DUBAI,—Some companies from the United Arab Emirates have pulled out of a major defense exhibition in Saudi Arabia, two sources with direct knowledge told Reuters, highlighting growing tensions between the Gulf allies.

The World Defense Show is scheduled to run in Riyadh from February 8 through 12. It was not immediately clear whether all UAE participants in the country pavilion had withdrawn.

Neither the UAE foreign ministry nor the Saudi government media office issued comments on the matter.

The UAE’s absence marks a shift in relations between two countries that once coordinated closely on regional security. Their interests have diverged in recent years on issues ranging from oil policy to geopolitical strategy.

The disagreement came to public attention in December after a UAE-backed southern Yemeni separatist group advanced near Saudi borders, prompting a Saudi-led coalition strike on a UAE-linked weapons shipment at the port of Mukalla.

Since then, the UAE has withdrawn its forces from Yemen. Saudi authorities have also accused the UAE of assisting a top Yemeni separatist figure in escaping via Somalia.

Business ties could be affected as well. Two Gulf-based business sources told Reuters that while cross-border trade remains largely unchanged, companies are quietly preparing for possible disruptions.

The UAE’s withdrawal from the annual defense event is seen as a signal that political disagreements could start influencing commercial relations.

Analysts note that the dispute could echo past regional conflicts.

During the 2017 Qatar blockade, trade and investment flows were disrupted, and Saudi-linked funds imposed restrictions on capital moving to Qatar.

Many investors fear similar effects if tensions between Saudi Arabia and the UAE widen.

Currently, Saudi Arabia and the UAE share roughly $30 billion in trade, with executives and goods regularly moving between the two countries. Large Saudi conglomerates maintain substantial operations in the UAE, where many senior teams are based.

Internal business assessments are increasingly considering risks that were previously unlikely, including potential interruptions to flights and supply chains, the Gulf-based sources said.

One senior business figure commented, “Everyone stands to lose if this escalates.”

(With files from Reuters)

Copyright © 2026 Dubai Diplomacy. All rights reserved.

Your support matters! Consider buying us a coffee — every bit helps keep independent news alive.

Related posts:

Saudi-UAE rift widens as Emirates quits oil cartel Is a Gulf NATO Really Possible? Saudi Arabia issues security warning as UAE told to exit Yemen Saudi jets target UAE-backed separatists in Yemen’s south Gulf states press Trump to continue war until Iran is fully weakened UAE pulls remaining forces from Yemen after Saudi Arabia call: ministry In the Saudi Arabia–UAE Rivalry, the Saudis Are Wrong Saudi Arabia says UAE helped Yemen separatist leader to flee