The United Arab Emirates suspended all trade and financial transactions with Iran on Wednesday after accusing Tehran of launching ballistic missiles toward the Gulf state, further escalating tensions in the region and increasing economic pressure on Iran.
The UAE announced the measures after nationwide warnings were issued Tuesday night advising residents to seek shelter amid incoming ballistic missile fire. Emirati authorities said two missiles were launched toward the country before landing in the Persian Gulf. Iran has denied carrying out the attack.
The UAE Foreign Ministry said trade and financial transactions with Iran would be halted “until further notice.” Despite imposing the measures, Abu Dhabi said it remained committed to dialogue, cooperation and regional integration.
The UAE Defense Ministry said its assessment indicated that the missiles were aimed at maritime traffic, although authorities did not specify whether Emirati vessels or the country’s territorial waters were directly targeted.
Iranian Foreign Ministry spokesperson Esmail Baghaei denied Tehran was responsible, saying Iran had not launched missiles toward the UAE.
The suspension could have significant economic consequences for Iran. Although direct trade had already been disrupted by the conflict, the UAE has historically served as an important commercial and re-export hub for Iranian businesses, providing access to goods and international trading infrastructure at a time when Tehran faces extensive U.S. sanctions.
Mohammad Farzanegan, a professor of Middle Eastern economics at Germany’s University of Marburg, told The Associated Press that Iran relies heavily on the UAE not simply for Emirati products but because the country serves as a major gateway to goods originating elsewhere.
Trade between the two countries had largely ground to a halt during the early stages of the conflict as the UAE faced repeated attacks. Some maritime commerce resumed in late June as hostilities temporarily eased, according to Iran’s state-run IRNA news agency.
The latest confrontation also comes amid continued instability in the Strait of Hormuz, one of the world’s most important shipping routes. Iran has been accused of repeatedly attacking vessels attempting to navigate the waterway.
Four tankers belonging to Abu Dhabi’s state-owned ADNOC oil and gas company have been attacked over the past two weeks, according to the UAE. No injuries were reported in those incidents, but the attacks prompted condemnation from the Emirates and other Gulf countries, including Kuwait and Bahrain.
Since the conflict began, nearly 20 ADNOC vessels have been targeted by missiles and drones in the Strait of Hormuz, leaving one person dead and approximately 20 others wounded.
The suspension of trade adds another layer of economic pressure on Iran as the country faces U.S. sanctions, disruptions to maritime commerce and increasing regional isolation amid the continuing conflict.
