The War of the Gulfs: Saudi Arabia’s Dangerous Pivot

From a Joint Leadership to a Battle for Supremacy

“He who partners with a donkey should expect nothing but kicks.” — Indian Proverb

Saudi Arabia has fundamentally altered the trajectory it traveled for the past decade. The climax of that original path was supposed to be a historic peace treaty with Israel - a move that would have solidified an Israeli-Emirati-Saudi axis standing firm against Iran.

However, Riyadh surprised the world. In July 2023, Saudi Arabia opted for a different kind of “detente” with its greatest rival, Iran. Brokered in Beijing under Chinese auspices, the deal was a massive strategic blindside to both Washington and Jerusalem. The two nations agreed to restore diplomatic ties severed in 2016, reopen embassies, and respect each other’s sovereignty without internal interference. They even dusted off old agreements: a 2001 security cooperation pact and a 1998 economic and cultural treaty.

For Saudi Arabia, this was a bid for “industrial quiet” to focus on its “Vision 2030” economic overhaul. For Iran, it was a lifeline to break its international isolation.

Illustration by Yaniv Weissman

This pivot extended to the Houthis in Yemen, who had previously struck the Kingdom with devastating precision. By late 2023, the UN announced a “peace roadmap” that included a permanent ceasefire and the payment of public salaries using oil and gas revenues. Saudi Arabia is now actively withdrawing its forces from Yemen, effectively leaving the Houthis as the dominant power in the north. The goal is simple: stop the missiles from falling on Saudi soil. By doing so, Riyadh has made a diplomatic deal with Israel redundant. Instead, it is now designing a regional coalition explicitly counter-positioned against Israel and the United Arab Emirates.

The Foundation: An Absolute Monarchy

To understand this shift, one must consider the unique nature of the Kingdom of Saudi Arabia. It is the world’s last remaining great absolute monarchy, born from a deep fusion of tribal political power and conservative religious ideology.

The First Saudi State (1744–1818) was founded in Diriyah through a historic pact between Muhammad ibn Saud—the political leader—and Muhammad ibn Abd al-Wahhab—the cleric. This alliance birthed “Wahhabism,” a rigid interpretation of Islam that provided religious legitimacy for tribal conquest. That state was eventually crushed by the Ottomans and Egyptians.

The Second Saudi State (1824–1891) managed to hold on for several decades in the Nejd region before collapsing due to internal succession wars and conquest by the rival Al-Rashid tribe.

The Third Saudi State (The Modern Kingdom) began in 1902, when a young Abdulaziz ibn Saud recaptured Riyadh in a daring raid. Over three decades, he unified the tribes, conquered the Hejaz (Mecca and Medina), and in 1932 declared the modern Kingdom. By 1925, Ibn Saud’s forces had ended Hashemite rule in the peninsula. The Jordanian King was left with what many considered a “shabby inheritance”—a desert territory that was part of Mandatory Palestine. Indeed, the British created the problem, attempting to appease all tribes in the region simultaneously.

Credit: https://upload.wikimedia.org/wikipedia/commons/0/04/Saudi_Arabia_map.png

The Oil Trap and the American Divorce

Since then, Saudi Arabia has been a “one-trick pony” fueled by oil. The global necessity of petroleum granted Riyadh its international stature. During the Cold War, the Americans protected the Kingdom to ensure oil flowed to allies in Europe and the Far East. For years, Washington balanced its economic and security interests against the religious extremism simmering within the Kingdom. Even ARAMCO—the world’s largest energy company—began as the Arabian American Oil Company before it was eventually nationalized.

For decades, the Saudi government has essentially paid its citizens not to work. It was easier for the monarchy to have them sit, consume, and live comfortably rather than trouble the regime. The data is stark: out of roughly 18 million workers in the Saudi labor market, only about 4 million are actually Saudis. The rest are foreign laborers. Domestic workers alone make up nearly 23% of the workforce, almost all of them foreigners.

