Russia and UAE double down on trade, testing U.S. limits

DUBAI, United Arab Emirates — United Arab Emirates President Mohammed bin Zayed al Nahyan traveled to Russia on Thursday for his second visit to the country in less than a year, to meet with Russian President Vladimir Putin in a sign of the ever-strengthening ties between the two states.

The trip, according to Emirati state media service WAM, is focused on the two countries’ “strategic partnership” and on “ways to enhance cooperation, particularly in the economic, trade, investment, energy, and other areas that serve joint development, in addition to regional and international issues of common interest.”

The UAE is a longtime close ally of the United States and a major military and intelligence partner. It is also Russia’s most important economic partner in the Middle East — and trade between the two has ballooned in recent years, particularly since the start of Russia’s war against Ukraine. Russia-UAE trade jumped by 68% year-on-year in 2022 to $9 billion, Russia’s trade ministry said in February.

Now, “the trade turnover between Russia and the UAE reached $11.5 billion,” the UAE leader said during talks with Putin on Thursday, according to Russian state media outlet Tass.

Bin Zayed told his Russian counterpart: “We would like this figure to be doubled both at the bilateral level and with Eurasian countries during the next five years,” adding that relations between the two countries “are developing at an accelerated pace.”

Russia and the UAE signed a strategic partnership in 2018, and numerous visits between their leaders have been exchanged since then.

Abu Dhabi has not officially taken a side on the Russia-Ukraine war, instead calling for peace and an end to the fighting. It has also refused to partake in Western sanctions against Russia, providing a safe haven for Russian oligarchs and expatriates fleeing both sanctions and mandatory conscription. Some 4,000 Russian businesses operate in the UAE, according to reports, and foreign direct investment between the two has steadily increased.

The visit by the UAE leader to Moscow “says the UAE values its strategic partnership with Russian and will to continue to deepen ties with Russia,” Anna Borshchevskaya, a senior fellow at The Washington Institute focused on Russia’s policy toward the Middle East, told CNBC.

“As before, the UAE wants to continue to maintain a diversified foreign policy overall between Russia, the United States, and China, rather than choose only one.”

The UAE leader’s visit also comes as the White House announced an upcoming meeting between U.S. President Donald Trump and Putin to discuss Ukraine war ceasefire efforts — and in the wake of Trump announcing punitive tariffs on India for importing Russian oil, which the American leader says is “fuelling the war machine.”

For Russia, the ongoing relationship with the UAE is a win and is also “clearly a sign that they are not nearly as isolated as the West would like them to be both diplomatically and economically,” said Ryan Bohl, a senior Middle East and North Africa analyst at Rane.

“The UAE is also a key part of Russia’s efforts to bypass Western sanctions. For [UAE leader] MBZ on a political front, this is a demonstration that he is independent of Washington, despite relying on American forces for security,” Bohl said, referring to Mohammed bin Zayed by his initials.

The U.S. has in the past expressed frustration with the UAE’s enabling of Russian imports.

In 2023, the Biden administration called the UAE a “country of focus” for circumventing sanctions and export controls on Russia. According to the U.S. Treasury Department, companies in the UAE during the second half of 2022 transported more than $5 million of export-controlled goods from the U.S. to Russia — including semiconductors that can power weapons on the Ukrainian battlefield. 

“The UAE helps facilitate dual-use trade. It is an important transit hub for dual-use goods, meaning goods that can have both civilian and military use, so this trade helps fuel Russia’s war on Ukraine,” Borshchevskaya said.

The UAE’s Ministry of Foreign Affairs did not immediately respond to a CNBC request for comment.

So far, Washington has not moved to actually punish the Middle Eastern country. Trump has not given the UAE or other Gulf trade partners the treatment it did to India.

Part of this is because of Abu Dhabi’s role as a mediator between Russia and Western powers. It has facilitated communication between adversaries and brokered prisoner swap deals between Ukraine and Russia. Since the war’s outbreak in February 2022, the UAE says Emirati mediation efforts have seen 4,181 captives returned home.

The UAE is also buffered by its mammoth business ties to the U.S. beyond just defense: Abu Dhabi is a rapidly growing hub for, and investor in, America’s largest AI and tech companies. Trump’s highly feted visit to the Gulf region in May saw a number of major deals signed with the UAE across sectors, while Abu Dhabi in March committed to a 10-year, $1.4 trillion investment framework in the U.S.

The UAE’s friendship with Russia “is a source of tension with the U.S., but not a major one at this stage, particularly under the Trump administration,” said Hussein Ibish,  a senior resident scholar at the Arab Gulf States Institute in Washington.

“However, as secondary sanctions are liable to kick in after Trump’s cease-fire deadline regarding the Ukraine war… the UAE and Russia are going to want to coordinate any potential response to such secondary sanctions.”

Whether Trump decides to pressure Abu Dhabi is something leaders in the UAE and wider Gulf region will likely be watching closely. But the small, oil-rich sheikhdom will maintain its independence when it comes to its foreign policy decisions, says Michael Rubin, a former Pentagon official and resident scholar at the American Enterprise Institute.

“The UAE is no longer interested in being part of big coalitions or pressure campaigns; it will base its policy on a narrow and naked calculation of its own interests and allow others to waste their time and energy on sanctions, coercion, and great power competition,” Rubin told CNBC.

“MBZ will do what’s right for UAE, and not put all his eggs in the American, Chinese, or Russian baskets.”