The UAE announced it was cutting off trade and financial exchanges with Iran, coinciding with a new US campaign of economic pressure on Tehran, and about six months after the outbreak of war in the Middle East.
Abu Dhabi did not specify when the decision would be implemented or the direct reasons behind it, while experts believe that the move carries a message to Iran in light of the escalation of its attacks on Emirati oil tankers in the Strait of Hormuz, in addition to the convergence of the Emirati position with Washington.
The UAE is one of Iran's most prominent trading partners and its largest source of imports. Trade between the two countries reached approximately $21 billion in the ten months preceding the war, according to official Iranian data. The UAE also accounted for about 30.6% of Iran's imports in 2024, valued at nearly $21 billion, according to the World Trade Organization, while representing about 12% of Iran's exports, exceeding $7 billion.
Most of the UAE's trade with Iran is concentrated in re-export operations, and includes a variety of goods, while official figures do not reflect the size of illicit flows and smuggling operations.
Experts believe that halting regular trade may not be enough to cut off Iran’s financial channels with the world, as Tehran is estimated to use financial networks and front companies that pass through the UAE to circumvent sanctions.
Middle East Institute researcher Karen Young said that the full implementation of the decision could cause significant damage to the Iranian economy, but it could also cause losses for the UAE, noting that isolating Iran economically requires the cooperation of other countries and the imposition of secondary sanctions on the institutions and companies involved.
Max Mezlich, a researcher at the Foundation for Defense of Democracies, said that billions of dollars in Iranian oil revenues subject to sanctions are indirectly passing through the UAE, calling for stricter oversight of suspicious financial transactions.
The UAE decision comes amid rising tensions between Abu Dhabi and Tehran, after the UAE was subjected to Iranian missile and drone attacks during the first weeks of the war, before those attacks subsided later.
The decision also coincided with US President Donald Trump's announcement of a new economic campaign targeting Iran. Analysts believe that Abu Dhabi is facing increasing US pressure to join efforts to cripple the Iranian economy.
In contrast, Emirati researcher Mohammed Baharoon says that the move does not necessarily reflect the UAE joining the US sanctions as much as it aims to respond to Tehran, in light of the targeting of Emirati oil tankers, considering that continuing communication has become difficult in light of these attacks.
