Saudi-UAE payment blocks could imperil billions in trade: What to know
Delayed bank transfers from Saudi Arabia to accounts in the United Arab Emirates could suggest the rivalry between the region's largest economies is entering a new financial phase.
As the US-Iran conflict continues to squeeze oil and gas flows through the Strait of Hormuz, another simmering Gulf rivalry could soon snarl regional trade even further.
On July 7, news surfaced that bank transfers from Saudi Arabia to accounts in the United Arab Emirates had been delayed, blocked or returned without explanation, per reports from Bloomberg and the Financial Times that cited unnamed company executives.
While the scale of the issue remains unclear — and Saudi Arabia's central bank has said there are no restrictions targeting specific countries — the unusual payment obstacles raise fresh questions about whether the region's largest economies are entering a more disruptive phase of a rift that will increasingly spill into commercial arteries.
The incidents emerge after months of worsening tensions between the two Gulf powers, which have clashed over increasingly divergent geopolitical priorities in Yemen, Sudan and elsewhere. Amid growing Saudi-UAE frictions, these financial disruptions could be important, though it’s hard to know how extensive and long-lasting they will be, according to Tim Callen, a visiting fellow at the Arab Gulf States Institute and former International Monetary Fund mission chief for Saudi Arabia.
