DUBAI, United Arab Emirates — The United Arab Emirates said it is halting all trade and financial transactions with Iran, adding further economic pressure on the Islamic Republic as the Trump administration pushes to isolate it.
The decision, announced soon after the Emirati government accused Iran of launching missiles toward its territory, was made “in light of regional escalations that undermine regional and international peace and security,” Afra Al Hameli, a spokesperson for the Emirati Foreign Ministry, said in a statement late Tuesday. She added that the UAE was “firmly committed to safeguarding the integrity of the international financial system.”
The UAE, located just 50 miles from Iran across the Persian Gulf, has nurtured close economic and cultural ties with the Islamic Republic for decades, despite political tensions between the two countries.
Iranian-Emirati trade was worth roughly $28 billion in 2024, when the UAE was Iran’s largest source of imports — ferrying electronics, precious metals, and other goods to the Islamic Republic — according to World Trade Organization data.
Analysts say that trade through Dubai, the UAE’s largest city, has long been key to Iranian efforts to evade sanctions, eliciting complaints and pressure from US authorities in the past. Emirati officials say that they crack down on any sanctions violations when they find them.
The Trump administration has been keen to increase economic pressure on Iran while trying to find a resolution to the nearly six-month war — which has left Iran with significant control over shipping in the Strait of Hormuz, the narrow waterway that is a key transit route for oil and gas. Last week, Scott Bessent, the US treasury secretary, threatened to “apply measures like have never been seen in the history of the economic isolation” of a country.
It is unclear if the United States played a role in the UAE’s decision to halt trade with Iran. The announcement came hours after a call from President Donald Trump to the Emirati leader, Sheikh Mohammed bin Zayed Al Nahyan.
And in a separate call Tuesday, Secretary of State Marco Rubio and Sheikh Tahnoon bin Zayed, the Emirati national security adviser, discussed efforts to hold Iran accountable for ongoing attacks, according to a State Department spokesperson, Tommy Pigott.
The Emirati Foreign Ministry did not respond to a request for comment about the motivation and timing of the decision.
It is also unclear how seriously and swiftly the Emirati government will move to enforce a suspension of economic ties.
Esfandyar Batmanghelidj, chief executive of the Bourse & Bazaar Foundation — a London-based think tank focused on Iran’s economy — expressed skepticism, saying the announcement does not necessarily indicate a change in policy. Instead, it could be read as “a moment of public diplomacy” directed at the United States, intended to signal that the UAE is “continuing to keep Iran at an arm’s length,” he said.
In reality, Iran and the UAE continue to be economically interdependent, Batmanghelidj said.
The Emirati government statement did not make it clear when the decision to halt trade was made or specify what prompted it. But last week, the UAE accused Iran of attacking an Emirati oil tanker traveling through the Strait of Hormuz.
On Tuesday, the Emirati Defense Ministry issued warnings of an incoming missile attack, later saying that two ballistic missiles launched from Iran had targeted maritime navigation and that one had fallen in Emirati waters. Iran denied carrying out those attacks, and has neither denied nor claimed responsibility for the recent tanker strikes.
Before the United States and Israel attacked Iran in February, setting off a regional conflagration, Emirati officials had been pursuing a strategy of diplomacy and economic engagement with Iran — their much larger neighbor — hoping that would insulate the UAE from any conflict.
The war shattered that assumption, and ties between the UAE and Iran rapidly soured as the UAE, which hosts a major US military base, bore the initial brunt of Iran’s retaliation, reporting more than 2,700 ballistic missile and drone attacks from Iran.
In March, the Emirati government ordered the closure of a historic Iranian hospital in Dubai, as well as a cultural club and several schools — all of which officials said were connected to Iran’s government. The Emirati government also began revoking the visas and residency permits of some Iranian expatriates, stranding many abroad.
Eventually, the Emirati military carried out secret strikes on Iran, according to two current and former senior US officials, who spoke on the condition of anonymity to discuss operational matters.
After the United States and Iran reached a ceasefire agreement in April, and later, a preliminary peace deal in June, tensions between the UAE and Iran eased significantly, with direct contact between senior officials and the resumption of flights between the two countries.
As the truce has frayed in the months since, Iran largely focused its attacks on nearby Bahrain and Kuwait, sparing the UAE.
Still, Emirati officials have doubled down on their ties with Israel and the United States, viewing those relationships as essential to the UAE’s security as a small country in a tumultuous region.
The recent attacks on Emirati oil tankers elicited a strong condemnation from the Emirati government, and Saturday, the Emirati Foreign Ministry accused Iran of targeting shipping in the Strait of Hormuz as “a tool of economic coercion or blackmail” that constituted a “direct threat to the stability of the region.”
This article originally appeared in The New York Times.