Riyadh (Somalia Today) — Saudi banks have delayed or blocked money transfers to accounts in the United Arab Emirates since May, the Financial Times reported, raising concerns that a widening political rift between the Gulf neighbours is now hitting trade.
Several people told the newspaper that Saudi banks had returned or delayed payments to UAE-based accounts belonging to companies and individuals in Dubai, often without explanation.
One Western executive at a Dubai-based healthcare company said Saudi banks had blocked and returned several payments from a long-standing Saudi client since mid-May.
The banks “typically held” the funds “for about a week with no query raised to the sender or beneficiary, then simply returned” them, the executive said.
Another Dubai-based business figure said payments from Saudi Arabia now “take a long time”.
“We have a customer waiting for goods, but the payment is not happening,” the executive said.
Saudi Arabia’s central bank denied imposing country-specific restrictions, saying the kingdom’s financial sector “operates within a robust regulatory framework”.
It said banks apply risk-based checks across transactions “to safeguard the integrity of the financial system”.
A UAE official also downplayed the reports, saying the economy and tourism ministry had not received any complaints from private companies about unusual transfer delays.
“The UAE and Saudi Arabia maintain deep and longstanding economic and commercial ties,” the official said.
Trade concerns
The reported delays have alarmed companies that use Dubai as a base to serve the Saudi market, one of the Gulf’s most important commercial routes.
Some affected businesses have rerouted payments through Bahrain or turned to more expensive options such as PayPal after Saudi bank transfers failed or stalled, according to the FT.
One service provider said a Saudi client’s bank payment failed last month, with only a notice saying the “transaction failed”.
The dispute cuts to the heart of a major economic relationship.
Saudi Arabia, with an economy worth about $1.2 trillion, and the UAE, worth about $550 billion, are the Arab world’s two largest economies. Bilateral trade exceeds $20 billion a year.
For decades, companies have used Dubai as a regional hub to sell goods and services into Saudi Arabia.
But Riyadh has pushed aggressively to bring more business, jobs and investment into the kingdom under Crown Prince Mohammed bin Salman’s Vision 2030 programme.
Since January 2024, foreign companies seeking Saudi government contracts have had to establish regional headquarters in Saudi Arabia, a policy widely seen as challenging Dubai’s position as the Gulf’s main corporate centre.
Global banks, consultancies and multinational firms have since expanded in Riyadh to protect access to Saudi state-linked contracts.
Growing rift
The payment reports come after months of worsening tension between Riyadh and Abu Dhabi, long seen as close partners but increasingly divided over trade, oil policy and regional influence.
“There has always been economic competition between the two sides, and this is not the first time that such measures have reportedly been deployed to raise the stakes,” Kristian Coates Ulrichsen, a fellow for the Middle East at Rice University’s Baker Institute, told Middle East Eye.
He said the relationship had survived earlier bouts of tension, including in the late 2000s and in 2021.
The sharpest recent rupture came over Yemen, where Saudi Arabia accused the UAE of backing a secessionist faction that launched an offensive against Saudi-aligned forces in December.
Saudi Arabia and the UAE entered Yemen’s war together in 2015 as the two main powers in a coalition fighting the Houthis.
But their goals later diverged. Riyadh backed Yemen’s internationally recognised government, while Abu Dhabi cultivated southern separatist forces seeking autonomy or independence.
Saudi officials said the UAE had threatened the kingdom’s national security by supporting the latest offensive.
The UAE later pulled military personnel from Yemen amid the tensions and after Saudi attacks on its Yemeni allies.
The war failed to defeat the Houthis and killed hundreds of thousands of Yemenis, while leaving Saudi Arabia exposed to missile and drone attacks.
Regional tensions
The rivalry has also spread into the Horn of Africa, where Saudi officials have objected to the UAE’s backing of separatist movements in Somalia and Yemen.
Abu Dhabi has built influence through ports, security partnerships and ties with local authorities, including in Somaliland and other Somali regions.
Riyadh has viewed some of those moves as a challenge to central governments and to its own regional influence.
The tensions briefly faded from view during the US and Israeli war with Iran, when Gulf states tried to project unity after Iranian attacks threatened the region’s security and energy routes.
“It’s likely that the tensions never really went away, but the immediacy and urgency of the Iranian attacks on the Gulf meant that they faded into the background during the war,” Ulrichsen said.
The calm did not last.
Earlier this year, the UAE shocked its neighbours by announcing it would leave OPEC, the oil producers’ group effectively led by Saudi Arabia.
Abu Dhabi said the decision reflected its “economic vision and evolving energy profile”, but many observers saw the move as a blow to Riyadh.
Saudi officials have previously insisted that political tensions with the UAE would not damage trade or economic ties.
For businesses caught between the two Gulf powers, the payment delays suggest the commercial relationship may no longer be insulated from the political dispute.
“A lot of suppliers for Saudi Arabia come from the UAE,” one Dubai-based executive said. “By doing this, they are shooting themselves in the foot.”
