, Iraq is targeting gas production of 400 million cf/d from the field.

    The contract with SLB replaces a previous deal with Ukraine-based Ukrzemresurs, which has been terminated.

    It also covers the construction of surface infrastructure and pipelines to connect Akkas to central processing units.

    The gas produced at Akkas will be used to fuel the Anbar combined-cycle power plant, which is under construction by the Electricity Ministry.

    Akkas gas field development

    The Akkas gas field, located in Anbar province in western Iraq, has 5.6 trillion cubic feet of proven reserves. The field was discovered in 1992 and began production in 1993.

    Since then, Iraq’s plans to develop the Akkas gas field to its full potential have experienced several setbacks.

    In April last year, the Iraqi Oil Ministry signed an agreement with Ukrzemresurs to develop the field.

    At the time, the Oil Ministry said that the partners were aiming to produce 100 million cf/d in the first two years, as per the agreement, with output targeted to increase to 400 million cf/d within four years.

    Prior to Ukrzemresurs, South Korean company Kogas was responsible for developing the field.

    Rights to the field were originally awarded to a consortium of Kogas and Kazakhstan’s state-owned oil company KazMunaiGas (KMG) in the third licensing round, which was launched in October 2011.

    KMG pulled out, leaving Kogas as the sole investor and operator on new contract terms.

    When the deal with Ukrzemresurs was originally announced last year, it was negatively received by some Iraqi politicians, with the Oil and Gas Committee in Iraq’s parliament rejecting the contract signing.

    At the time, Ali Al-Mashkour, a member of the Oil and Gas Committee, told Iraq’s Shafaq News Agency: “This contract involves a great waste of Iraq’s wealth, and there will be a waste of Iraq’s oil, and this confirms that Iraq is once again failing to choose reputable companies to work with in the most important economic field in the country.”

    He added: “We will work to uncover and expose the suspicions in this contract during the next stage, especially since this contract was made by some representatives for specific interests, which we will reveal soon with evidence.”

    Plans to sign the contract to develop the Akkas gas field with a Ukrainian company were first announced by the Oil Ministry in September 2023, but Ukrzemresurs was not named at the time.

    Iraq’s government is trying to transform the country into a gas-exporting nation. Currently, Iraq is reliant on Iran for gas imports.

    Both Saudi Arabia and the US, which are looking to contain Iranian influence in the region, have been supporting Iraq in developing its non-associated gas fields as this will reduce Iraq’s economic reliance on Iran.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16138892/main.png
    Wil Crisp
  • Dubai seeks contractors for Nadd Hessa stormwater project

    26 March 2026

    Dubai Municipality has invited contractors to prequalify for a contract to build a sewerage and stormwater system in the Nadd Hessa area.

    The project is being procured through the Sewerage and Recycled Water Projects Department.

    The submission deadline is 2 April.

    Nadd Hessa is an emerging development area, located between Dubai Silicon Oasis and Academic City along the E311 corridor.

    It has been earmarked for future residential expansion, with enabling infrastructure now being tendered to support planned housing and community developments in the area.

    The scheme, known as DS 328/1–C1, covers the construction of sewerage and stormwater infrastructure, including approximately 12.4 kilometres of sewerage lines with diameters of up to 400 millimetres.

    The scope also includes about 14km of stormwater lines with diameters of up to 1,000 millimetres.

    In addition, the project involves around 500 metres of microtunnelling works for both sewerage and stormwater networks.

    The municipality is currently prequalifying contractors for several upcoming water projects, including the expansion of the Jebel Ali sewage treatment plant (STP) phases one and two.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cubic metres a day (cm/d).

    Bid submissions for this project are also due by 2 April.

    In addition, the authority is planning a broader review of Dubai’s water and wastewater infrastructure to support future population growth, including identifying locations for future infrastructure. 

    Two separate consultancy tenders were issued in March.

    One involves a study to develop a sustainable urban drainage systems strategy across the emirate. The other covers a review of the emirate’s sewage treatment and recycled water distribution strategy. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16138660/main.jpg
    Mark Dowdall
  • WEBINAR: Saudi Gigaprojects 2026 & Beyond

    25 March 2026

    Webinar: MEED in association with HKA Webinar on Saudi Gigaprojects 2026 & Beyond
    Tuesday 31 March | 1:00 GST  |  Register now

    Agenda:

    As Saudi Arabia’s gigaprojects move from vision to delivery, the kingdom’s projects market continues to evolve at an unprecedented pace. Billions of dollars’ worth of contracts are being awarded across infrastructure, real estate, tourism and critical industries, creating huge opportunities — but also new layers of complexity.

