Exclusive-Some UAE companies pull out of Saudi defence show as Gulf rift spills into business

Some UAE companies have pulled out of a major defence show taking place in Saudi Arabia, two sources with direct knowledge of the matter told Reuters, the latest sign that a rift between the two Gulf oil powers is seeping into business interests.

The World Defense Show is set to take place in the Saudi capital of Riyadh from February 8-12. It was not immediately clear if all the UAE participants involved in the country pavilion had withdrawn. 

There was no immediate comment by the UAE foreign ministry or the Saudi government media office on the matter.

TRICKLE DOWN EFFECT 

Once the twin pillars of regional security, the two Gulf heavyweights Saudi Arabia and the UAE have seen their interests diverge on everything from oil quotas to geopolitics.

Their disagreements came out into the open in December when an advance by a UAE-backed southern Yemeni separatist group brought it too close to Saudi borders for comfort and quickly escalated to a Saudi-led coalition strike on a UAE-linked weapons shipment at the port of Mukalla. 

The UAE has since withdrawn all its forces from Yemen but tensions have grown with Saudi Arabia alleging the UAE had helped a main Yemeni separatist figure escape through Somalia. 

The UAE withdrawal from a major annual defence event shows the disagreement between the two oil powers could spill over into the many trade and investment relations that bind them together. 

While cross-border dealmaking remains largely unaffected for now, tensions are starting to trickle down to the business community which has been quietly preparing for potential disruptions even as day-to-day commerce continues, two Gulf-based business sources have said.