The Saudi Arabia-UAE rift that froze OPEC is a sign of things to come, experts say

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4 years ago

August 2, 2021

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RIYADH, SAUDI ARABIA – JULY 19: (—-EDITORIAL USE ONLY â MANDATORY CREDIT – ” ROYAL COURT OF SAUDI ARABIA / HANDOUT” – NO MARKETING NO ADVERTISING CAMPAIGNS – DISTRIBUTED AS A SERVICE TO CLIENTS—-) Crown Prince of the United Arab Emirates (UAE) Mohammed bin Zayed Al Nahyan (L) meets with Crown Prince of Saudi Arabia Mohammed bin Salman (2nd L) within his visit in Riyadh, Saudi Arabia on July 19, 2021. (Photo by Royal Court of Saudi Arabia/Handout/Anadolu Agency via Getty Images)

Anadolu Agency | Anadolu Agency | Getty Images

DUBAI, United Arab Emirates — The unexpected rift between Saudi Arabia and the United Arab Emirates within OPEC in early July came as a shock to many in the Gulf region and those watching from abroad.

The dispute over oil production levels temporarily froze the group’s ability to lay out their plans for the markets, sending crude prices upward. But it wasn’t the first appearance of tension between the Arab neighbors and longtime close allies, and likely will not be the last, experts who’ve long been watching the region say.

“What is happening here is these are the two biggest economies in the region, in the Arab world,” Abdulkhaleq Abdulla, a political science professor in the UAE, told CNBC. “And as Saudi Arabia wants to reform its economy, privatize, etc, there is bound to be competition between them.”

“Competition between the two biggest Arab economies is, I think, just starting,” Abdulla said. “And it is bound to intensify in the days to come.”

Conflicting interests

The strategic alignment between Riyadh and Abu Dhabi, both of which have become increasingly active on the world stage, is evident in many areas. And it’s often associated with what is said to be a close relationship — some have even called it a “bromance” — between Saudi Crown Prince Mohammed bin Salman and his Emirati counterpart Mohammed bin Zayed.

But conflicting interests have cropped up in recent months that preceded the OPEC rift. In February, Saudi Arabia announced that its government would cease doing business with any international companies whose regional headquarters were not based within the kingdom by 2024. The move was widely seen as targeting Dubai, the Middle East’s current headquarters hub.

Bahrain Foreign Minister Abdullatif bin Rashid Al Zayani, Israeli Prime Minister Benjamin Netanyahu, U.S. President Donald Trump and UAE Foreign Minister Abdullah bin Zayed Al Nahyan (L to R) attend a signing ceremony for the agreements on “normalization of relations” reached between Israel, the United Arab Emirates and Bahrain at the White House in Washington.

The White House | Shealah Craighead | Anadolu Agency | Getty Images

DUBAI, United Arab Emirates — The UAE last year announced a normalization deal with Israel, becoming the first Gulf country to do so, while Saudi Arabia has so far publicly refused to do the same. Saudi Arabia meanwhile has been working on a tentative rapprochement with rival Sunni power Turkey, with which the UAE has significant tensions as Ankara supports an Islamist ideology that Emirati leaders see as a threat.

And the two Gulf powers had some diverging interests in the war in Yemen, despite being on the same side, with the Saudis supporting an Islamist party distrusted by the UAE and Abu Dhabi supporting separatist tribes that did not align with Riyadh’s goals. The UAE drew down its military activity in Yemen in 2019, while Riyadh remains embroiled in the conflict.

“It has been a common assumption that the UAE and Saudi Arabia have effectively indistinguishable worldviews and interests — that the UAE is sort of an appendage or dependency of Saudi Arabia,” Hussein Ibish, a senior resident scholar at the Arab Gulf States Institute in Washington, wrote in a blog post in July. “That has never been the case.”

Economic consequences

In early July, Saudi Arabia upped the ante by ending preferential tariffs for goods made in free zones or affiliated with Israeli manufacturers, also seen as a direct shot at the UAE, which is the free zone hub of the region. The move was followed by waves of patriotic Saudis launching a campaign via Twitter to boycott Emirati goods.

This came despite the fact that the UAE is Saudi Arabia’s second-largest trading partner after China by import value.

“The idea once was to create a GCC market, but now there’s the realization that the priorities of Saudi Arabia and the UAE are very different,” Amir Khan, senior economist at Saudi National Bank, told Reuters in July. “This regulation is putting flesh on the bone of these political divergences,” Khan said.

So, where do things go from here?

