MEE LIVE: The Real Reason UAE Left OPEC with Andreas Krieg (Transcript)

How do you see that?

ANDREAS KRIEG: I mean, that’s been a dynamic that’s been going on for a long time. This issue of Saudi — obviously in the 1980s when the GCC was created, Saudi was the big brother. The smaller Emirates — the UAE, Qatar, Bahrain, and Kuwait — they were kind of junior partners to Saudi Arabia. That relationship has changed because, especially Qatar and the UAE, have completely changed who they are, how they see themselves, and how they punch sometimes above their weight as well.

The Emiratis always try to find a way to create more autonomy, more sovereignty away from Saudi Arabia, even at the expense of Saudi Arabia. The difference here is the countries see themselves as a small state and they’re quite happy to be a small state, while the Emiratis have the ambition of being a middle power on par with Saudi Arabia. So they see this competition with Saudi Arabia as something they can actually pursue and potentially win.

The Abraham Accords are also part of that. The Abraham Accords were a way of creating a potentially multilateral framework that the Emiratis control. One reason, by the way, why the Saudis will never join the Abraham Accords — they might normalize with Israel, but they will never join the Abraham Accords — because they’re ultimately an Emirati entity and they would become subservient to the Emiratis. So it’s that sort of competition that’s at the heart of also the decision of getting out of OPEC, of saying, “We want to make our own sovereign decisions. And at this current moment of friction with Saudi Arabia, we can’t afford following Riyadh.”

Competing for Washington’s Favor: The Currency Swap and Trump’s Transactionalism

INTERVIEWER: As you know, that competition is taking place in economic arenas, in the diplomatic sphere — as you say, the Abraham Accords trying to maneuver its own realm of influence away from Saudi policy. Both have also notoriously kind of competed for the affections of the Trump administration, offering investments and so on. We know that recently the United Arab Emirates requested this currency swap line with the US, less out of arguably a financial need than to kind of signal political closeness. And the Treasury Secretary so far has responded relatively positively to that request.

How do you see the UAE doubling down on its relations with the US and choosing to signal closeness vis-à-vis Saudi? Do you think that’s also kind of feeding into this sense of competition?

ANDREAS KRIEG: Well, this competition in the Gulf in general has been for a long time about who’s closest to Washington. If you look at it — remember back to the Gulf crisis, the blockade of Qatar — that was also competition between who’s closest to the Trump administration. This rift between Saudi and the UAE is as well a competition of currying favors with the Trump administration: who is closer to Trump between Saudi Arabia and the UAE. I think that all plays in.

I think a lot of what the Emiratis are pushing out now is about a narrative — the narrative of “we’re doubling down on the US, we’re doubling down on the relationship with Israel” — which is geared towards the audience in the United States, not necessarily the East or even the Arab world, where this would be seen as far more contentious.

At the same time, the Emiratis have had a relationship with China and obviously doubled down on that as well. And this currency swap was also part of signaling, saying, “Look, give us the dollars, show that you mean business. We’ve supported you for quite a long time — now we want something from you. Please deliver it, or else.” It’s also, again, part of that interdependence element of creating interdependence, but also trying to find a route to weaponize it — how to extract leverage from interdependence to, again, serve national interests.

But it’s not a one-way street. The Emiratis are pivoting both ways. They still have a very strong relationship with Russia. They have just doubled down on a relationship with China. And they’re saying this is not fundamentally diametrically opposed — they still have that very intimate relationship with the United States.

But this swap deal, and also the withdrawal from OPEC, there is an element of saying, “If the United States had a problem with OPEC or OPEC+ and their limits on production, we will no longer be beholden to that. We can do whatever the US wants us to do and produce more in order to bring prices down, for example.” Again, none of that makes any difference in this war with Iran, but it could make a difference further down the line.

The Insecurity Beneath the Surface: Iran, Hormuz, and Trump’s Attention Span

INTERVIEWER: I imagine, though, despite this closeness with the US and kind of extracting those concessions, there must be a great deal of insecurity right now given the extent of Washington’s control over relations with Iran, the direction of the war, the outcome of control over the Straits of Hormuz. We know Mr. Trump to be quite a transactional figure. There’s been reporting that intelligence agencies are testing what possible Iranian reactions could be if the US unilaterally just declares an end to this war.

So we know that the US focus going into negotiations with Iran is perhaps a great deal narrower than the Gulf states — not just the UAE — would hope for it to be. Is there this insecurity that Trump’s attention span, Washington’s demands, could really fall short of what the UAE and its neighbors have hoped for?

ANDREAS KRIEG: Yes, and I think that’s probably the most problematic and possibly even the most realistic scenario right now — that there might be some sort of interim deal with the Straits of Hormuz, but the war and the key grievances of this war remain unresolved. Obviously, the worst-case scenario being that the Strait of Hormuz stays closed as well, or being highly degraded in terms of the flow that is required to keep it viable. And Trump just walking away from this problem and leaving the GCC to its own devices.

