The United Arab Emirates has cut off all trade, commercial exchanges and financial transactions with Iran, a dramatic escalation announced Wednesday after Abu Dhabi accused Tehran of firing ballistic missiles toward shipping lanes in the Gulf. It marks the sharpest economic break yet between the two countries since the US-Israel war on Iran began in late February.
The UAE's Defense Ministry said its air defense systems detected two Iranian ballistic missiles overnight, with one landing outside the country's territorial waters and the second falling within them. Officials later said their assessment pointed to the missiles being aimed at maritime navigation rather than at UAE territory directly, which eased fears of a deliberate strike on the mainland even as it underlined how exposed shipping remains near the Strait of Hormuz.
"Until Further Notice"
Announcing the suspension, Foreign Ministry strategic communications director Afra Al Hameli said the halt covered all trade activity, commercial exchange and financial transactions with Tehran, citing regional escalations that undermine peace and security. She also pushed back on unspecified claims about the state of the UAE's economic relationship with Iran, without saying which allegations she meant, while insisting the country remained committed to dialogue and regional integration as the path to stability.
The move follows weeks of accusations from Abu Dhabi that Iran has been targeting its state-owned ADNOC tankers while they transit the strait, and comes after a period of relative calm for the UAE, which had not faced missiles aimed at it since May after bearing the brunt of early attacks in the war. The decision was also reportedly preceded by a phone call between UAE President Sheikh Mohammed bin Zayed Al Nahyan and President Trump.
Iran Denies Involvement
Iran has pushed back hard on the accusation, with reports indicating Tehran is calling the missile incident a false-flag operation rather than an attack it carried out. The denial adds another layer of uncertainty to an already murky picture around the Strait of Hormuz, where multiple parties have traded blame over vessel strikes for months without independent verification of who fired what.
The economic rupture lands just a day after the 60-day window for a broader US-Iran peace deal expired without an agreement, and after President Trump threatened to bomb Oman if it interfered with Washington's push to reopen the strait. Iran's armed forces chief has separately renewed warnings to other Gulf states against assisting the US military, framing any support as effectively joining the war against Tehran, a signal that the diplomatic path out of the conflict may be narrowing further rather than widening.