New Rules of Engagement: The UAE Shifts the War to the Economic Front

As I See

Adil El-Baz

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The suspension of direct flights between Sudan and the United Arab Emirates is not merely inhumane—it is a political, economic, and indeed military decision in every sense. It is directly tied to the course of the war and the methods of waging it on multiple fronts. How so?

The UAE knows that the tons of Sudanese gold flowing into Dubai’s markets mostly take one well-worn path that has remained open for decades, unaffected by political changes: by air. Gold was exported with ease, and revenues returned quickly enough to play an essential role in the economy. These two advantages led Sudan to maintain its gold trade despite the UAE’s continued aggression.

But with Abu Dhabi’s failures in the military theatre, it needed to move the conflict into the economic sphere, breaking the unwritten rules of economic engagement—which are different from military ones. This may only be the beginning: the UAE could escalate into a full-blown trade and economic war, targeting maritime shipping, banking, finance, and other dealings.

Strikingly, the UAE has traditionally kept politics and trade separate in its domestic economic conduct. Even under pressure and amid accusations that Dubai was a hub for money laundering and that gold arriving from African militias was “blood gold,” it resisted politicizing trade. But in Sudan’s case, for the first time since the war began, it has deployed trade and economic tools as weapons.

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Halting air travel disrupts the gold trade immediately, though it does not halt it entirely. It weakens Sudanese gold’s competitiveness in Dubai, where trader profit margins rarely exceed 1–2% of global bullion prices. The shutdown eliminates the “hand-carry” route—passengers transporting gold on commercial flights to Dubai/Abu Dhabi—which previously accounted for a significant share of exports. This raises transport costs, delays delivery times, and reduces cash liquidity in Sudan’s domestic market due to fewer instant buyers.

As shipments slow, the price gap between Port Sudan and Dubai widens, forcing Sudanese gold to sell at a discount relative to global prices. This in turn drives down purchase prices for artisanal miners and inflicts heavy losses on them.

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All this means Sudan’s gold trade is now squarely part of the war. The UAE’s move is intended to harm Sudan’s economy and undermine the state’s ability to use its resources for national defence. Abu Dhabi knows Sudan now relies heavily on gold revenues—some economists, such as Dr. Hussein Al-Qouni, estimate that since the war began, gold may account for 65–75% of all rapidly liquid assets in the international market.

Sudan’s gold revenue stood at around 64.4 tonnes, worth roughly $1.6 billion. Including unofficial flows, Financial Times estimates suggest the total may reach 80 tonnes, worth over $6 billion—with more than half smuggled. In 2024, Sudan’s central bank reported that about 97% of officially exported gold (from army-controlled areas) went to the UAE, earning approximately $1.8 billion.

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A sudden stop in exports to Sudan’s primary gold market will cause severe disruptions and a sharp fall in the state’s foreign currency inflows. This will hit the already fragile exchange rate, and impair the state’s ability to meet external obligations—particularly military procurement, which requires hard currency and steady cash flows to sustain battlefield operations.

The decision thus strikes directly at the army’s military capacity—especially coming in the wake of the Nyala operation, which killed 40 Colombian mercenaries aboard a UAE aircraft. Observers suggest this blow was so severe that it prompted Abu Dhabi to abandon its long-held policy of separating trade from politics and war.

The UAE sources between 47% and 95% of its African gold—from Sudan, South Sudan, the DRC, and the Central African Republic. Sudan sends 97% of its gold to the UAE, but its value (even at $6 billion including smuggling) is small in comparison to Abu Dhabi’s total gold trade, estimated at $50–130 billion. This means the UAE is unlikely to feel much pain from the disruption, and can instead use gold as an economic-military lever to drain the Sudanese army’s war chest.

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So what now? There are alternative export routes for Sudanese gold, but they are costly and fraught with complications. These options typically increase costs by 3–5% and delay delivery by 5–10 days, even for shipments ultimately bound for the UAE via intermediary airports or seaports.

One option is to export via Egypt, which is currently receiving smuggled Sudanese gold without restrictions. But Egypt’s notorious bureaucracy and financial hurdles raise costs and expose traders to multiple risks. Eritrea is another route, but it too adds expense, and higher costs make Sudanese gold less competitive than global bullion prices.

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Large-scale traders could use private charter flights to ship gold, but this is costly and requires precise legal arrangements and greater compliance in the UAE—especially since gold arriving through third parties often faces “Know Your Client / Source of Gold” scrutiny at Emirati refineries and trading houses, which can delay refining and payment.

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Turkey is another possibility, though it presents administrative and financial challenges and has previously refused Sudanese gold due to central bank policy. Qatar is also an option, but its market lacks major refining capacity, with only one refinery of limited output. Moreover, Doha’s economic policy has been cautious about entering high-risk gold markets—particularly given their links to political conflicts in Africa and beyond—and is reluctant to mix its pro-peace foreign policy with “blood gold.”

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Maritime shipping from Port Sudan to the Gulf or Asia is feasible but slower, requires robust documentation and trusted logistics companies, and is not without risk. The UAE could also move to block incoming Sudanese cargo ships.

Another, more open market—already in use before this “gold war” began—is Muscat. Oman is a developing country with an open gold market and an advanced trading infrastructure. As of November 2024, Oman’s total gold imports stood at about 372 million Omani rials (around $966 million). Sudan ranked third among gold exporters to Oman, with about 6.4 million rials’ worth.

This small-scale trade to Oman proved viable despite initial hurdles—especially in banking transfers and procedural delays. Oman’s gold market is safe, open, and promising. A Sudanese attempt last year to open a bank branch in Dhofar failed, but the idea should be revived quickly. Muscat could rapidly become a strong alternative to Dubai.

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In the meantime, Sudan urgently needs to explore and activate alternative routes. Delay will carry serious economic, political, and military costs—deepening the crisis and triggering dangerous consequences. Let us remember that 75% of our current resources come from gold.