UAE Tightens Grip on Pakistan Amid Rising Tensions

Tensions between the UAE and Pakistan are escalating, marked by Etihad Airways' termination of 15 Pakistani employees and demands for early loan repayments. This shift in relations raises concerns about Pakistan's standing in the Gulf and investor confidence. The UAE's recent exit from OPEC further complicates the situation, as it seeks to reassure global markets of its commitment to energy stability. Discover the implications of these developments on the future of UAE-Pakistan ties.

By Narendra Chaudhary May 2, 2026, 11:07 IST

Strained Relations Between UAE and Pakistan

The relationship between the United Arab Emirates (UAE) and Pakistan is becoming increasingly strained, highlighted by Etihad Airways' recent decision to lay off 15 Pakistani staff members in Abu Dhabi. This abrupt action has raised alarms among the expatriate community and sparked concerns regarding Pakistan's status in the Gulf region. Recent events indicate a noticeable shift in the dynamics of the UAE-Pakistan partnership, which appears to be under significant pressure.

Reports indicate that the affected employees were not informed through standard human resources procedures. Instead, they were summoned to an immigration office where they received orders to exit the UAE within 48 hours, as per sources cited by a news outlet.

In another development, the UAE has requested the early repayment of approximately $3.45 billion from Pakistan, which is already under pressure to repay $3.4 billion imminently. Additionally, a major telecom company based in the UAE is contemplating a withdrawal from the Pakistani market. Although no final decision has been made, this consideration reflects a decline in investor confidence regarding Pakistan's economic stability.

There have been indications that Pakistan secured $3 billion in funding aimed at bolstering its reserves, which is also intended to assist in repaying the UAE loan. Furthermore, the UAE has announced its exit from the Organisation of the Petroleum Exporting Countries (OPEC) and its allied group OPEC+, effective May 1. This decision comes amid a backdrop of geopolitical instability, particularly due to the ongoing conflict in Iran, which is disrupting global energy supplies and creating economic uncertainty.

Despite its departure from OPEC, the UAE has reassured international markets of its commitment to maintaining stability in energy supply chains. Authorities emphasized that the UAE will continue to play a responsible role in global energy markets. "This decision reflects the UAE's long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets," stated UAE officials.