Abstract

In 2025, Gulf states are moving forward to redefine their global economic and diplomatic profiles through diversification, strategic partnerships, and active regional engagement. The Sultanate of Oman and the United Kingdom deepened a centuries-old alliance, with bilateral trade rising 14.7% to £1.8 billion, reflecting Oman’s Vision 2040 drive for industrial diversification and the UK’s post-Brexit pursuit of stable Gulf trade partners. Meanwhile, Saudi Arabia accelerated its Vision 2030 tourism agenda, expanding heritage and leisure projects such as AlUla and the Red Sea while launching its first international venture in Italy. This dual strategy aims to convert cultural and natural assets into a global tourism brand and a non-oil growth engine, positioning the country as both investor and destination. In parallel, the United Arab Emirates faced a critical test of its regional diplomacy amid the Sudan conflict, seeking to balance strategic ambition with humanitarian responsibility and accountability. Collectively, these cases demonstrate how Gulf countries are using trade, tourism and diplomacy to increase their influence beyond the region. They are also incorporating sustainability and soft power into their economic models and navigating a changing geopolitical landscape that connects the Gulf, Africa and Europe through evolving patterns of commerce, connectivity and strategic cooperation.

Keywords

Bilateral Trade, Oman–United Kingdom Relations, Economic Partnership, Strategic Cooperation, Vision 2040, Geopolitical Significance, Vision 2030 Red Sea Global; AlUla Private Investment Pipeline, Luxury Hospitality, Italy, United Arab Emirates (UAE), Sudan Conflict, Rapid Support Forces (RSF), Foreign Policy and Diplomacy, Humanitarian Engagement, Geopolitical Risks, Regional Stability and Accountability.

Trade Relations between the Sultanate of Oman and the United Kingdom in 2025

In 2025, the trade relationship between the Sultanate of Oman and the United Kingdom (UK) continued to expand, reflecting the depth and resilience of a partnership that spans over two centuries. According to the latest news released by the UK Department for Business and Trade, total trade in goods and services between the two nations reached £1.8 billion (approximately RO 846 million) in the four quarters to the end of the second quarter of 2025—an impressive 14.7% increase compared with the same period a year earlier. This growth underscores the strength of the historical, economic, and strategic ties that continue to anchor relations between these two actors. Indeed, these latest trade numbers highlight the strength of this partnership. UK exports to Oman have grown significantly, reflecting strong demand for British-made machinery, vehicles, and electrical equipment. Meanwhile, Omani exports to the UK have also expanded considerably, led by refined oil, power generation equipment, and various industrial metals. This trend underscores Oman’s ongoing industrial diversification under Vision 2040 and its emerging role as a dependable energy and manufacturing partner for the United Kingdom.

The bilateral relationship between Oman and the UK is among the oldest and most enduring partnerships in the Gulf region. The relationship between the two nations can be dated back to the early 19th century, when the Treaty of Friendship and Commerce was first signed in 1800. Over time, the two nations developed close diplomatic and military ties, particularly during the 20th century, when British support played a pivotal role in Oman’s modernisation and security consolidation. Today, this historic bond has evolved into a comprehensive partnership spanning trade, investment, defence and education, founded on mutual respect and shared interests in regional stability.

Geopolitically, Oman occupies a uniquely strategic position at the mouth of the Arabian Peninsula, overseeing the Strait of Hormuz—a vital maritime chokepoint through which a significant portion of the world’s energy supply passes. The United Kingdom has long recognised Oman’s importance as a stabilising force in the Gulf, appreciating its balanced foreign policy and its tradition of quiet diplomacy. Oman’s ability to maintain constructive relations with neighbouring Gulf Cooperation Council states, Iran, and Western partners alike positions it as a key mediator role in regional security dialogues.

The deepening trade partnership in 2025 also aligns with the broader objectives of both nations. For Oman, strengthening economic ties with the UK supports its ambition to diversify away from oil dependence, attract foreign investment, and build competitive industries. For the United Kingdom, Oman represents a trusted and strategically located partner in a region that remains vital for global energy security and trade connectivity, particularly in the post-Brexit era as the UK seeks to expand its commercial footprint across the Gulf. As both nations continue to navigate global challenges, ranging from energy transition to regional security and technological innovation, the Oman–UK partnership stands as a model of enduring cooperation, mutual benefit, and shared vision for a more interconnected and stable global economy.

Saudi Arabia Building a Tourism Powerhouse at Home While Expanding Abroad

Saudi Arabia is hard-wiring tourism into Vision 2030 with a twin track: scale up flagship destinations at home while exporting its hospitality model abroad. In AlUla—a UNESCO site that drew about 300,000 visitors last year—the Royal Commission plans to tender roughly 21 projects worth SAR 6 billion (~$1.6 billion) to the private sector as it moves into a second development phase targeting completion by 2030. Officials say about 70% of visitors currently come from the Gulf and ~30% from the US, UK, India, Europe and China, with a 2030 goal of 1 million annual visitors.

