The United Arab Emirates’ decision to halt all trade and financial transactions with Iran threatens one of Tehran’s most important routes for imports, petroleum-product sales and access to international commercial and financial networks.
The UAE Foreign Ministry said this week that all trade, commercial exchanges and financial transactions with Iran had been halted until further notice.
Afra Al Hameli, director of the Strategic Communications Department at the UAE Ministry of Foreign Affairs, said the decision came “in light of regional escalations that undermine regional and international peace and security.”
The UAE halted trade with Tehran a day after Donald Trump spoke by phone with UAE President Sheikh Mohamed bin Zayed, though it is unclear whether the decision was connected to Trump’s “Economic D-Day” campaign against Iran, announced later on Wednesday.
Trade between the two countries had already been severely disrupted after the war began in late February, when Iran launched attacks on the UAE and shipping through the Strait of Hormuz was curtailed.
In late June, however, Mohammad-Sadegh Ghannadzadeh, a deputy at Iran’s Trade Promotion Organization, said commercial exchanges with the UAE were gradually resuming through Jebel Ali Port. He said goods and containers stranded during the war were again being cleared and moved toward Iran.
The latest UAE announcement now casts doubt on the continuation of that channel.
Al Hameli also stressed that the UAE remains committed to protecting the integrity of the international financial system, complying with international law and applying the highest global standards.
That position is significant because even if political tensions eventually ease, Iranian businesses would still face serious restrictions stemming from US sanctions and Iran’s continued status as a high-risk jurisdiction subject to a Financial Action Task Force call for countermeasures.
One of Iran’s most important trading partners
The importance of the UAE to Iran can be seen in the latest official partner-by-partner trade figures available from Iranian customs.
During the first 10 months of the Iranian fiscal year that began in March 2025, Iran exported around $6.5 billion worth of non-oil goods to the UAE, equivalent to 14.3% of its non-oil exports.
Iran imported approximately $14.8 billion worth of goods from the UAE during the same period, accounting for 30.2% of its total imports.
Before the war, the UAE was therefore Iran’s largest supplier of goods and its third-largest destination for non-oil exports, behind China and Iraq.
Its importance extended well beyond ordinary merchandise trade. The UAE was also the largest destination for Iranian fuel oil, or mazut, and a market for other petroleum products.
A blow to mazut exports and fuel supply
Data from commodity intelligence firm Kpler, reviewed by Iran International, show that Iran exported an average of around 256,000 barrels per day of fuel oil in 2025.
Nearly 70% went to the UAE, making it by far Iran’s largest market for the product.
A prolonged halt in trade therefore threatens not only Iran’s non-oil exports but one of its most important outlets for petroleum products.
The UAE had also been among the destinations for Iranian liquefied petroleum gas, or LPG, although China accounts for the large majority of Iranian LPG exports. Iran’s total LPG exports generate more than $10 billion in annual revenue.
The UAE relationship is also important from the opposite direction.
An internal Iranian Oil Ministry report previously reviewed by Iran International showed that Tehran had increasingly relied on barter arrangements to meet domestic fuel shortages, exchanging part of its mazut exports for gasoline and diesel, particularly through traders operating in the UAE.
Iran is already struggling with a gasoline supply deficit, while officials have discussed measures ranging from tighter rationing to higher fuel prices.
Restricting access to the UAE could therefore affect not only export revenue but Iran’s ability to obtain products and refined fuels needed by the domestic market.
The end of Dubai’s role as Iran’s gateway to global trade?
The UAE’s importance to Iran has never been limited to direct bilateral trade.
For decades, Dubai has served as one of the principal re-export hubs for goods entering Iran, allowing Iranian companies to obtain products manufactured in countries with which direct trade is difficult, costly or restricted.
US sanctions and Iran’s exclusion from much of the international banking system have made this intermediary role particularly important.
Goods manufactured in Europe and Asia have routinely entered Iran through UAE-based traders and logistics networks, while Iranian companies have also used Dubai as a route to reach other markets.
The financial dimension is equally important. Dubai has long been a center for Iranian exchange houses, trading companies and intermediaries that help move money across borders despite Iran’s restricted access to the global financial system.
US sanctions packages targeting Iranian oil, petrochemical and procurement networks have repeatedly designated companies and individuals based in the UAE for alleged roles in facilitating transactions on Tehran’s behalf.
A broad and sustained UAE crackdown would therefore affect more than the physical movement of goods. It could also constrain financial, logistical and commercial networks that Iran has spent years using to mitigate its international isolation.
A major new gap for Iran’s economy
The latest available Iranian customs breakdown shows that merchandise trade between Iran and the UAE totaled about $21.3 billion in just the first 10 months of the previous Iranian fiscal year.
But even that figure understates the UAE’s economic importance because it does not capture Dubai’s wider role as a re-export, logistics and financial center for Iranian businesses.
Iran is now confronting the UAE halt while already under pressure from sanctions, foreign-currency constraints, weaker foreign trade and disruptions to energy exports.
Alternative routes through Oman, Iraq, Turkey and other neighboring countries can keep some trade moving, but they lack the combination of proximity, port infrastructure, financial connectivity and established commercial networks that Dubai offered.
The UAE has given no timetable for lifting its suspension.
For Iran, the risk is therefore not simply the loss of billions of dollars in bilateral trade. A prolonged halt could close one of its most important gateways to the global economy.
The original article was published on Iran International