Prime Minister Keir Starmer has struck a £3.7 billion trade deal with six Gulf states, ending four years of negotiations that passed through four successive prime ministers. BBC Business confirmed the figure on 20 May 2026, noting it was double the original estimates. The deal covers food, luxury cars, defence, aerospace, and hospitality sectors. The six Gulf Cooperation Council states — Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman — represent a combined market of more than 50 million people and are among the world’s largest sovereign wealth fund holders. The deal was signed as BBC Politics reported that the UK was simultaneously watering down new Russian oil sanctions in response to rising domestic petrol prices — a juxtaposition that illustrates the tensions inherent in any ambitious trade policy conducted against a background of energy vulnerability.
The received wisdom
The Remainers’ critique of Brexit has always rested substantially on trade: that departing the EU’s single market would leave Britain commercially exposed, that the promised “global Britain” trade deals would be smaller, slower, and more conditional than EU membership, and that the UK’s negotiating leverage as a standalone economy of 67 million people is simply less than it was as part of a bloc of 450 million. The Gulf deal, in this reading, is welcome but inadequate: £3.7 billion is a modest fraction of the trade flows the UK has lost or redirected since 2020, the Gulf states drive hard bargains on procurement and are not above demanding political concessions alongside commercial ones, and the deal’s defence component raises questions about arms sales to states with contested human rights records. Many in the Labour Party are quietly uncomfortable with the alliance optics of a government that has made social justice its domestic brand signing a major commercial partnership with Gulf monarchies.
A different read
The Remainers’ structural argument was always stronger in theory than in practice, and the Gulf deal offers a useful test case. Britain’s post-Brexit trade strategy has proceeded unevenly — the US deal remains stalled, the Australia and New Zealand deals were signed but have generated less volume than anticipated, and the EU relationship under the “reset” that Starmer has pursued is more functional but not transformed. The Gulf deal, by contrast, is a genuine achievement.
What makes it instructive is precisely the sectors it covers. The Gulf states are among the world’s largest defence procurement customers. Britain’s BAE Systems, Rolls-Royce, and the wider defence-aerospace sector employ hundreds of thousands of people and are among the UK’s most competitive exporters. These relationships are not new — the UK has supplied Saudi Arabia with aircraft and training for decades — but formalising them in a comprehensive trade framework gives them durability and legal structure that bilateral defence relationships often lack. From a national-interest perspective, this is more valuable than it might appear: it ties the Gulf states’ considerable investment flows into the UK economy on terms that create mutual dependency.
The Guardian noted that the deal closes four years of talks under four prime ministers — a record that reflects both the complexity of Gulf negotiations and the degree to which Brexit-era governments were unable to marshal the diplomatic focus to conclude them. Starmer’s Labour has been more effective than its Conservative predecessors at converting multilateral economic diplomacy into signed agreements, which is notable given that Labour’s internal coalition includes significant scepticism of Gulf engagement. The political skill involved in managing that internal tension while closing the deal deserves acknowledgement from critics on both sides.
The harder question is coherence. A government that is simultaneously negotiating a Gulf trade deal — with a defence component — while watering down Russian oil sanctions because petrol prices are politically sensitive, and while promising a more values-based foreign policy, has accumulated a set of commitments that do not obviously resolve. This is not unique to Starmer: every British government since Blair has faced the same tension between commercial pragmatism and declared ethical foreign policy. But the current government came to power with unusually explicit commitments on values, and BBC Business’s reporting on the sanctions rollback suggests that those commitments are now being traded off against price pressures in ways that will invite scrutiny.
The correct lesson from the Gulf deal is not that post-Brexit trade policy has been vindicated — it hasn’t been, and the EU-UK relationship remains significantly worse than what existed before. Nor is it that the deal is compromised by the politics of Gulf human rights — every major trading nation makes similar calculations. The lesson is narrower and more useful: when British diplomacy is given focused political attention and the latitude to pursue national commercial interests without being paralysed by ideological purity requirements, it can deliver results. The failure has generally been of political will and institutional capacity, not of underlying capability.
What to watch
- Whether the defence component of the deal generates Parliamentary scrutiny over arms sales terms — particularly given the ongoing conflict in Yemen and human rights concerns in Saudi Arabia.
- UK-US trade talks: whether the Gulf success creates political momentum for Starmer to push harder on the long-stalled UK-US framework, which would be of far greater economic significance.
- The Russian sanctions rollback: BBC Business reported the UK “watered down” new measures as petrol prices rose. If oil prices fall and the political pressure eases, whether the original sanctions are reinstated will test the government’s stated resolve.
- Gulf sovereign wealth fund investment flows into UK infrastructure and technology — the deal’s long-term value may be less in trade volumes than in the investment relationships it normalises.
— J