Editor’s Note
This article examines the complex economic ties between the UAE and Israel, specifically within the diamond trade. It presents a perspective on how this commercial relationship intersects with regional conflict and the funding of military operations. The views expressed are those of the author.
How the Booming Diamond Trade Between the UAE and Israel Supports the Occupation and Military Aggression Against Palestinians.
The diamond trade between the UAE and Israel has witnessed a significant boom, contributing approximately one billion dollars annually to the Israeli Ministry of Defense, thus indirectly funding Israel’s war machine against Palestinians.
While Gaza remains under continuous Israeli bombardment and civilian casualties rise at alarming rates, a network of trade relations operates behind the scenes, financing Israel’s military activities and settlements in the West Bank.
The opposition website, UAE71, highlighted that one of these relations is the “diamond trade” between Abu Dhabi and Israel, which represents one of the most profitable forms of “economic normalization,” pumping billions into Israel’s coffers while Gaza and Palestine, in general, suffer under blockade and destruction.
Diamonds have always been a crucial part of Israel’s economy, and their trade has been significant for the Jewish community historically. Following the occupation of Palestine in 1948, Israel became an important player in the wholesale diamond industry, with a major diamond exchange in Ramat Gan, which is one of the world’s largest and most influential diamond exchanges.
Diamond trade has been a key link between Abu Dhabi and Israel, representing over two-thirds of total trade during the early years of normalization and growing significantly with significant Emirati facilitation.
In just two and a half years after the normalization agreement, the UAE’s diamond trade increased by 72% in raw diamonds and 50% in polished diamonds, with normalization being a key factor in this rise.
Reports indicate that the UAE-Israel diamond trade is not a recent development but grew in secret over two decades before the normalization agreement in September 2020. Behind this secret communication stood Ahmed Bin Sulaim, the CEO of the Dubai Multi Commodities Centre and the head of the Dubai Diamond Exchange.
Before normalization, Israeli diamond companies had to use indirect routes through Europe or Asia to send diamonds to the UAE, but the normalization agreement allowed direct shipments of raw and polished diamonds, reducing costs and time for Israeli diamond traders.
Moreover, the Comprehensive Economic Partnership Agreement between Abu Dhabi and Israel, signed in May 2022 and implemented in April 2023, eliminated customs duties on diamonds, making Abu Dhabi a key facilitator for diamond shipments to Israel.
Shortly after signing the normalization agreement, Abu Dhabi took the diamond trade with Israel public, signing an agreement to strengthen trade between the Israeli Diamond Exchange and the Dubai Diamond Exchange on September 17, 2020, just two days after the normalization deal.
As part of this agreement, the Dubai Diamond Exchange opened its office in Ramat Gan that same year, and the Israeli Diamond Exchange opened its office in Dubai in February 2022, officially announcing it by the end of the year. As a result, the UAE became a primary gateway for raw diamond supplies to Israel, as well as a strategic point for managing African diamond imports, bypassing international scrutiny.
This reinforced Israel’s position as one of the world’s largest diamond industry hubs, directly supporting the Israeli economy. Diamond trade is one of the primary financial sources that fund Israeli government institutions, including the military, which uses these funds to kill Palestinian men, women, and children.
Amid the ongoing aggression against Gaza, the diamond trade between Abu Dhabi and Israel seems more than just about precious stones; it represents a clear model of how economic relations can be used to fuel violence and fund Israel’s military apparatus.
Available data shows that diamond trade between the two parties is not symbolic but strategic. In 2021, Israel exported $188 million worth of rough diamonds to the UAE and imported $244 million worth, which made up 11.8% of its total rough diamond imports for that year.
In 2022, the value of diamond trade between the two sides amounted to $1.75 billion, an increase of 163% compared to 2021, according to statistics from the Dubai Multi Commodities Centre.
Despite a decrease in the volume of rough diamond trade in Israel in 2023, an Israeli statistic revealed that diamond trade with the UAE represented 27% of Israel’s total diamond imports and exports that year.
In March 2024, during Israel’s war on Gaza and its economic blockade, Tel Aviv imported $57 million worth of rough diamonds from the UAE, which accounted for 51% of its imports for that month. Meanwhile, the UAE imported $20 million worth of rough diamonds, representing 19% of Israeli exports.