When we see massive American delegations - including figures like Donald Trump and high-tech CEOs - arriving in Riyadh to declare investments in AI, technology, and science, it remains largely performative. There is simply no local workforce capable of driving the investments declared in those press conferences. So why do they go? Because the U.S. has a massive debt, and Saudi capital helps manage it. Furthermore, the Saudis hold the American industrial complex—specifically Boeing—by the throat. Saudi Arabia has ordered 79 Boeing jets and is expected to order another 70. They even secured a promise from the Trump administration for F-35s and a major non-NATO ally defense pact.

But the race for supremacy is breaking under the weight of Crown Prince Mohammed bin Salman’s (MBS) dreams. The U.S. shale revolution has made Middle Eastern oil optional for America. Saudi Arabia has lost its senior political leverage. Between 2015 and 2019, Riyadh tried to crash oil prices to kill off American producers, but U.S. technology improved, allowing firms to stay profitable even below $30 a barrel.

The Saudis, meanwhile, were bled dry by the price drop. North America now has enough oil for decades, and the U.S. has surpassed both Russia and Saudi Arabia as the world’s largest oil exporter.

This brings us to NEOM, the “city of the future.” Originally budgeted at $500 billion, current 2026 estimates now place the total cost closer to $1.5 trillion. The government has finally admitted that by 2030, only 2.4 kilometers of the 170-kilometer “Line” will be finished. Instead of 1.5 million residents, they expect only 300,000. Due to the astronomical costs of hosting the 2034 World Cup and Expo 2030, the government has “slowed down” parts of NEOM that aren’t critical. In short, “Project 2030” is being forced to recalculate its route.

The New Islamic Axis: A Red Sea Cold War

The Middle East of January 2026 is unrecognizable. The tight alliance between Riyadh and Abu Dhabi, once seen as the backbone of the Sunni world, has disintegrated into a “Cold War” of clashing egos and interests. From Yemen to Sudan, Saudi Arabia is now building a new regional coalition designed to isolate the “Abu Dhabi-Jerusalem axis.”

Riyadh is forging a new “Red Sea Axis” with Turkey, Egypt, and Pakistan, while bringing Iran and Qatar into the fold. Saudi Arabia is using three tools to isolate the UAE and Israel:

1. State Legitimacy: Unlike the UAE, which Riyadh accuses of supporting militias and separatists, Saudi Arabia positions itself as the defender of Arab state integrity.

2. The Palestinian Card: Riyadh has made a Palestinian state a non-negotiable condition for normalization, painting the UAE’s Abraham Accords as a “shallow peace” that harms collective Arab interests.

3. The Iranian Shield: By engaging with Tehran, Saudi Arabia makes a defense pact with Israel unnecessary, leaving the UAE isolated in its security architecture against Iran.

The recent recognition of Somaliland by Israel and the UAE is seen by Riyadh as a direct threat—a move to shift control from Saudi Arabia to the UAE. To Riyadh, the strategy is clear: Israel and the UAE are pursuing a “fragmentation strategy” on both sides of the Red Sea to control naval chokepoints and weaken regional sovereignty.

Conclusion: History Repeats Itself

Saudi Arabia’s vision of an independent Islamic power pole—independent of the West and neutralizing the Israeli-Emirati influence—is central to its future. By combining Turkish tech, Saudi capital, and Pakistani nuclear deterrence, Riyadh hopes to create a block immune to external pressure.

But Saudi Arabia is taking a massive risk by allowing Turkey to assume the role of its “protector” against Israel and the UAE. Turkey’s thirst for energy and regional dominance is historic. Ankara has its eyes on the oil fields of the Persian Gulf. Turkey’s military “protection” will eventually come with a price tag: soft control today, hard control tomorrow.

The Saudis may find that in their rush to kick their former allies, they have partnered with a much more dangerous animal. History, it seems, is repeating itself.

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