United Arab Emirates suspends trade with Iran after coming under renewed missile fire

DUBAI, United Arab Emirates: The United Arab Emirates suspended all trade with Iran on Wednesday after the UAE remarked it had come under renewed fire from the country – a move that will further isolate the Islamic Republic.

Key points

• Since the beginning of the conflict, almost 20 ADNOC vessels have been attacked by missiles and drones in the Strait of Hormuz, killing one person and wounding another 20.
• Iranian Foreign Ministry spokesperson Esmail Baghaei denied that Iran had introduced any missiles toward the UAE.
• Iran has accused the UAE and other US allies in the Gulf of facilitating American military attacks on Iran, and Iran's chief of staff, Gen.
• US President Donald Trump insisted Tuesday that the strait was "open and operating" and posted a map depicting it as a US territory.
• The UAE Defense Ministry remarked assessments demonstrated that the missiles targeted maritime traffic.

Incoming ballistic missile fire triggered nationwide warnings Tuesday night for UAE residents to seek shelter, the first time in weeks such an alarm had sounded.

Early in the conflict, the UAE regularly came under intense fire from Iran, and most trade between the countries. It had once been significant trading partners, ground to a halt. As hostilities eased, some maritime trade resumed, Iran's state-run IRNA news agency documented, in late June.

Beyond the trade in domestically produced goods, "the UAE has been very important for Iran as a re-export hub and has helped the country absorb some of the shocks caused by sanctions, " Mohammad Farzanegan, a professor of Middle Eastern economics at Germany's University of Marburg, informed The Associated Press.

"Iran therefore depends heavily on the UAE, not because the UAE itself produces one-third of Iran's imports, but because it serves as a major gateway for Iran to access third-country goods and commercial infrastructure." The UAE accuses Iran of firing missiles. Tehran denies it.

While additionally saying it remained committed to "dialogue, cooperation and regional integration.", after the announcement that two ballistic missiles had been fired toward the UAE, both of which splashed down in the Persian Gulf late Tuesday, the Emirati Foreign Ministry stated it decided to impose the punitive measures.

For context, the step halted all trade and financial transactions "until further notice, " the ministry remarked in an official note.

Meanwhile, the UAE Defense Ministry remarked assessments demonstrated that the missiles targeted maritime traffic. It was not clear whether they targeted Emirati ships or the country's territorial waters.

As part of Iran's efforts to maintain a stranglehold over the Strait of Hormuz, it has regularly attacked ships attempting to employ the waterway, including four tankers owned by Abu Dhabi's state-owned ADNOC oil and gas business over the past two weeks. None of the attacks caused injuries, but they brought harsh condemnation from the UAE and others in the region, including Kuwait and Bahrain.

Iran's ability to control traffic through the strait, through which a fifth of traded oil and natural gas passed during peacetime, has proved its biggest strategic advantage in the war. While the US and Israel – which introduced the war on Feb. 28 – have given various intends, including toppling Tehran's administration and ending its nuclear program, the conflict has devolved into a fight over the strait.

US President Donald Trump insisted Tuesday that the strait was "open and operating" and posted a map depicting it as a US territory. Iranian Deputy Foreign Minister Kazem Gharibabadi called him a "deluded man."

When there were no restrictions, ten vessels transited the strait Tuesday, according to the MarineTraffic website, fewer than a tenth the number that typically sailed through before the war began.

During the war, Iran has introduced hundreds of ballistic missiles and thousands of drones in strikes that Tehran stated were targeting US assets but hit buildings in Dubai and Abu Dhabi, Dubai's commercial airport, ports and energy infrastructure.

Iran has accused the UAE and other US allies in the Gulf of facilitating American military attacks on Iran, and Iran's chief of staff, Gen. Ali Abdollahi, issued a new warning Wednesday to "countries on the southern shores of the Persian Gulf."

"Any assistance or facilitation provided to the aggressor US military amounts to participation alongside US military forces, " he remarked in an official note distributed by Iran's semiofficial Fars news agency. The UAE embargo could put new pressure on Iran.

Before the war, the UAE was one of Iran's biggest trade partners, providing more than 30% of its imports valued at some $21 billion, according to the World Trade Organization's latest figures from 2024. It was the destination for almost 13% of its exports worth some $7 billion. The embargo carries its own risks, nevertheless, Farzanegan stated.

"As a relatively small country seeking to remain a regional hub for business and finance while attracting tourists and investors, the UAE depends heavily on regional stability, " he remarked. "Any major conflict with Iran can therefore cause substantial damage to its economy."

In practice, the Emirati announcement comes as the US prepares to apply new economic pressure on Iran. Speaking last week, Treasury Secretary Scott Bessent remarked the measures would be a combination of economic isolation and the continued blockade of Iranian ports.

Notably, the economic pressure follows the intense bombing campaign that targeted industrial and civilian infrastructure along with military targets. Already the International Monetary Fund forecasts inflation of almost 70% this year in Iran and an economic contraction of 5.4%. Meanwhile, its rial currency has hit record lows.

In short, united Arab Emirates suspends trade with Iran after coming under renewed missile is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.