An OPEC deal was reached in mid-July, and the Saudi and Emirati energy ministers praised each other and the work of the group of oil producers. Still, economic competition — at a time where returns for oil-producing nations are extremely volatile — isn’t set to go away anytime soon.

“We’re coming out of this pandemic where every country in the world needs to figure out a way to economically recover,” Tobias Borck, a research fellow specializing in Gulf affairs at the Royal United Services Institute in London, told CNBC. “But for the Gulf monarchies, especially for Abu Dhabi and Saudi Arabia, that is compounded by the fact that they are also under pressure to figure out a way to transform their economies and get away from relying on oil.”

“In that environment, quite frankly, everyone is going to look after number one,” Borck continued. “And for all the genuine friendship and continued pragmatic alignment, when it comes to economic matters, at some point that friendship ends and it becomes about looking after yourself.”

A ‘collision course’

For the Emirati professor Abdulla, “rivalry is too strong of a term” to describe what’s going on between the two countries.

“It could be a controlled, managed, friendly competition,” he told CNBC. “Or it could get out of hand, and we will see it intensify in the months and years to come. We are still in the first five minutes of the competition. We don’t know how it is going to evolve — and it might have some impact on the political issues that bind the two countries together, some political spillover.”

“There are clearly multiple areas where they are on a collision course in the economic sphere,” Borck said. “You’ve now sort of put your position out, and at the moment, those positions are on a collision course. Whether they’re going to remain so? We’ll see.”

Environment

CNBC Daily Open: The Warner Bros. Discovery deal — a cliffhanger in the making?

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2 hours ago

December 9, 2025

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CNBC Daily Open: The Warner Bros. Discovery deal — a cliffhanger in the making?

A view of the water tower at Paramount Studios on Oct. 30, 2025 in Los Angeles, California.

Mario Tama | Getty Images

Paramount Skydance on Monday launched a hostile takeover bid for Warner Bros. Discovery, following Netflix’s announcement last week that it had reached a deal to buy the HBO owner.

The company is “here to finish what we started,” CEO David Ellison told CNBC, upping the ante with a $30-per-share, all-cash offer compared to Netflix’s $27.75-per-share, cash-and-stock offer for WBD’s streaming and studio assets.

Investors were certainly pleased, sending Paramount shares 9% higher and WBD’s stock up 4.4%.

Another development that traders cheered was U.S. President Donald Trump permitting Nvidia to export its more advanced H200 artificial intelligence chips to “approved customers” in China and other countries — so long as some of that money flows back to the U.S. Nvidia shares rose about 2% in extended trading.

Major U.S. indexes, however, fell overnight, as investors awaited the Federal Reserve’s final rate-setting meeting of the year on Wednesday stateside. Markets are expecting a nearly 90% chance of a quarter-point cut, according to the CME FedWatch tool.

Rate-cut hopes have buoyed stocks. “The market action you’ve seen the last one or two weeks is kind of essentially baking in the very high likelihood of a 25 basis point cut,” said Stephen Kolano, chief investment officer at Integrated Partners.

But that means a potential downside is deeper if things don’t go as expected.

“For some very unlikely reason, if they don’t cut, forget it. I think markets are down 2% to 3%,” Kolano added.

In that case, investors will be waiting, impatiently, for the Fed meeting next year — hoping for a more satisfying conclusion.

What you need to know today

And finally…

People walk past the New York Stock Exchange in New York City, U.S., April 4, 2025.

Kylie Cooper | Reuters

Private credit is beginning to look like the bond market — and that comes with red flags

Once restricted to a niche corner of lending to mid-sized firms, private credit has expanded across sectors, borrower sizes and collateral types, prompting large allocators to treat it increasingly as part of the same opportunity set as high-yield bonds and leveraged loans, said experts.

The blending of the two markets raises worries. With more private lenders chasing fewer blockbuster deals, competition is pushing underwriting standards to look more like the looser norms seen in syndicated markets pre-2020, experts warned.

— Lee Ying Shan

Environment

US solar tops 11.7 GW in a huge Q3 despite political roadblocks

Published

5 hours ago

December 9, 2025

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US solar tops 11.7 GW in a huge Q3 despite political roadblocks

The US solar industry just delivered another huge quarter, installing 11.7 gigawatts (GW) of new capacity in Q3 2025. That makes it the third-largest quarter on record and pushes total solar additions this year past 30 GW – despite the Trump administration’s efforts to kneecap clean energy.

