The United Arab Emirates (UAE) has suspended all trade, commercial exchanges and financial transactions with Iran until further notice, following an alleged missile attack that has further strained ties between the neighbouring countries.
The UAE’s decision came after its Ministry of Defence said its air defence systems had detected two ballistic missiles launched from Iran towards the country.
According to the ministry, both missiles fell into the sea, with one landing outside the UAE’s territorial waters and the other falling within them.
Trade ties face fresh setback
Following the missile launch towards its territory, the UAE announced the suspension of trade and financial dealings with Iran, citing regional escalations that it said were undermining regional and international peace and security.
The move marks a significant deterioration in relations between Abu Dhabi and Tehran after a period of relative calm and comes amid growing tensions around the Gulf and the Strait of Hormuz.
UAE puts security forces on high alert
Earlier, the Ministry of Defence said the UAE remained on high alert and was fully prepared to respond to any potential threats.
In a post on X, the ministry said the first missile fell outside the country’s territorial waters, while the second landed within its territorial waters.
The ministry also said it was prepared to respond firmly to any attempt to undermine the UAE’s security, sovereignty and stability, while protecting its national interests and capabilities.
It urged the public to rely only on information issued by official authorities and avoid rumours and misinformation.
Iran rejects UAE’s accusation
Iran has rejected the UAE’s allegation that Tehran was responsible for the missile launches.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei, speaking early on Wednesday, described the UAE’s accusations as baseless. Tehran has therefore denied responsibility for the incident reported by the UAE a day earlier.
The latest dispute follows a series of incidents involving UAE-linked shipping in and around the Strait of Hormuz. UAE state-run WAM has reported attacks on vessels belonging to Abu Dhabi National Oil Co. while they were transiting the strategic waterway. Iran has not claimed responsibility for those attacks.
60-day talk window between US and Iran expires with no breakthrough
The suspension of economic ties comes at a particularly sensitive time for regional diplomacy.
A 60-day period established under a memorandum signed in June between Washington and Tehran expired on August 17 without a breakthrough. The 14-point memorandum was intended to open channels for technical talks aimed at ending the wider West Asia conflict and included discussions on issues such as the reopening of the Strait of Hormuz.
The UAE has maintained that it wants to avoid further escalation in the region.
However, the latest missile incident and Abu Dhabi’s decision to suspend trade with Iran represent a fresh setback to efforts aimed at easing tensions.
US President Donald Trump said on Tuesday that there were currently no talks taking place or planned with Iran.
The latest developments have consequently added to uncertainty across the Gulf, with the UAE reinforcing its security posture while simultaneously cutting economic ties with Iran ‘until further notice.’
