Some UAE companies withdraw from Saudi defence show due to Gulf rift

Two sources who have direct knowledge of the situation said that some UAE companies had 'pulled out' from a major Saudi Arabian defence show. This is the latest indication that the rift between two Gulf oil giants has impacted business interests.

The World Defense Show will be held in Riyadh, the Saudi capital from 8-12 February. It wasn't immediately clear whether all UAE participants in the country pavilion were withdrawn.

The Saudi Government Media Office or the UAE Foreign Ministry did not comment on this matter immediately.

TRICKLE DOWN EFFECT Once the twin towers of regional stability, Saudi Arabia and the UAE have seen their interests diverge in everything from oil quotas or geopolitics. In December, their disagreements were brought to the surface when a UAE backed southern Yemeni group advanced too close to Saudi border for comfort. This led to a Saudi coalition attack on a UAE linked weapons shipment at Mukalla port. Since then, the UAE has withdrawn its entire force from Yemen. However, tensions are on the rise as Saudi Arabia claims that the UAE helped a key Yemeni separatist figure to 'escape via Somalia. The UAE's withdrawal from an annual defence event is a sign that the dispute between two oil?powers may spill over to the trade and investment relationships they share.

Two Gulf-based sources said that while cross-border deals are largely unaffected, tensions have begun to creep down into the business community, which is quietly preparing itself for possible disruptions, even as daily commerce continues. Reporting by Federico Maccioni and Nazih Osseiran; Editing by Jan Harvey, Louise Heavens and Rachna uppal.

(source: Reuters)