Saudi-Emirati soft power surge amid Russia-Ukraine crisis

Saudi Arabia and the UAE strategically navigate the Russia-Ukraine conflict, aiming to bolster their soft power influence. These Gulf states' increasing aid, mediation, and trade efforts showcase their commitment to multipolarity and growing influence on the world stage.

The Russia-Ukraine conflict has emerged as a pivotal geopolitical flashpoint, capturing the world’s attention since February 2022. This intricate conflict with global economic repercussions has attracted several international players. Among these, Gulf nations, particularly Saudi Arabia and the United Arab Emirates (UAE), have taken on intriguing roles that demand a closer look. 

It’s imperative to delve into the evolving positions of these Gulf states in the Russia-Ukraine conflict, highlighting their efforts to play a mediator role while safeguarding their interests and navigating the turbulent waves of the emerging multipolar world order.

Saudi Arabia and the UAE have embarked on a unique journey to position themselves as mediators in the Russia-Ukraine conflict, showcasing their growing diplomatic prowess on the international stage. The peace talks held in Jeddah, Saudi Arabia, underscore the Kingdom’s commitment to fostering dialogue among conflicting parties. 

This initiative isn’t isolated, as Saudi Arabia and the UAE have previously mediated in regional political issues such as, in Lebanon, Sudan and the Syrian crisis, underlining their growing role as diplomatic brokers in West Asia.

While these Gulf nations strive to promote peace, they remain deeply concerned about their interests, which are intertwined with the ongoing Russia-Ukraine conflict. Saudi Arabia and the UAE have carefully balanced their relationships with Russia and Western powers. This delicate balancing act aims to preserve valuable economic, political, and security ties between the Gulf and the two conflicting sides.

Both Saudi Arabia and the UAE maintain strong relations with Russia, Ukraine and key Western powers. This multifaceted approach not only allows them to safeguard their interests but also presents an opportunity to be seen as capable neutral arbiters.

The world order is gradually evolving towards a multipolar structure, with various global players vying for influence. In this context, Saudi Arabia and the UAE are adapting to this shift. Their attempts to foster peace in the Russia-Ukraine conflict demonstrate their willingness to become indispensable actors on both regional and international stages. The emphasis on diplomacy in recent years, starting with the Al-Ula reconciliation summit of Gulf Cooperation Council (GCC) leaders in 2021, highlights their strategic shift towards global diplomacy and a more proactive foreign policy.

Furthermore, Saudi Arabia’s pivotal role in global energy markets, and its strategic partnership with Russia through the OPEC+ agreement, underscores its centrality in international politics. The Kingdom aims to become self-reliant in foreign policy, diversifying its political and economic relations to reduce its historical dependence on the US.

Saudi-Emirati economic interests tied with Russia?

Saudi Arabia and its Gulf neighbours have a significant economic stake in the ongoing crises around the globe, particularly in the Ukraine-Russia conflict. The Kingdom, a major oil producer, has historically played a pivotal role in global energy markets, and maintaining stability in global oil prices is paramount, as fluctuations can directly affect its revenue.

While the Ukraine-Russia conflict itself may not have an immediate direct economic impact on Saudi Arabia, it is essential to consider the bigger picture. As a key player in global energy markets, Russia has a role in influencing oil prices. The more turbulent global politics become, the higher the risk of energy price volatility, which is a significant concern for all the Gulf countries’ economies.

The Saudi-Russia relationship has strengthened, notably in oil agreements and diplomatic efforts led by Saudi Crown Prince Mohammad bin Salman (MbS). The GCC’s ties with Russia have expanded since the 2016 OPEC+ agreement. During the Ukraine conflict, most Gulf Arab states refrained from condemning Russia. The Saudi Kingdom’s oil policies, rebuffing US requests to increase production, demonstrated an alignment with Russia regarding the oil market. 

Saudi Arabia and Russia are strengthening economic ties, driven by Riyadh’s diversification efforts under Vision 2030. Bilateral trade between the two was recorded to be $2.2b in 2021 and is rising in 2023, especially in agriculture. Both nations aim for a $5b trade by 2030. Saudi investments, totalling $2b in 2018, resumed, with Kingdom Holding investing $526m in Russian energy. Russian firms, including tech and drone companies, are entering Saudi markets–notable investments, like Alwaleed bin Talal’s $500m in Russian energy companies.

Like Saudi Arabia, the UAE’s economic interests in Russia and Ukraine are intertwined with the energy market, bilateral trade and investment opportunities. The UAE is also a major player in global energy markets and maintains a diversified economic portfolio, which includes investments in various sectors, including energy, finance, and infrastructure.

In terms of energy, the UAE’s investments in Russia are notable. These investments in Russian energy companies and projects are part of the UAE’s broader strategy to enhance its energy security. Trade between Russia and UAE from 2017-2022 surged almost sixfold, reaching $9b in 2022, with the UAE emerging as Russia’s 12th most significant trade partner and the leading partner in the Gulf. Precious stones and gold constituted nearly 40% of Russia’s exports to the UAE in 2022. 