The problem with the transactionalism of the Trump administration — and that’s a problem for all the GCC states — is the fact that it’s a very poorly designed transactionalism when the guy that you’re trying to create a transactional relationship with, Trump, is irresponsible and doesn’t keep his side of the bargain. He took the $3.6 trillion that were given by GCC countries collectively to Trump, but he’s not actually delivering anything. He wasn’t listening to any of the warnings.

The problem now is that the UAE is going in a different direction. They’re saying everything has to be revised, including our held assumptions about Iran. And maybe the war actually has to continue for us to actually finish the job — which I find a highly problematic statement and, in my opinion, far removed from reality, because I don’t think there is a military solution to it.

The UAE’s Economic Model: Neutrality vs. Taking Sides

INTERVIEWER: All of the Gulf states’ economic models have taken a hit throughout this war — that image of stability really being threatened by missile attacks from Iran. At the same time, though, surely to a degree, their economic model, and specifically the UAE’s, rests on a degree of neutrality — not hawkishness — given especially that the UAE has long been a place for money from Iran, from Russia, and so on. It kind of opens itself up as this sanctions haven that doesn’t discriminate. Surely taking such a clear stake, coming down so clearly on one side, would threaten that model, even if hostilities do end. Surely this would go against that.

ANDREAS KRIEG: In Dubai, for example, it’s a service-based economy. Dubai relies on business before politics, and business is more important than politics. They’ve always maintained these kinds of networks and relationships. And as a service-based economy, they can’t do without them. They need stability to thrive.

There is a slightly different approach in Abu Dhabi, because Abu Dhabi’s model is mostly about selling oil and energy — it’s a proper rentier economy. And as long as that can be sold, you can make money. And if it’s not just energy, you have that sovereign capital that they have invested, again, that is generating money overseas. Abu Dhabi can weather the storm for slightly longer than Dubai in terms of the current pressure and the current status quo.

And so that friction that we see within the Gulf is also friction that we see internally in the UAE.

The GCC’s Fractured Alliances

INTERVIEWER: Hmm, interesting. And speaking of that friction, there were a lot of expectations at the start of this war that kind of previous rifts between Saudi and the Emirates would kind of be papered over under a shared threat. That clearly hasn’t happened. They’ve had very different threat perceptions of how to deal with this issue. Before the war, there was talk of kind of an emerging Abrahamic versus Islamic coalition, when instead of uniting, different countries within the GCC would instead look to different external partners. So the UAE, as we’ve mentioned, with the US, Israel, to a lesser extent India, and then Saudi Arabia towards Turkey, Qatar, Pakistan even. Do you see that as the more likely coming regional coalition or coalitions rather, rather than kind of the GCC being an effective united actor?

ANDREAS KRIEG: I think the number one priority for the GCC is to have a united GCC approach to this because that again, prisoners of geography, you might have a relationship with Pakistan, but Pakistan is on the other side of the strait. It’s in more Central Southeast, South Asia than it is part of Arabia. So you need to first of all have an arrangement with the people who are right next to you. That’s about proximity. It’s first and foremost the 6 Gulf countries, but it’s also Iran on the other side of it. You can’t ignore the Iranians. They’re still there.

I think that’s the number one preference. Is it likely going to happen for the reasons I outlined? Not very likely. There are a lot of points of friction within the GCC. Turkey, Pakistan, if you talk about the Sunni alliance, some people have talked about this, potentially containing Iran. I don’t think that is necessarily a good option in the long run because at the moment there seems to be quite an overlap of interests and values. But over time, because of the lack of proximity in geography, that is likely going to shift in different ways because Turkey might have their own position and Pakistan might have their own position.

It’s certainly something that is being pursued as everything else is being pursued because everyone is very desperate to find a solution to it. And clearly the UAE, with inviting the Israelis over with the Iron Dome, them working with the Israelis in Somaliland as well, there is clearly an alliance that’s being built between the UAE and Israel. They’re doubling down on this rather than backing out of it. And most of the narrative suggests that that’s what they’re doing as well.

I just don’t think it’s a smart idea from an Abu Dhabi point of view to be doubling down on a relationship with a country such as Netanyahu’s Israel in particular, when you do have a potentially much more resolute, more robust sort of relationship with your neighbors right next door, who you share the religion with, the border with, the family with, the tribes with, the language with. But it certainly looks like this on the surface.

Is This the Death Knell for the GCC?