The domestic push sits within a broader recalibration: after the early ultra-luxury emphasis on the Red Sea, the Tourism Minister has flagged a wider offer for mid and upper-mid segments while continuing to grow religious travel. The headline target is 150 million tourists a year, with at least 50 million from abroad. In 2024, the kingdom logged ~116 million trips (≈29.7 million inbound; ≈86.2 million domestic), marking a second record year.

Abroad, Red Sea Global (RSG)—backed by the Public Investment Fund—has confirmed its first international step: a luxury hospitality project in Italy. CEO John Pagano announced the deal at Reuters NEXT Gulf, framing it as a deliberate export of the RSG model developed on pristine Red Sea sites. RSG has several ultra-luxury properties already open in the kingdom and plans to add 17 more hotels and resorts by May 2026; details on the Italy asset (location and ticket size) have not been disclosed.

Institutionally, AlUla’s build-out is designed to crowd in private capital while preserving landscape and heritage, with AlUla Development Co. positioned to deliver hospitality, residential and commercial assets under sustainability constraints. Execution risks remain—timelines, environmental management, and private-sector depth—but the strategy is explicit: convert protected heritage and natural assets into investable, experience-rich destinations at home, and establish a recognizable Saudi premium brand abroad.

If delivered, the mix of heritage-driven projects, a broader price ladder in leisure, record religious flows, and selective overseas investments could shift Saudi Arabia from “emerging destination” to global tourism maker—anchored in domestic transformation and amplified by its first European venture.

For geopolitics and macroeconomics, Saudi tourism is less a sectoral bet than a tool of geo-economic statecraft. By converting natural and cultural assets into exportable services, the kingdom seeks diversification, higher non-oil GDP, and reputational leverage. The Italy move functions as a signaling device: it externalizes the Saudi hospitality “standard,” builds European distribution channels, and hedges regional risk across jurisdictions. Yet execution sits at the intersection of financing cycles and politics: elevated global rates, construction inflation, and ESG scrutiny raise hurdle rates for giga-projects; water and climate constraints complicate true sustainability; and brand equity depends on regulatory predictability, labor and talent pipelines, seamless air connectivity, and liberalized entry regimes beyond Hajj/Umrah. The strategic throughline is clear: embed a premium, experience-led services engine into the economy and project it outward—recasting the Kingdom’s profile from petro-state to a source of high-end, place-based value in global markets.

The United Arab Emirates and the Sudan Conflict: Balancing Strategic Ambition and Diplomatic Accountability

In late 2025, the United Arab Emirates (UAE) emerged as a key regional actor amid renewed international attention on the conflict in Sudan. While reports from various humanitarian and diplomatic sources raised questions about the dynamics of external involvement in the crisis, the UAE reaffirmed its dedication to promoting peace, stability, and humanitarian relief efforts in the region. Emirati officials emphasised the country’s commitment to transparency and constructive diplomacy, noting that the complexities of the Sudanese conflict require coordinated international engagement. The situation highlights the UAE’s growing influence as a pragmatic and responsible player navigating the region’s evolving geopolitical landscape.

The Sudanese crisis, which began with the collapse of the uneasy power-sharing arrangement between the Sudanese Armed Forces (SAF) and the RSF in 2023, has evolved into one of Africa’s worst humanitarian emergencies. Millions have been displaced, and the conflict has destabilised neighbouring states along the Red Sea and the Horn of Africa. The UAE’s deepening engagement in the region (historically driven by its economic, security, and humanitarian interests) has come under growing international observation. Western governments and international organisations have expressed concern that any perceived support to the RSF could undermine peace efforts and blur the UAE’s reputation as a constructive regional actor.

From a strategic standpoint, the UAE’s interest in Sudan is neither new nor surprising. The Red Sea corridor has long been a focal point of Emirati foreign policy, reflecting its importance for maritime security, food imports, and trade routes linking the Gulf with East Africa. Over the past decade, Abu Dhabi has invested heavily in African ports, agriculture, logistics, and renewable energy, positioning itself as a leading Gulf investor on the continent. Sudan, with its vast agricultural potential and geographic proximity to the Arabian Peninsula, has been a key part of this broader strategy. Diplomatically, the controversy places the UAE in a delicate position. It has sought to project itself as a global mediator and humanitarian leader. Yet, involvement in Sudan’s multifaceted conflict exposes the challenges of maintaining that image amid a rapidly shifting geopolitical landscape. The UAE’s leadership now faces the dual task of clarifying its position while reaffirming its commitment to international norms and multilateral peace efforts.

Beyond the immediate controversy, the episode highlights a broader transformation in the UAE’s foreign policy identity. Over the past decade, the country has transitioned from a relatively cautious regional player to a proactive middle power with global reach, pursuing strategic investments, mediation roles, and partnerships from North Africa to Southeast Asia. Said so, it is important that the UAE reinforces its credibility as a trusted partner by ensuring transparency in its African engagements. Constructive engagement in Sudan, for example through the establishment of humanitarian corridors, the provision of reconstruction funding, and the facilitation of dialogue, could transform this period into an opportunity to demonstrate its capacity for pragmatic diplomacy and adaptive strategy.