While bilateral relations between Abu Dhabi and Paris are quite warm, illustrated by the sale of 80 Rafale aircraft in 2021, no major contracts but several strategic agreements were signed during the UAE President Sheikh Mohamed bin Zayed Al Nahyan’s recent state visit to France. Marked by the current crises over Ukraine and energy prices, his first official visit to the European country remained more or less symbolic.
TRENDS spoke to Brahim Oumansour, researcher at IRIS Institut de relations internationales et stratégiques and a consultant in international strategy, specialized in Middle East and North Africa countries, about the latest French trip of Sheikh Mohamed bin Zayed and the relations between the Gulf nations and the Western countries in the wake of recent global crises.
The UAE President met his French counterpart for the fourth time in less than one year, highlighting the strategic importance of the European country for Abu Dhabi, said Oumansour, adding that the UAE eyes France as a gateway to Europe.
“Over a decade, Abu Dhabi and Paris have developed a close strategic cooperation covering mainly but not only, security and economic sectors. A good personal relation between the two leaders has also deepened these ties. After some years of frictions with Washington, mainly over the Iranian deal, France has become important in eyes of the UAE and Arab Gulf countries in general,” he said.
“The UAE is the second economic partner and the largest investor in France among the Gulf countries after Saudi Arabia. There are about 50 companies in France which are wholly or partially held by the UAE, mainly in security and real-estate and there are also many French companies such as Total, Veolia, Suez, present in the UAE. France is a key leading member of the EU. It is also a member of UN security council so this cooperation is important, especially when it comes to fight the terrorism or deal with some files in Syria, Libya or Africa,” Oumansour added.
The UAE and France have committed to expand their collaboration across all fields signing several agreements. Among them, they concluded a Comprehensive Strategic Energy Partnership, focusing on energy security and affordability. Also, French oil major company TotalEnergies and ADNOC signed an agreement to explore opportunities for growth across the energy value chain, especially in gas growth, carbon capture utilisation and storage and trading and product supply, as France and European Union have been looking for new sources of energy since the beginning of Moscow’s invasion of Ukraine.
“European Union has been largely dependent on the Russian oil and gas. Almost three-fourth of crude oil imports came from Russia in 2020 and Bruxelles is urging to find alternative supplies to Russian energy and reduce its dependence on it,” said Oumasour.
European countries are looking for diverse sources of energy supply from countries such as Algeria, Nigeria, Azerbaijan. “For instance, we observed recently different agreements signed between Italy and Algeria to increase the gas supply to the European country,” Oumasour said.
On July 18, the European Union and Azerbaijan also signed an agreement to double gas imports from the energy-rich Caspian nation to Europe. Azerbaijan has already increased gas deliveries to Europe “and this trend will continue with up to 4 billion cubic meters of additional gas this year and volumes expected to more than double by 2027,” the EU’s Energy Commissioner Kadri Simson said in a statement.
Pressure on UAE, Saudi Arabia
“Today Gulf countries and the UAE in particular can help this diversification”, said Oumasour. “Mohamed bin Zayed’s visit to France came after Joe Biden’s visit to Saudi Arabia, as Paris and Washington are asking these two Gulf states to increase their exports and curtail the rise of oil prices”.
Saudi Arabia recently confirmed that it is pushing its oil production capacity to 13 million barrels per day while the UAE, Opec’s third largest crude producer, is expanding its crude oil production capacity to 5 million barrels per day by 2030.
“But OPEC members are really reluctant to raise supplies and by consequence reduce the prices as they need to increase their revenues to lead their strategic developments. They also face world economic crises and inflation in general,” the expert said.
Higher energy prices will bolster growth in GCC economies and a steady recovery from the Covid 19, in 2022-2023, KPMG says in its recent global Economic Outlook report.
The World Bank, meanwhile, has estimated that Saudi Arabia’s economy will grow 7% this year, while UAE economy will grow 4.2% this year, according to International Monetary Fund’s projections.
Energy prices vs climate action
France and the UAE had also recently signed an MoU on climate action. Separately, President Macron has congratulated the UAE for hosting of COP28 in 2023, and offered France’s full support, including its expertise derived from COP21.
However, according to Oumansour, “the relationship between the EU and Gulf countries is facing a dilemma related to climate action. On one hand, the climate change requires countries to lead green economy and sustainable development and reduce carbon emissions – the objectives set during different COPs – but at the same time, the current energy crisis has intensified the need of bigger fossil energy consumption. It has raised fear that both suppliers and consumers of energy may put aside sustainable development commitments”.
Security remains in focus
To promote bilateral economic exchanges, the UAE-France Business Council has been launched. Chaired by Dr Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of Abu Dhabi National Oil Company (ADNOC), and Patrick Pouyanné, Chairman and CEO of TotalEnergies, it comprises 18 CEOs from France and the UAE. The council members will meet at least once a year, alternating between the UAE and France as the host destinations. The council has three working groups in energy, industry, technology, transportation, and investment sectors. Each working group will make recommendations to enhance economic exchanges between the UAE and France in their respective fields.
Though GCC countries have always been strategic partners of the West, “recent frictions, particularly over Iranian nuclear deal and assassination of Saudi journalist Jamal Khashoggi have impacted the relations and created opportunities for Russia and China to strengthen their influence in the region.”
“However, relations between the US and Arab countries are dominated by pragmatism and today Washington and the Western countries in general are required to carry out an active diplomacy to avoid being outstripped by the competitors. During election, Joe Biden had criticized Saudi Arabia for war in Yemen and warned it of consequences. This led Gulf countries to diversify their partnerships and created an opportunity for Paris to grab parts of economic markets, particularly in defense and construction sectors. However, the relationship may remain limited due to the strong ties between Washington and Riyadh as Saudi Arabia sees the US as the superpower that can protect it better than France,” said Oumansour.