INTERVIEWER: It strikes me that the divisions you’re describing here, obviously this isn’t the first rift within the GCC. Infamously, there was the blockade of Qatar, on which the UAE and Saudi were aligned in 2019. And obviously people point to that as kind of evidence that, oh well, these disputes are common. From what you’re describing, though, this seems as something a little deeper and more long-term than the rift with Qatar and previous rifts in the organization. Do you see this as something of a death knell for the GCC, or do you think this is a similar period where there were divergences, but ultimately, as you described, geography demands that they will eventually reconcile?

ANDREAS KRIEG: No, geography demands they need to reconcile. A constant state of conflict between these 6 countries is unimaginable and is also not feasible because all of them have the same need for stability and security. They might have a different ontology and philosophy of how to define security and how it looks like, but ultimately they want the same thing. And there is an interconnectivity that you can’t just cut. And that’s also not something the UAE want to do. It’s something that we’ve seen in the blockade with Qatar as well. It was impossible to do, despite the fact that Qatar was a peninsula, far more easy to isolate geographically than the UAE.

So no, I think the Gulf is going to be there, it’s going to be sustained. But the point is, and we have the same problem with the Arab League, you might have this joint organization, but these organizations are only as strong as the members. And if you have individual members pivoting away from the consensus, it will make this organization no longer operational and effective. And that’s kind of the concern that I have, that everyone’s pursuing their own sort of independent strategies in this.

But ultimately, the problem that Saudi has with the UAE, among certain economic issues which is more competition — competition isn’t a problem, it was always there — the fundamental ideological problems are really the relationship with Israel. The fact that Israel is using the Abraham Accords as a tool of divide and rule, of creating an alternative access to a Saudi-led framework. That’s something the Saudis cannot live with and they don’t want to live with.

It’s also something that the other smaller GCC countries who’ve had their own reservations towards Saudi Arabia — Oman, Qatar — have said, “We’re siding with Saudi Arabia on this because we don’t want this to be a region where a country like Israel, and it’s not just any Israel, it’s the Israel of Netanyahu, it’s the worst form of Israel that we’ve ever had from a Gulf perspective.” They don’t want them to dictate the terms of where the region is going. And it was ultimately the Israelis who imposed this war on the region. More so, obviously the Iranians played their part in this, but it was the Israelis who imposed it on them.

Gulf Influence in US-Iran Negotiations

INTERVIEWER: Yeah, and notably, many foreign countries have said that any kind of normalization with Israel is something of a non-starter with Netanyahu’s government, and for obvious reasons. Given that, as you’ve said, the UAE’s position has put it out of touch with much of the Arab street in terms of views of Israel, it’s also meant that it’s less well-placed to be involved in diplomatic proceedings in the same way that Saudi Arabia has, Pakistan, Turkey, as we’ve mentioned.

When we look at the outcome of this war, do you think that ultimately, firstly, Gulf considerations, to the extent there are collective considerations to be spoken of, will be included in any final settlement given the fear that the Strait of Hormuz will drown out all other concerns? And secondly, given Saudi’s proximity to the process, do you think it is Saudi Arabia’s conception of regional security or Qatar or others that will take precedence in terms of the terms that are finally agreed, if there are terms agreed between the US and Iran?

ANDREAS KRIEG: What’s happening between the US and Iran sits on a completely different sheet of paper than what the Gulf would want from this sort of dialogue. And I’m also not very confident that we are getting to a final agreement anytime soon because there are maximalist positions being put forward that need a lot of hard work to basically chip away from, to get to something that looks like consensus — a Venn diagram where both sides actually agree on a joint position. We are far, far away from that because of the egos involved.

Someone like Donald Trump, who has no attention span, and someone like the Iranians, which are now run by the IRGC — the most hardline, less compromising, least pragmatic sort of IRGC regime we’ve ever had in Iran — for them to come to an agreement is not just going to be something that’s been bashed out in a day, which is what JD Vance was intending to do. So that’s a different track.

Obviously Saudi Arabia and Qatar have tried to influence this process. They’ve been present in Islamabad. They’ve been able to speak to the various parties trying to bring them together. A lot of backchannel talks have happened before these talks in Islamabad actually happened. The problem with the Pakistanis, though, is the Pakistanis are unable to do that. They don’t have the sort of long track record of mediation that, let’s say, the Qataris have or the Omanis have.

INTERVIEWER: And lack the leverage too.

ANDREAS KRIEG: And lack any leverage. And all they do is, “Here is a room, sit down and speak to one another.” But I see a lack of innovation in terms of innovatively finding a solution to some quite wicked problems. And so we might see this whole process pivoting back to the Gulf eventually when Qatar and Oman are ready to play a role in this and end up being invited to do so.

But Trump has an interest to keep this a US-Iranian issue, getting the Israelis out of the room and the Gulf out of the room and doing his own thing, what serves American interests. That’s ultimately what MAGA is all about, making America great again. It’s America First. America First also comes clearly at the expense of the Gulf countries. And so none of the Gulf countries are in any position — not the UAE, not the Saudis, not the Qataris, not the Omanis — to impose any terms on this.