According to the new “US Solar Market Insight Q4 2025” report from Solar Energy Industries Association (SEIA) and Wood Mackenzie, 85% of all new power added to the grid during the first nine months of the Trump administration came from solar and storage. And here’s the twist: Most of that growth – 73% – happened in red states.

Eight of the top 10 states for new installations fall into that category, including Texas, Indiana, Florida, Arizona, Ohio, Utah, Kentucky, and Arkansas. Utah jumped into the top 10 this quarter thanks to two big utility-scale projects totaling more than 1 GW.

But the report also flags major uncertainty ahead. Federal actions, including a July memo from the Department of the Interior (DOI), have slowed or stalled the approvals pipeline for utility-scale solar and storage. Without clarity on permitting timelines, Wood Mackenzie’s long-term utility-scale forecast through 2030 remains basically unchanged from last quarter.

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“This record-setting quarter for solar deployment shows that the market is continuing to turn to solar to meet rising demand,” said Abigail Ross Hopper, SEIA’s president and CEO. She added that strong growth in red states underscores how decisively the market is shifting toward clean energy. “But unless this administration reverses course, the future of clean, affordable, and reliable solar and storage will be frozen by uncertainty, and Americans will continue to see their energy bills go up.”

Two new solar module factories opened this year in Louisiana and South Carolina, adding a combined 4.7 GW of capacity. That brings the total new US module manufacturing capacity added in 2025 to 17.7 GW. With a new wafer facility coming online in Michigan in Q3, the US can now produce every major component of the solar module supply chain.

“We expect 250 GW of solar to be installed from 2025 to 2030,” said Michelle Davis, head of solar research at Wood Mackenzie and lead author of the report. “But the US solar industry has more potential. With rising power demand across the country, solar could do even more if current constraints were eased.”

SEIA also noted that, following an analysis of EIA data, it found that more than 73 GW of solar projects across the US are stuck in permitting limbo and at risk of politically motivated delays or cancellations.

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Environment

It’s happening: Chevy Spark EUV production kicks off in Brazil

Published

7 hours ago

December 9, 2025

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It's happening: Chevy Spark EUV production kicks off in Brazil

Chevy Spark EUV Production Officially Begins In Brazil

The spiritual successor to the beloved Chevy Geo Tracker, production of the new-for-2026 electric Spark EUV has officially begun in Brazil with more than 200 miles of range.

That’s right, kids. To know the Chevy Tracker is to love the Chevy Tracker. The tiny, top-heavy Suzuki-based SUV combined bold colors, fun styling, (relatively) good fuel economy, and real off-road chops (especially in ZR2 trim) with an affordable price tag to make the Tracker an early favorite among the serious rock-crawling crowds.

Like, really

2001 Chevy Tracker; via Harry Situations.

While it’s still too early to tell whether or not the all-new Chevy Spark EUV will come even close to that little proto-SUV, it seems we won’t have to wait much longer to find out – GM Authority reports that production of the 2026 Chevy Spark EUV has officially begun at Comexport’s Planta Automotiva do Ceará (PACE) plant, in the state of Ceará, Brazil.

GM Brazil invested the equivalent of $73 million to get the PACE factory ready to assemble GM’s modern, zero-emissions Chevy crossover for the South American and Middle Eastern markets – an investment big enough to earn a visit from Brazilian president Luiz Inácio Lula da Silva, who was on-hand for the December 3rd kickoff event.

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“It’s not a car factory,” said Comexport Vice President and PACE shareholder, Rodrigo Teixeir. “(The) goal is to develop technology there, not simply assemble a vehicle.”

Production of the new Spark EUV began last week, with production of the equally new Chevy Captiva EV set to begin as early as Q1 of 2026.

2026 Chevy Spark EUV

The Made in Brazil Chevrolet Spark EUV is heavily based on the Chinese Baojun, and is powered by that vehicle’s single 75 kW (101 hp), 180 Nm (130 lb-ft) motor driving the front wheels. Power comes from the Baojun’s 42 kWh LFP battery that, with regenerative braking, is good for up to 360 km (220 miles) on the NEDC driving cycle.

Weirdly, the new Spark is also equipped with a 10.1″ infotainment screen and 8.8″ digital instrument cluster (above) that supports both Apple CarPlay and Android Auto standard – technology that GM claims lead to “unsafe” driver behaviors in North America.

Let us know what you think of the little electric SUV, and whether or not you think it would be a hit in the US (it would) in the comments.

SOURCE: GM Authority; images by GM, Harry Situations.

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