Additionally, the Russian oil re-exported by the UAE and the exponential growth in electronics re-exports illustrate the evolving trade dynamics. Moreover, the UAE is involved in nuclear energy cooperation with Russia, through the establishment of the UAE’s peaceful nuclear energy programme and cooperation with Russian nuclear companies.

Investments between the nations have flourished, with Russian investments in the UAE reaching $1.1b by early 2020. The UAE reciprocated with investments of $1b in Russia by 2021. In 2022, 700 Russian companies were established in the UAE, totalling 4,000, indicating a thriving economic partnership. Real estate transactions and the tourist influx from Russia to the UAE have also surged. 

Efforts to expand trade include ongoing negotiations for a free trade agreement between the UAE and the Eurasian Economic Union (EAEU). The International North-South Transport Corridor (INSTC) serves as a potential avenue for enhanced economic cooperation between the Gulf and the greater Eurasian economic region. 

These developments underscore the mutually beneficial economic partnership, characterised by robust trade, investments, and collaborative initiatives between Russia and the Gulf states.

The economic ties between the Gulf and Ukraine have also grown, particularly in the areas of trade and investment. Gulf countries could potentially play a role in a post-war Ukraine by being key investors. This diversification of economic partnerships is essential for the UAE as it seeks to position itself as a global business hub.

Arguably, economic interests play a role in shaping the Gulf’s diplomatic initiatives and involvement in mediating the Ukraine-Russia conflict. The measured stance taken by the UAE and Saudi Arabia highlights their preference for economic engagement, thus underscoring a broader strategy of diversification in an increasingly multipolar landscape.

Diplomatic efforts

Saudi Arabia and the UAE have strategically positioned themselves as diplomatic players in the Ukraine conflict, leveraging their geopolitical significance and economic interests. Hosting the recent peace talks in Jeddah, Saudi Arabia aims to assert its role as a non-aligned influencer on the global stage. By bringing together representatives from 30 countries, including key Western and developing nations, Riyadh seeks to demonstrate its capacity for mediating global crises, a role it has played historically in conflicts such as Lebanon, Syria, Yemen and Sudan.

In September 2022, Saudi Arabia played a pivotal role with Türkiye in facilitating a prisoner exchange, arranging for the release of pro-Moscow politician Viktor Medvedchuk in exchange for 215 Ukrainian Azov Battalion prisoners of war.

In a strategic diplomatic move, Saudi Arabia and the UAE are navigating a delicate balance between Ukraine and Russia. Faisal bin Farhan’s historic visit to Kiev, resulting in a $400m aid package, signifies Saudi Arabia’s commitment to a peaceful resolution and state sovereignty. Simultaneously, Riyadh deepened its engagement with Russia, showcasing a calculated diplomatic balancing act.

The GCC follows suit, maintaining a neutral stance amid Western pressure to isolate Russia. The Gulf’s pragmatic approach, abstaining from certain votes while condemning Russia’s “special military operations in Ukraine” in the UN General Assembly, allows for continued diplomatic relations. This measured strategy is reflected in the Russian media, praising Saudi Arabia’s “balanced relationship” with Russia.

However, challenges loom as the US warns against diluting sanctions on Russia. As a result, the UAE’s SWF Mubadala paused its investments and Qatar Investment Authority announced limitations in its engagement in Russia. 

On February 12th, Russian Ambassador to Saudi Arabia Sergey Kozlov highlighted a notable increase in military-technical cooperation between the two nations. However, Russian arms deals with GCC nations face hurdles due to the Ukraine conflict’s impact and Russia’s military cooperation with Iran. 

Amid these challenges, Gulf countries are expanding their commercial presence beyond Russia. Talks with Ukraine for a trade agreement and investment deals with Central Asian countries mark diversification efforts. 

Regional implications and Saudi-Emirati objectives

The geopolitical events extend beyond Ukraine, potentially altering alliances and power dynamics in the region. Saudi Arabia’s growingly close ties with Moscow, evident in measures perceived as aiding Russia amid sanctions, may strain relations with Western allies, adding complexity to the Kingdom’s regional positioning. Conversely, successful mediation could enhance Saudi Arabia’s standing among major states with neutral stances on the conflict, such as Brazil, India, and China.

For the UAE, active diplomatic engagement aligns with its strategy of diversified foreign relations, moving away from historical dependencies. Broader regional implications include the potential for enhanced cooperation with key players like Russia and China, providing an alternative to the Gulf’s traditional Western patrons.

The Gulf countries leverage their non-alignment to position themselves as a potential mediator in the Ukraine-Russia conflict, engaging in shadow diplomacy with successful interventions in prisoner swaps and talks between Russian and Ukrainian officials.

As the hegemonic power of the US contends with numerous challenges and global turmoil escalates, Gulf countries are positioned to play a pivotal role in aid donations and conflict mediation. These mediation services provided by the Gulf states highlight the shifting dynamics in a once Western-dominated political sphere. 

Additionally, trade agreements, such as the Gulf-Russia, Gulf-Central Asia, and the prospective Gulf-Ukraine deal, underscore the commitment of the Gulf, led by Saudi Arabia and the UAE, to multipolarity and its expanding influence through soft power.