ALBAWABA- The United Arab Emirates has suspended all trade, commercial exchanges and financial transactions with Iran until further notice, the UAE Ministry of Foreign Affairs said Tuesday, in a major escalation of economic measures amid mounting tensions between Tehran and Abu Dhabi.
The ministry also rejected what it described as inaccurate claims about the status of the UAE’s economic relations with Iran, while emphasizing that the suspension remains in effect until further notice. At the same time, Abu Dhabi reaffirmed its commitment to dialogue, cooperation and regional integration, describing these as essential tools for advancing peace and stability.
The UAE Foreign Ministry also stressed that the country remains firmly committed to safeguarding the integrity of the international financial system in accordance with international law. The statement places the economic suspension within a broader effort by Abu Dhabi to balance its security concerns with its longstanding policy of maintaining diplomatic channels and regional economic ties.
The announcement came amid a rapid deterioration in relations between Iran and the UAE. Earlier Tuesday, the UAE Ministry of Defense said its air defenses had detected two ballistic missiles launched from Iran. The ministry initially said one missile fell outside the UAE’s territorial waters while the second fell within them, and confirmed that the country’s armed forces were on high alert and prepared to respond to any threat.
The incident was later understood by UAE authorities as involving missiles directed toward maritime traffic rather than an intentional strike on UAE territory, reducing the immediate risk of a direct attack on the mainland. Nevertheless, the episode underscored the heightened security risks facing the UAE as military tensions around the Strait of Hormuz intensify.
The economic measures also followed a phone call between UAE President Sheikh Mohammed bin Zayed Al Nahyan and US President Donald Trump. The two leaders discussed UAE-US cooperation and ways to strengthen bilateral ties, as well as the latest developments in the Middle East and efforts to address regional tensions. Their conversation came as US-Iranian diplomacy remained stalled following the expiration of a 60-day negotiating window.
The timing is particularly significant because Washington and Tehran have failed to extend the interim framework that was intended to provide space for negotiations toward a broader agreement.
Trump has ruled out an extension and has continued to increase pressure on Iran, while Tehran has hardened its position over the Strait of Hormuz and warned that it will respond to attempts to impose conditions it considers unacceptable. The broader confrontation has sharply reduced maritime traffic through the waterway, a vital route for global energy supplies.
The UAE has itself become increasingly exposed to the maritime confrontation. In recent days, Abu Dhabi has accused Iran of attacking vessels operated by the Abu Dhabi National Oil Company while they were transiting the Strait of Hormuz, describing the attacks as violations of freedom of navigation and calling for the waterway to be reopened.
Iranian officials, meanwhile, have intensified their criticism of Washington. Iranian parliamentary speaker Mohammad Bagher Ghalibaf accused the US administration of believing that increased pressure would force Tehran to accept concessions that were never included in the agreement. He specifically criticized US Treasury Secretary Scott Bessent and Defense Secretary Pete Hegseth, saying they were “way out of their league,” and urged Washington to stop waiting for what he portrayed as an unlikely diplomatic solution to a crisis created by US policy.
The UAE’s decision represents a significant shift in its economic posture toward Iran, particularly given the extensive commercial links that have historically connected the two countries. Dubai in particular has long served as an important commercial and financial gateway for Iranian businesses, making any broad suspension of trade and financial activity potentially consequential for companies and markets on both sides.
At the same time, Abu Dhabi’s insistence that it remains committed to dialogue and regional integration suggests that the measures are being presented as security and financial safeguards rather than a permanent abandonment of diplomatic engagement with Tehran. The UAE’s emphasis on international financial standards also signals an effort to align its response with wider efforts to protect the international financial system while responding to the escalating conflict.
The suspension comes as the wider Gulf faces mounting pressure from the breakdown in US-Iran diplomacy, threats to commercial shipping and increasingly direct military signaling. With Washington maintaining pressure on Tehran, Iran adopting a more confrontational posture and the Strait of Hormuz remaining at the center of the dispute, the UAE’s latest decision marks another significant step in the regional fallout from the collapse of the 60-day framework.