    This MEED Live broadcast, in association with HKA, brings together market intelligence and practical expertise to help project stakeholders understand and navigate the risks in this dynamic landscape.

    The session will open with Ed James, MEED’s head of content and research, who will deliver a comprehensive 30-minute outlook on Saudi Arabia’s gigaprojects and beyond. Drawing on MEED’s proprietary data and insights, Ed will highlight the scale of opportunity, sectoral trends and the finance shifts shaping the region’s project pipeline.

    Following the outlook, Ed will host an in-depth fireside chat with Haroon Niazi, partner at HKA, focusing on the critical theme of contractual risk management. In a market defined by rapid delivery schedules, shifting finance conditions and complex stakeholder ecosystems, Haroon will share strategies for mitigating disputes, safeguarding margins, and building resilient contracts that can withstand uncertainty.

    The broadcast will conclude with a live Q&A session, giving the audience the opportunity to engage directly with Ed and Haroon, and to take away actionable insights that will support their involvement in Saudi Arabia’s gigaprojects.

    Click here to register

    Hosted by: Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemicals market. He is considered one of the world’s foremost experts on the Mena projects market. He is a regular guest commentator on Middle East issues for news channels such as the BBC, CNN and ABC News and is a regular speaker at events in the region. 

    Haroon Niazi, partner, construction claims and expert services lead, International·HKA

    Haroon is a dual-qualified Chartered Quantity Surveyor (FRICS) and barrister with over 18 years of experience in the construction industry. He leads HKA’s Construction Claims and Expert Services Line across Europe, the Middle East, and Africa, overseeing a team of more than 200 consultants with responsibility for strategy and delivering the growth plan. His practice focuses on the resolution of complex and high-value construction disputes.   He has been appointed as a quantum expert and has delivered expert testimony in international arbitration and litigation, including in the Kingdom of Saudi Arabia. Haroon is known for his ability to analyse, quantify, and communicate the financial aspects of construction claims with clarity and independence.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16116602/main.gif
    MEED Editorial
  • Diriyah tenders media district north offices

    25 March 2026

     

    Saudi gigaproject developer Diriyah Company has tendered a contract inviting firms to bid for the construction of offices in the media district in the second phase of the Diriyah Gate development (DG2).

    The tender was released in March, with a bid submission deadline of 27 April.

    The scope covers the construction of five office plots comprising nine buildings, spanning over 50,000 square metres (sq m).

    The tender follows the Diriyah Company’s award of an estimated SR2.5bn ($666m) contract to build the Pendry superblock package in the DG2 area.

    The Pendry superblock encompasses the construction of a hotel, known as the Pendry Hotel, along with residential and commercial assets.

    The project will cover an area of 75,365 sq m and is located in the northwestern district of the DG2 area.

    In February, Diriyah Company awarded a SR717m ($192m) contract for the construction of the One Hotel, located in the Diriyah Two area of the masterplan.

    The project has a gross floor area of over 31,000 sq m.

    The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16114767/main.png
    Yasir Iqbal
  • Trojena terminates Ski Village steel structure contract

    25 March 2026

    Neom has terminated its contract with Malaysian contractor Eversendai Corporation for the steel structural works on the Ski Village project in Trojena, Saudi Arabia.

    In a statement published on its website, Eversendai said it had received an official notice that the termination will take effect from 26 March.

    Eversendai is jointly executing the construction works on the project with Riyadh-based contractor Albawani. The contract was formally awarded in March 2024.

    In July 2024, UAE-based steel producer Emirates Steel announced that it had signed a steel supply agreement for the Trojena Ski Village project.

    In January this year, Saudi Arabia confirmed the postponement of the 2029 Asian Winter Games, which were scheduled to be held at Trojena.

    Trojena had been chosen to host the event in October 2022.

    This latest public announcement comes shortly after Neom cancelled contracts for the construction of the tunnel sections of The Line in northwest Saudi Arabia.

    In a stock exchange announcement filed on 13 March, South Korean contractor Hyundai E&C said that Neom cancelled its contract on 29 December last year.

    Hyundai E&C was executing the drill-and-blast section of The Line’s tunnels in a joint venture with Greece’s Archirodon and South Korean counterpart Samsung C&T.

    These developments follow a wider strategic review of Neom last year, as Saudi Arabia reassesses priorities under its Vision 2030 programme. With tighter liquidity at the sovereign wealth fund level, resources are being redirected towards projects linked to the Fifa World Cup 2034, Expo 2030, and essential housing, healthcare and education initiatives.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16114360/main.jpg
    Yasir Iqbal