I think what we can hope for now is that the most pressing issue is no longer the nuclear issue, because that is something that we’ve almost solved in a way. There are a couple of courses of action, a couple of scenarios where we can move forward on the issue because we’ve negotiated over this issue 50 times back and forth. In February, we already came very close to a compromise on the nuclear issue.

The issue now in the room that we haven’t discussed, where we don’t really have a solution that looks like anything concrete, is the Straits of Hormuz and freedom of navigation. That’s the one thing, and that’s a problem we didn’t have in February. It’s a problem that was caused by this idiotic war. Finding a solution to this problem is probably more of a pressing issue for the global economy and also for the Gulf states than it is for Donald Trump per se as an individual.

So he might say, “Well, let’s see where we are in 6 weeks’ time or in 2 months’ time,” at which point the cost on the global economy will be immense, the cost on the Gulf economies will be immense, and also the cost on the Iranians will be immense. And he might be willing to sit this one out because that’s the way Donald Trump works. That is a very bad outcome for the Gulf states. And neither side of the divides that we just outlined will have any real leverage over creating something that will bring us a solution to this.

A Post-Conflict Gulf Security Arrangement

INTERVIEWER: And a very bleak outlook already, but just lastly before we close, you’ve mentioned that the US-Iranian track is very separate and that everyone in the region ironically is being kept out of the room. Say there is some kind of termination to hostilities, there’s a deal over Hormuz, potentially the nuclear. Eventually, I imagine Iran and the Gulf states will have to sit down together separately from Trump and find out basically how they’re going to coexist in the region. Issues of Iran’s missiles and drones, its allied militias in the region — what do you expect that kind of a security arrangement could look like? And is it one that leaves Tehran emboldened, or is it one where it shows actual pragmatism in realizing that it has to reconcile with its Gulf neighbors? How do you see that relationship resolving itself, especially given a lot of the harsh words from Iran and maximalist demands about US bases in the region?

The GCC’s Fractured Response to Iran

ANDREAS KRIEG: Look, the elephant in the room is still Israel, right? They’re the ones who will ultimately derail and spoil. They’re the biggest spoiler in all of it. At the same time, we got a narcissist surrounded by sycophants in Washington, in the White House, Donald Trump, not a good negotiator, terrible when it comes to making a deal despite all the books he’s written on it. And then on the other hand, we’ve got a highly unpragmatic, a maximalist, and I, maybe less ideological, but certainly hardline regime IRGC regime in Iran. So these three ingredients already are very bad for finding a solution.

Then you’ve got the Gulf states who do want to pragmatically engage the Iranians because they understand there is no alternative to this. But then the GCC states exist on a spectrum as well in terms of how they see this going forward. There is no alternative to having a relationship with your neighbor, whether you want to or not, in the same way that in the Cold War that Washington and Moscow needed to have some sort of backchannel line to speak to one another.

Now, I think the positions differ from the Omani position on one end of the scale, who are saying, let’s create a joined framework including the Iranians, security framework, which is an absolute no-go at the moment for the other 5 states, I would say. And on the other end of the spectrum, we’ve got the Emiratis who are saying no relationship with the Iranians, maybe some backchannel here and there, but ultimately it’s about deterrence, it’s about force, force projection, and using force if necessary collectively to contain this Iranian threat, maybe with Israeli support, maybe with American support.

And then you’ve got Qatar and Saudi somewhat in the middle. And I mentioned the two of them because they’re actually working together. They’re the only ones who are actually currently trying to build an off-ramp, trying to find a solution to this, taking into account Iranian aggression, but also taking into account Israeli aggression and trying to find a middle road and being quite active about it and using all their networks.

Kuwait and Bahrain, unfortunately, are not playing any role. Bahrain is also very maximalist in their position, probably close aligned with the Emirati position. But then again, Bahrain is so small that it is insignificant in that wider scheme of things. And Kuwait being entirely passive, despite the fact that they’ve been really hard hit by this war.

And so if you see all that spectrum, it shows you how complicated it’s going to be to find a GCC position. And just to go back to what happened yesterday in Jeddah, where you had this extraordinary GCC summit. The Omanis didn’t show up. The Emiratis sent the second guard. It seemed to have lacked the ability to convene, actually. The Saudis showed a lack of ability to convene the necessary people. So it’s going to be a long, long process. And I don’t think there are going to be any easy solutions.

INTERVIEWER: Yeah, and certainly if a threat and a crisis of this magnitude doesn’t have that convening and conciliatory power, I wonder what will. Dr. Andreas Krieg, thank you so much for speaking to us today. It’s been a pleasure.

ANDREAS KRIEG: Pleasure.

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