Financial tensions between Saudi Arabia and the United Arab Emirates appear to be affecting businesses as companies report delays and blocked bank transfers between the two Gulf neighbours, according to a report by the Financial Times.
Multiple individuals and executives told the Financial Times that payments from Saudi entities to bank accounts in the UAE have since May been delayed, returned or blocked by Saudi banks, with some saying they were given no clear explanation for the disruptions.
A Western executive at a Dubai-based healthcare company said three payments from a Saudi client, with whom the company had maintained a business relationship for several years, were blocked and returned by Saudi banks from mid-May.
The executive said the funds were usually held for about a week before being returned without any questions being raised with either the sender or recipient.
“They’ve even tried to make a transfer personally but that gets blocked too,” the executive said. The Saudi customers, according to the executive, received unclear responses from their banks and were told that the issue involved restrictions from the Saudi central bank.
Saudi Arabia’s central bank rejected the suggestion that there were direct restrictions targeting specific countries. It said the financial sector operated under a strong regulatory framework and that banks applied risk-based measures consistently across transactions to protect the integrity of the financial system.
Another Dubai-based executive said payments from Saudi businesses had become significantly slower, affecting the ability of suppliers to deliver goods.
“We have a customer waiting for goods, but the payment is not happening,” the executive said. “A lot of suppliers [for Saudi Arabia] come from the UAE, by doing this they are shooting themselves in the foot.”
Saudi Arabia and the UAE have the largest economies in the Arab world and maintain extensive commercial ties, with annual bilateral trade exceeding $20bn. Many international companies use Dubai as a base for operations serving Saudi Arabia, while business travel between the two countries remains active.
However, relations between the two countries have deteriorated in recent months following disagreements over regional politics, economic competition and strategic priorities.
Tensions intensified after Riyadh accused Abu Dhabi of supporting a Yemeni separatist faction that launched an offensive against Saudi-backed forces in Yemen in December. Saudi Arabia said the UAE’s actions threatened its national security interests, despite the two countries previously being close partners in the Saudi-led coalition that intervened in Yemen’s civil war in 2015.
The dispute represented the most serious breakdown in relations between the Gulf neighbours in decades and added to existing differences over economic competition and approaches to regional conflicts.
The tensions appeared to ease temporarily after the United States and Israel’s conflict with Iran prompted Gulf states to present a more united position amid concerns over regional security. However, analysts said the underlying disagreements remained unresolved.
The relationship was further strained in April when the UAE announced its withdrawal from OPEC, the oil producers’ group led in practice by Saudi Arabia. Abu Dhabi said the decision reflected its economic strategy and changing energy priorities, but the move was widely viewed as a setback for Riyadh after years of disagreements over production quotas.
Saudi officials have previously maintained that political differences with the UAE would not affect economic and trade relations.
An Emirati government official said the UAE’s Ministry of Economy had not received complaints from private-sector companies regarding unusual delays or difficulties with bank transfers between the two countries.
“The UAE and Saudi Arabia maintain deep and longstanding economic and commercial ties,” the official said, adding that authorities remained engaged with businesses and would review any specific concerns submitted through official channels.
Despite those assurances, several businesspeople said they had experienced unexplained disruptions. One Emirati businessman said his company was forced to reroute payments through Bahrain after transfers from Saudi Arabia were blocked.
A Dubai-based services provider said a payment from a Saudi client was cancelled last month, forcing the company to use the more expensive alternative of PayPal. The provider said neither side received information beyond a notification that the transaction had failed.
A senior banking executive also said a multinational company had experienced difficulties transferring funds from Saudi Arabia to another company in the UAE.
“You have some transfers that were stopped, it was very bizarre,” the executive said, adding that some affected transactions involved relatively small amounts rather than large corporate payments.
Another person familiar with the issue said individuals transferring money between their own accounts, or sending funds to relatives and friends, had also encountered problems in recent weeks.
The reports come as Saudi Arabia and the UAE attempt to manage a relationship that remains economically interconnected but increasingly shaped by political and strategic disagreements. For businesses operating across the Gulf, uncertainty over financial transfers has become a new challenge in maintaining cross-border trade.
