Media365
Saudi Arabia has been blocking or delaying some financial transfers from banks in the kingdom to accounts in the United Arab Emirates (UAE), raising fresh concerns that worsening political tensions between the Gulf’s two largest economies are beginning to affect cross-border business and trade, according to a report by the Financial Times.
The report, citing multiple executives and people familiar with the matter, said payments from Saudi entities to UAE-based bank accounts, particularly those belonging to companies and individuals operating from Dubai, have been either delayed or returned since May without any official explanation.
The development has unsettled businesses that rely on Dubai as a regional hub to serve the Saudi market, one of the Middle East’s largest economies.
A Western executive at a Dubai-based healthcare company told the Financial Times that three separate payments from a long-standing Saudi customer had been blocked by Saudi banks since mid-May.
According to the executive, the payments were typically held for about a week before being returned without any queries being raised by either the sender’s or recipient’s bank.
The executive said even attempts by the Saudi client to transfer funds personally had failed.
“They are saying there’s a block from the Saudi central bank and they can’t really give more detail than that,” the executive told the newspaper.
Saudi central bank denies country-specific restrictions
Responding to the report, Saudi Arabia’s central bank said the country’s financial system operates under a “robust regulatory framework” and denied imposing restrictions targeting any specific country.
“There are no direct restrictions on specific countries; banks apply risk-based measures consistently across all transactions to safeguard the integrity of the financial system,” the central bank said in a statement cited by the Financial Times.
However, several executives told the newspaper they had encountered similar payment issues in recent weeks.
One Dubai-based executive said payments from a Saudi customer were now taking much longer than usual.
“We have a customer waiting for goods, but the payment is not happening,” the executive said, adding that many suppliers serving Saudi Arabia operate out of the UAE.
Another Emirati businessman reportedly had to reroute payments through Bahrain after transfers from Saudi Arabia repeatedly failed.
A Dubai-based services provider also told the newspaper that after a payment from a Saudi client was cancelled without explanation, both parties resorted to using PayPal despite the higher transaction costs.
A senior banking executive also confirmed that a multinational company had faced difficulties transferring funds from Saudi Arabia to another company based in the UAE.
According to the report, even relatively small transactions — not just large corporate payments — had been affected.
Trade worth over $20 billion at stake
Saudi Arabia and the UAE share one of the Middle East’s closest commercial relationships, with annual bilateral trade exceeding $20 billion.
Many multinational companies use Dubai as their regional headquarters while conducting substantial business in Saudi Arabia, making uninterrupted financial flows critical for commerce.
Despite the reported payment issues, executives told the Financial Times that flights between the two countries remain busy and broader commercial activity continues.
Political tensions have intensified
The payment disruptions come against the backdrop of worsening political relations between Riyadh and Abu Dhabi.
Tensions escalated after Saudi Arabia accused the UAE of backing a secessionist faction in Yemen that launched an offensive against Saudi-aligned forces in December.
The dispute marked the biggest rupture between the Gulf neighbours in decades, exposing deeper disagreements over regional conflicts and growing economic rivalry.
Although the recent conflict involving Iran temporarily encouraged Gulf countries to present a united front, analysts told the newspaper that underlying tensions never disappeared.
Relations came under further strain after the UAE announced in late April that it would leave OPEC, ending its membership in the oil-producing alliance led by Saudi Arabia.
The UAE maintained that the decision reflected its evolving economic and energy strategy, but the move was widely interpreted as a setback for Saudi Arabia’s leadership within the organisation.
UAE says no formal complaints received
An Emirati official told the Financial Times that the UAE’s economy ministry had not received complaints from private-sector companies regarding unusual delays in 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 remain engaged with businesses and would review any specific concerns raised through official channels.
While neither government has acknowledged any disruption to bilateral financial flows, the reported delays have heightened concerns among businesses that political disagreements could increasingly spill over into trade and investment, potentially complicating commercial ties between two of the Arab world’s largest economies.
