UAE Imposes Indefinite Trade Embargo on Iran

The UAE on Wednesday imposed an indefinite trade embargo on Iran after accusing Iranian forces of firing two ballistic missiles at the country, a charge Tehran denied.

In a statement released early Wednesday, the UAE Foreign Ministry said the decision was taken “in light of escalating developments threatening regional peace and security.” The statement read: “All commercial activities, goods exchanges, and financial transactions with Iran will be suspended until further notice.”

The statement came after the UAE Defense Ministry said its air defense systems detected two ballistic missiles launched from Iran, one landing outside its territorial waters and another inside them. In a follow-up statement, the ministry said the missiles had “targeted maritime operations” and pledged to “firmly confront any plots undermining national security or maritime activity in the region.”

Iran's Foreign Ministry rejected the accusation as “baseless,” with spokesman Esmaeil Baghaei calling it a “false flag campaign” amid what he described as a US- and Israeli-led war against his country. Baghaei warned the claim “contradicts the principles of good neighborliness” and urged regional parties to steer clear of what he termed unfounded allegations against Tehran, arguing that any honest assessment of the situation must also consider the “malicious actions” of the US and Israel.

Tuesday's attack came one day after a 60-day deadline for US-Iran peace talks expired without a breakthrough in the conflict now spanning more than five months. During the first six weeks of the war, Iran targeted the UAE more than any other Gulf state, launching over 530 ballistic missiles, dozens of cruise missiles, and more than 2,200 drones at what it described as US assets. Tuesday's attack was the first aimed at the UAE since May, and came days after Abu Dhabi accused Tehran of attacking two ships owned by its state-run ADNOC in the Strait of Hormuz. Iran has not claimed responsibility for the ADNOC attacks.

The trade embargo comes as the US maintains a naval blockade on Iranian ports, with President Trump signaling a shift toward economic rather than military pressure to force Tehran to accept US demands.

Mark Kimmitt, a retired US general and former assistant secretary of state, told Al Jazeera the UAE's trade embargo could hurt Iran more severely than any measure Washington has imposed, as Dubai has quietly become Iran's most important trading partner, surpassing both China and Turkey, supplying about one-third of Iran's total annual imports. The UAE suspended direct cargo shipping between the two countries in early March, just days after the war began, and only resumed trade in late June via Dubai's Jebel Ali port.

“I don't think you can overstate or understate the importance of the trade, both financial and goods, between Dubai and Iran,” Kimmitt said. That dependence runs deeper than goods on ships, as Dubai, a global financial hub, has long given Iran a discreet way to move money through international sanctions, severing a route Tehran has relied on for years. “In many ways, the embargo the UAE has imposed is more significant than the US embargo,” he said.

The retired general said he does not expect other Gulf states to follow suit immediately, predicting a “wait-and-see” approach even as Iranian attacks continue. But he said the UAE's move is significant enough that Tehran could view it as nearly an act of war, comparing it to the near-total embargo the US imposed on Japan after World War II.