Deal marks a potential embarrassment for the PM after his visit to court financiers.
The United Arab Emirates (UAE) has struck a trade deal with Russia, just days after Sir Keir Starmer sought to charm the Gulf state on a visit this week.
The UAE’s deal with the Eurasian Economic Union (EAEU), which includes Vladimir Putin’s regime, was announced immediately after the Prime Minister’s return to Britain and is a potential embarrassment for Downing Street.
Russia is subject to a wide range of economic sanctions imposed by the West, with the aim of curtailing its access to crucial war materials and undermining its ability to sustain its invasion of Ukraine.
But the efforts to isolate Moscow have been partially undermined by the willingness of other nations to continue dealing with the country.
The UAE’s new agreement, which also encompasses Belarus – itself subject to sanctions as a close ally of Russia and the launchpad for much of the invasion – Armenia, Kazakhstan and Kyrgyzstan, reduces tariffs on trade between the countries.
Analysts have noted a large spike in exports from Western nations to many of Russia’s allies, indicating that some trade is being diverted through those countries to evade sanctions.
‘Rich seam of opportunity’
Thani Al Zeyoudi, the UAE’s trade minister, said: “With a combined population of some 200 million people and a gross domestic product approaching $5 trillion (£3.9 trillion), the EAEU offers a rich seam of opportunity for our private sector.”
Russian exports to the UAE have more than doubled since the 2022 invasion of Ukraine, rising from $5.2bn in 2021 to $10.9bn last year, according to the UAE’s economics ministry.
That is almost three times the total of $3.7bn in 2019, before Covid.
Relations with Britain have been strained in the past few years. Disagreements have ranged from discussions on Sudan at the United Nations to the ownership of Manchester United and the sale of the Telegraph Media Group – which the UAE was blocked from buying by the previous government.
Sir Keir met the UAE’s president, Sheikh Mohamed bin Zayed al-Nahyan on his visit this week.
The Prime Minister used the trip to court the country’s powerful financiers, seeking investment from the sovereign wealth fund bosses into British infrastructure, including the Sizewell C nuclear power plant on the Suffolk coast.
Mubadala, one of the funds which Sir Keir is courting, manages $330bn of assets for the UAE, investing on a grand scale across the world as the Gulf state seeks to preserve and grow its oil wealth, and to exert influence on the global stage.
