Keep pulling the thread on United Arab Emirates.
The United Arab Emirates withdrew $2 billion from Pakistani sovereign accounts that were held in Abu Dhabi.
The $2 billion withdrawal by the UAE from Pakistan's accounts represented approximately one-third of Pakistan's usable foreign exchange buffer.
The UAE's withdrawal of $2 billion from Pakistan was a deliberate act of financial pressure intended to target Saudi Arabia's Crown Prince, Mohammed bin Salman.
The UAE's financial pressure on Pakistan is aimed at influencing Mohammed bin Salman's management of the backchannel negotiations with Iran, which Pakistan is conducting.
Saudi Arabia's economy is losing approximately $2 billion per day in oil export revenue due to disruptions in the Strait of Hormuz.
In negotiations with Iran, Saudi Arabia is prioritizing the resolution of the Hormuz blockade over obtaining constraints on Iran's military capabilities, a position the UAE opposes.
If Pakistan seeks replacement liquidity from China, it will introduce Chinese financial influence into the management of the Iran-Saudi backchannel negotiations.
The timing of the UAE's withdrawal was calibrated to push Pakistan's reserve position below IMF thresholds, triggering international financial scrutiny.
The UAE's economy is more diversified than Saudi Arabia's, making it less dependent on oil transit through the Strait of Hormuz and thus less urgent about resolving the blockade.
The UAE unilaterally withdrew a significant number of its military forces from Yemen in 2019 without an agreement with Saudi Arabia, marking a point of strategic divergence.
A significant portion of Pakistan's stated foreign exchange reserves are bilateral deposits from Saudi Arabia, the UAE, and China, which are contingent obligations rather than freely usable assets.
The UAE-Saudi dispute creates an opportunity for Iran to exploit the fracture in the Gulf coalition by offering terms designed to split the two countries.