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
  • UAE GDP projection corrects on conflict

    24 April 2026

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16554417/main.gif
    MEED Editorial
  • April 2026: Data drives regional projects

    24 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 strain

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16553627/main.gif
    MEED Editorial
  • Firms announce 129MW Dubai data centre

    24 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
    Yasir Iqbal
  • Iraq signs upstream oil contract

    24 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
    Wil Crisp
  • Jordan tenders oil and gas terminal project

    24 April 2026

     

    Jordan’s Aqaba Development Corporation (ADC) has tendered a project for the development of the facilities at the Aqaba Oil and Gas Terminal.

    The project has been divided into two packages, and a bid deadline has been set for 15 June 2026.

    The oil and gas terminal is located south of the city of Aqaba in Jordan’s Southern Industrial Zone.

    The scope of Package 1 includes:

    • Rehabilitation of petroleum product pipelines of various sizes and their accessories (such as supports, structures and valves), including rectification of painting defects
    • Inspection and repair of pipe welds
    • Rectification and overall maintenance of the product booster pump
    • Inspection, maintenance, testing and commissioning of liquefied petroleum gas (LPG) booster pumps
    • Rectification of two overhead cranes
    • Rectification and calibration of instrumentation, including pressure indicators and valves

    The scope of Package 2 includes:

    • Rehabilitation of control rooms and security rooms, replacing them with concrete control rooms, including infrastructure works and all required services
    • Removal of unused tanks and equipment previously used for exporting crude oil
    • Rehabilitation of the existing gate in order to improve safety and security with the installation of a tire killer
    • Carrying out maintenance and repairs for the oil berth dolphins and trestle with inspection
    • Maintenance, repair and reinstallation of oil berth concrete slabs
    • Removal and extension of the jetty platform
    • Installation of a lighting system at pipelines beside booster pumps
    • Installation of stripping pumps at the LPG terminal
    • Replacement of drain line path for slop tank of LPG booster pumps
    • Rehabilitation of the existing closed drain drum
    • Rectification of cone sealing issue of all truck loading arms
    • Conversion of manual valves to motor-operated valves
    • Remote operation of shut-off valves on the main pipeline alongside and near the entrance gate
    • Upgrading of the firefighting system

    The last date for questions and clarifications related to the project will be 13 May 2026.

    The Aquaba Oil and Gas Terminal was built to meet demand for petroleum products and LPG imports into Jordan.

    It is operated by state-owned Jordan Oil Terminals Company (JOTC), which was established in 2015 as a private shareholding company.

    Earlier this year, Abu Dhabi’s AD Ports Group signed an agreement with ADC to manage and operate the Aqaba multipurpose port.

    AD Ports is managing and operating the port under a 30-year concession agreement.

    Under the agreement, AD Ports and ADC will establish a joint venture to oversee port operations.

    AD Ports will hold a 70% stake in the joint venture, with the remaining 30% held by ADC.

    AD Ports Group will also invest AED141m ($38.4m) in the joint venture.

    The signing ceremony was held at the Aqaba Special Economic Zone Authority headquarters in Aqaba on 5 February.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16543632/main.jpg
    Wil Crisp