The United Arab Emirates (UAE) has tempered its reaction to attacks on oil tankers off its coast in a bid to protect its reputation as a safe and stable business hub.
While Saudi Arabia on Tuesday unleashed a barrage of tweets accusing their mutual enemy of ordering drone strikes on its oil installations, the UAE held off on blaming anyone for Sunday’s attacks pending an investigation.
Abu Dhabi pledged restraint and de-escalation during what it called a “difficult situation” caused by Iranian behavior in the region.
Iran has distanced itself from the attack, which no one has claimed. Yemen’s Iran-aligned Houthis said that they carried out the drone strike on Saudi Arabian oil pumping stations.
The divergent approaches illustrate the complexities of dealing with Iran.
Both have lobbied the US to isolate Tehran and the two spearhead a military coalition backing Yemen’s internationally recognized government against the Houthis.
“Sometimes you need to be diplomatic; we can’t destroy our economy’s reputation,” a UAE oil source said when asked why the initial statement mentioned commercial vessels and not oil tankers.
It was Saudi Arabia’s energy minister who revealed that two tankers had been attacked.
As Washington and Tehran spar over sanctions and US military presence, the UAE is balancing curtailing Iran with protecting its economic interests.
A Western diplomat said that the UAE was taking a guarded approach, because it does not want “trouble at its doorstep.”
“The UAE is far more pragmatic and strategic, and has more to lose. Saudi Arabia is the bigger concern for Iran,” another diplomat said.
The UAE, where expatriates are a majority of the population, shared Riyadh’s goals, but unlike the kingdom has a diversified economy more exposed to regional shocks, Western diplomats said.
“UAE authorities are trying to find a fine balance, because this a business hub. You don’t want to prick the bubble,” a Dubai-based banker said. “The right sounds are being made... No alarm bells.”
Dubai is more vulnerable. It has been pinched by a Saudi Arabia-led boycott on Qatar and US sanctions on Iran, for which Dubai was a traditional trade hub.
The emirate is suffering a property downturn and a slowdown in retail as it gears up to host the World Expo trade fair next year.
“It doesn’t pose many risks to Abu Dhabi... but a substantial risk to Dubai, which relies on international businesses and real-estate buyers feeling safe there,” said Steffen Hertog, associate professor at the London School of Economics and Political Science.
“Just tanker incidents are unlikely to affect tourism and business though; it would probably take an attack involving civilian casualties to substantially shift the mood,” he added.
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