UAE suspends all trade with Iran after missile alert

DUBAI, 20 AUGUST 2026 —

The United Arab Emirates suspended all trade and financial transactions with Iran on Wednesday following ballistic missile fire into the Persian Gulf, cutting off a key re-export hub for Tehran.

The Emirati Foreign Ministry said the measures took immediate effect and would run “until further notice,” citing two ballistic missiles that landed late Tuesday and triggered nationwide shelter warnings—the first such alerts in weeks. Iran denied launching the projectiles, while the UAE Defense Ministry said assessments indicated the missiles were aimed at maritime traffic in the Gulf.

Before the conflict, the UAE accounted for 30% of Iran’s imports—about $21 billion in 2024—and took 13% of its exports valued at $7 billion, according to World Trade Organization data. Trade between the two had already collapsed early in the war, then partially resumed in late June as tensions eased.

“The UAE has been very important for Iran not as a direct supplier but as a gateway for third-country goods,” said Mohammad Farzanegan, professor of Middle Eastern economics at Germany’s University of Marburg.

The suspension follows a surge in attacks on shipping in and around the Strait of Hormuz, through which one-fifth of traded oil and gas flowed in peacetime. Iran has repeatedly targeted vessels in the strait, including four tankers owned by Abu Dhabi’s state-owned ADNOC over the past two weeks. None of the incidents caused injuries, but they drew condemnation from the UAE, Kuwait and Bahrain.

Since the war began, nearly 20 ADNOC ships have been hit by missiles and drones, killing one person and wounding 20 others.

Iran’s ability to exert control over the strait has become its central strategic lever in the conflict. The U.S. and Israel initiated the war on Feb. 28 with stated aims that included ending Iran’s nuclear program, but the fighting has increasingly centered on control of the waterway. U.S. President Donald Trump asserted on Tuesday that the strait remained “open and operating,” posting a map that depicted it as U.S. territory.

Iran’s Deputy Foreign Minister Kazem Gharibabadi dismissed the claim as “delusional.”

MarineTraffic data showed only 10 vessels transited the strait on Tuesday, less than one-tenth of the pre-war daily average. Iran has launched hundreds of ballistic missiles and thousands of drones, Tehran said targeting U.S. assets but hitting buildings in Dubai and Abu Dhabi, Dubai’s commercial airport, ports and energy infrastructure. Iran accuses the UAE and other Gulf allies of enabling U.S.

military strikes and warned on Wednesday that “any assistance or facilitation provided to the aggressor U.S. military amounts to participation alongside U.S. military forces,” according to a statement by Gen. Ali Abdollahi, Iran’s chief of staff, carried by the semiofficial Fars news agency.

The embargo carries economic risks for the UAE, Farzanegan noted. “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 said. “Any major conflict with Iran can therefore damage its economy.”

The Emirati decision coincides with stepped-up U.S. economic pressure on Iran. Treasury Secretary Scott Bessent said last week that new measures would combine economic isolation with a continued blockade of Iranian ports. The campaign follows an intense bombing campaign that has struck industrial, civilian and military targets across Iran. The International Monetary Fund forecasts inflation near 70% this year and an economic contraction of 5.4%, while Iran’s rial currency has hit record lows.