UAE suspends all trade and financial dealings with Iran over missile claim

The United Arab Emirates has announced a complete suspension of all trade and financial transactions with Iran, citing an alleged Iranian missile attack directed at its shipping. The decision was announced on Tuesday (August 18, 2026) by the UAE Foreign Ministry’s Communications Director, Afra Al Hameli.

“In light of regional escalations, all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” Al Hameli said.

The move comes as Abu Dhabi accused Tehran of firing two ballistic missiles towards the country, the first such incident since May. According to a statement from the UAE Ministry, one missile fell outside the country’s territorial waters, while the second landed within its territorial waters. A subsequent statement said the missiles were targeting maritime navigation and fell into the sea.

Iran has categorically denied the accusation. Foreign Ministry Spokesman Esmaeil Baqaei rejected the UAE’s claim as harmful to regional trust and security efforts.

The UAE has historically maintained deep economic and cultural ties with Iran, despite international sanctions against Tehran. A sizeable Iranian community resides in the Emirates, and trade links between the two Gulf neighbours date back centuries. The suspension marks a significant rupture in these relations.

This is not the first measure taken by the UAE against Iran during the current West Asia conflict. Early in the war, which began on February 28, the UAE recalled its ambassador and ordered the closure of Iranian-linked schools and a hospital in Dubai. At the time, a UAE official said institutions directly linked to the Iranian regime and the Islamic Revolutionary Guard Corps (IRGC) would be closed for violating UAE laws.

The UAE was heavily targeted in the initial weeks of the conflict, with nearly 3,000 missiles and drones directed at the country, more than any other in the region. However, after a memorandum of understanding between Iran and the United States came into effect in June — an agreement that has since collapsed — the UAE reported no attacks, unlike other Gulf states.

Tuesday’s missile alert was the first such warning since a false alarm in June and an alert in July for an attack that did not enter UAE territory. The last confirmed missile warning before that was in early May. However, tankers operated by the UAE’s state-owned oil company ADNOC have been repeatedly targeted in recent weeks, according to the UAE government.

The suspension of all trade and financial dealings with Iran is likely to have significant economic consequences for both countries, particularly for the Iranian community in the UAE and for businesses that have relied on these cross-border exchanges. The duration of the measure remains uncertain, pending further regional developments. The UAE has said it will continue to monitor the situation and may adjust its policies based on the security environment.