UAE Suspends Trade and Financial Ties With Iran After Missile Scare

The United Arab Emirates has suspended all trade, commercial exchanges and financial transactions with Iran, citing rising regional tensions and concerns over threats to regional and international security.

The decision was announced early Wednesday after the UAE said it had detected two ballistic missiles launched from Iranian territory. The move marks a significant escalation in relations between the two countries and comes amid growing security concerns around the Strait of Hormuz.

The UAE Foreign Ministry said the suspension of economic ties with Iran would remain in place until further notice. At the same time, the country reiterated that it continues to support dialogue, cooperation and regional integration as ways to promote peace and stability.

UAE reports Iranian missile launches

The UAE Defence Ministry said on Tuesday that it had detected two ballistic missiles launched from Iran.

According to the ministry, the missiles were assessed to have been targeting maritime traffic. Both missiles eventually fell into the sea, and no immediate damage was reported.

The incident was described as the first reported event of its kind since a May 4 strike on Fujairah port.

The UAE Interior Ministry also sent an emergency alert to residents following the reported missile threat. A subsequent message said the situation was safe and advised residents to resume normal activities.

Iran rejected the UAE's account. Iranian Foreign Ministry spokesperson Esmaeil Baghaei described the allegations as baseless.

Strait of Hormuz tensions rise

The latest development comes as tensions around the Strait of Hormuz continue to increase.

A 60-day period for US-Iran peace negotiations ended on Monday without a breakthrough, raising concerns that diplomatic efforts could fail and further military escalation could follow.

The Strait of Hormuz is a critical global shipping route, and disruptions in the area have already affected maritime traffic since February.

The UAE Defence Ministry said it remains prepared to respond to threats against the country's security and stability.

UAE-Iran maritime tensions

Relations between the UAE and Iran have also come under pressure following recent incidents involving shipping in the Strait of Hormuz.

The UAE has accused Iran of attacking vessels belonging to its state-owned energy company ADNOC while they were travelling through the strategic waterway.

Iran has not claimed responsibility for those incidents.

Iran's Islamic Revolutionary Guard Corps has previously warned that vessels linked to countries considered hostile to Tehran or those that fail to follow Iranian instructions could face action while passing through the strait.

The latest UAE decision to suspend trade and financial relations with Iran therefore comes amid a broader deterioration in regional security.

For now, the suspension covers trade, commercial exchanges and financial transactions and will remain in force until further notice.