The Issue
Just a year ago, Israel’s nascent ties with the UAE were rapidly developing, amid high hopes for the wider changes they might bring. But with still no end in sight to the carnage in Gaza, live-streamed on Arabic TV, those ties face their toughest test. Protests are prohibited in the UAE, whose leadership has made clear that it remains committed to normalization — agreed under the 2020 Abraham Accords — given the long-term strategic interests it serves. But Gulf anger over the Gaza war has changed the trajectory of the relationship.
Thwarted Gas Plan
Israeli gas producer NewMed Energy confirmed in a filing on Wednesday that talks on a $2 billion joint offer by the Abu Dhabi National Oil Co. (Adnoc) and BP to take a 50% stake in the company had been suspended “due to the uncertainty created by the external environment.” There had been growing doubts about the deal’s prospects, relating to the financial terms as well as the dramatic change in the political climate since Adnoc announced the bid a year ago. But the news underlines how the Israeli-Palestinian conflict has at the very least complicated Emirati investment in Israel, and business between the two countries more generally.
“We are not necessarily at breaking point. But we are definitely not at a point where the UAE expected to be three or four years ago when it signed the Abraham Accords,” Emirati analyst Abdelkhaleq Abdulla told Energy Intelligence.
The energy sector — gas and solar in particular — has been a key focus of the evolving economic ties. And there has been no suggestion that Abu Dhabi’s sovereign wealth fund Mubadala is reviewing its 22% stake in the Tamar gas field, which it acquired in 2021 for $1 billion — in what remains the biggest commercial outcome of normalized relations between Israel and the UAE.
At a Crossroads
Technology and defense were seen as two other key areas where bilateral collaboration was set to grow, to the benefit in particular of Israel’s defense industry. Just a year ago, in an 84-page report published by UK think tank Chatham House, they were described as “the bedrock of the future Israeli–Emirati relationship.” Partnerships like the one agreed in 2021 between Israel’s state-owned Rafael Advanced Defence Systems and Abu Dhabi-based tech firm G42, which is chaired by the UAE’s national security adviser, reflected the proximity of Abu Dhabi’s ruling family to Israel’s security establishment, the report noted. Expanding such accords will be more controversial now.
“Overall, it’s a relationship that is at a crossroads, and it is not viewed very well from the UAE side,” said Abdulla. For him, it’s not just about Gaza. As long as the far-right government of Israeli Prime Minister Benjamin Netanyahu is in power, the relationship “is not going anywhere.”
Strategic Interests
But others argue that the UAE’s underlying strategic interests have not fundamentally changed. Indeed, containing regional Iran-linked threats — not least the Red Sea chaos caused by Yemen's Iran-backed Houthis — remains a crucial shared goal of Israel and the UAE, despite Abu Dhabi's extensive trade ties and restored diplomatic relations with Tehran. Vessels with ties to Israel have been squarely in the crosshairs of Houthi attacks, but the UAE has steadily developed its presence in and around the Red Sea, as well as increased its oil shipments to Europe, which are vulnerable too.
Another vital strategic aspect of the relationship, according to UAE expert Neil Quilliam, who co-authored the Chatham House report, is the leverage it gives the UAE in its dealings with the US — a major partner and long-time guarantor of regional security that has been seeking to deprioritize the Middle East. The US, which brokered the Abraham Accords, has long sought to strengthen Israel’s ties with its other partners in the region, including Saudi Arabia. That prospect is now firmly on hold as hostility toward Israel across the Arab world has soared since Oct. 7, which also increases the relative importance of the Israel-UAE partnership.
“Leveraging up the relationship with Israel so they can embed themselves much closer to the US, that’s been a key goal for the UAE ... [It means] having a situation where [the UAE] can manage the region with a lighter US footprint, as the US projects further east,” says Quilliam.
Colder Peace
The possibility of opening a land corridor connecting the UAE’s Jebel Ali port and Haifa in Israel, via Saudi Arabia and Jordan, is one area of cooperation that offers huge potential benefits beyond the interests of the two countries, given the disruptions to global trade via the Red Sea. The plan had gained some traction with the unveiling, on the sidelines of the G20 summit in September, of the proposed India-Middle East-Europe Economic Corridor initiative. Israeli media fueled speculation with reports that two trucking firms began a trial phase of the new transport route in December. But those reports remain unsubstantiated, and Jordan has denied them.
A key test for the Israel-UAE relationship will be the ease with, which private Israeli businesses can set up in Dubai. Analysts suggest that rather than an edict being given to stop Israeli companies from operating, bureaucratic delays in the approvals process are a more likely scenario. Quilliam argues that normalization was a state-to-state agreement that would survive beyond the Gaza war and the Netanyahu government. “But it’s not going to be the warm peace that the Emirati and Israeli governments [envisaged]. And it’s not going to be a cold peace, like with the Egyptians and the Jordanians. It’s going to be somewhere between the two.”