The United Arab Emirates announced an indefinite trade embargo on Iran on Wednesday, accusing Iranian forces of firing two ballistic missiles at its territory. Iran denied launching missiles and described the reported assault as a “false flag operation” by Israel and the USA.
The UAE’s embargo has been described as extremely important by analysts, who say Iran is closely reliant on its neighbour for essential imports and entry to monetary markets.
“In some ways, the embargo being placed on by the UAE is much more important than the embargo being placed on by the USA,” Mark Kimmitt, a retired US basic and former assistant secretary of state, instructed Al Jazeera, referring to US sanctions and the continued American naval blockade of Iranian ports.
The latest developments come shortly after the June 17 memorandum of understanding (MoU) between the US and Iran lapsed on Monday, with little prospect of being renewed.
Right here is extra concerning the UAE announcement and the way its embargo may have an effect on Iran.
What has the UAE introduced?
In a press release, the UAE’s Ministry of International Affairs stated: “All commerce, industrial exchanges and monetary transactions with Iran have been halted till additional discover.”
The choice was made in “gentle of escalations that undermine peace and safety within the area”, it added.
The assertion got here quickly after the UAE’s Ministry of Defence reported that its air defences had detected two ballistic missiles it claimed have been launched from Iran, with one falling within the nation’s territorial waters and the opposite exterior.
In a follow-up assertion, the ministry stated the missiles have been “focusing on maritime visitors” and promised to “resolutely confront any try and undermine the safety of the nation or maritime navigation within the area”.
Nevertheless, the Iranian Ministry of International Affairs rejected the accusation as “baseless”, with spokesperson Esmaeil Baghaei suggesting it was a “false flag operation” amid the US-Israel warfare on Iran.
Has Iran attacked the UAE earlier than?
Within the first six weeks of the warfare, which started with US-Israeli strikes on Tehran that killed then-Supreme Chief Ayatollah Ali Khamenei on February 28, Iran hit back with drone and missile strikes on US navy property in addition to vitality and different infrastructure in a number of neighbouring Gulf international locations. It struck the UAE greater than every other nation, nevertheless.
In all, Iran launched greater than 530 ballistic missiles, 26 cruise missiles and greater than 2,200 drones in direction of targets within the UAE, which it has described as US property within the nation. Nevertheless, the UAE says civilian websites have additionally been hit both by missiles or by particles from missiles intercepted by US-supplied THAAD and Patriot missile defence programs.
On March 1, the day after the US and Israel launched strikes on Iran, Dubai’s port of Jebel Ali, the biggest constructed deep-water harbour on the planet, was struck.
A day later, a fireplace broke out at Musaffah gas terminal in southwest Abu Dhabi when it was struck by a drone. Then, falling particles from a drone interception brought on a fireplace on the Fujairah oil terminal alongside the jap coast of the UAE. No accidents have been reported.
On March 17, oil loading on the port of Fujairah was partly halted after an Iranian drone assault brought on a fireplace on the export terminal, whereas operations on the Shah gasfield remained suspended after an earlier assault, officers stated. Fujairah lies simply exterior the Strait of Hormuz and is often the outlet for a couple of million barrels per day of the state firm’s Murban crude.
One other important goal within the UAE was its Barakah Nuclear Energy Plant, close to which a fireplace began following a drone strike on Might 18.
Total, Iranian strikes have killed 15 folks within the UAE, together with two navy personnel, one civilian contractor and 12 different civilians, and injured 246.
The newest missile assault is the primary on the UAE since Might, coming days after Abu Dhabi accused Tehran of attacking two of its state-owned Abu Dhabi National Oil Company (ADNOC) vessels within the Strait of Hormuz. Iran has denied attacking the ADNOC vessels.
How a lot commerce does the UAE do with Iran?
In accordance with the latest commerce information from the Observatory of Financial Complexity (OEC), official items commerce between the UAE and Iran amounted to $6.2bn in 2023. The UAE’s exports to Iran have been valued at roughly $5.8bn, with imports of about $450m price of products in return.
That 12 months, Iran imported telephones price $2.81bn from the UAE. Different merchandise imported by Iran have been computer systems, tobacco and nuts. Iran exported nuts, fruits, spices, crustaceans and constructing stone to the UAE that 12 months.
In Might 2024, the 2 international locations held the primary session of their Joint Financial Committee summit in Abu Dhabi, the place they agreed to deepen cooperation in transport, logistics, agriculture, renewable vitality and tourism.
However moreover formal commerce between the 2 international locations, the UAE has additionally lengthy served as an important informal trade conduit for Iran, say analysts, enabling it to bypass worldwide financial sanctions.
When Western exporters stopped promoting merchandise to Iran straight, retailers in Dubai would purchase after which re-export shopper items, industrial tools and meals into Iran.
Iran is without doubt one of the most closely sanctioned international locations on the planet, having been topic to US sanctions for many years. Total, sanctions have brought on Iran’s gross home product (GDP) per capita to fall from $8,000 in 2012 to $5,000 in 2024.
Final week, US Treasury Secretary Scott Bessent said the US plans to accentuate financial stress on Iran, partly by the continued US naval blockade of Iranian ports. The US may also apply measures which have “by no means been seen within the historical past of financial isolation on a rustic”, Bessent stated with out giving particulars.
Does the UAE embargo matter a lot for Iran’s financial system?
Kimmitt instructed Al Jazeera that the UAE’s commerce embargo may certainly damage Iran greater than any US sanctions so far.
He famous that Dubai has quietly turn into Tehran’s most essential buying and selling companion, surpassing China and Turkiye and supplying roughly one-third of Iran’s annual imports.
The UAE suspended direct cargo delivery between the 2 international locations in early March, simply days after the warfare started, and resumed commerce solely in late June by way of Dubai’s Jebel Ali Port.
The Jebel Ali Port on the northern finish of Dubai is the biggest constructed deep-water harbour on the planet and serves cargo from the Indian subcontinent, Africa and Asia.
Operated by the Dubai-based DP World, the port has 4 sprawling container terminals that may berth among the world’s largest ships. The port will not be solely a essential world cargo hub, however a lifeline for Dubai and surrounding emirates, serving as the purpose of entry for important imports. It has additionally lengthy been a central hub by which Iran traded by way of the UAE, however was additionally hit by Iranian missiles early within the warfare.
In July, after the US resumed strikes on Iran regardless of the MoU being in place, an explosion on the port brought on a fireplace.
“I don’t assume which you can overstate or understate the significance of the commerce, each monetary and items commerce, between Dubai and Iran,” Kimmitt stated.
That reliance runs deeper than items on ships, given Dubai’s standing as a worldwide monetary hub, which Kimmitt stated has lengthy given Iran a discreet option to transfer cash round worldwide sanctions, chopping off a route Tehran has lengthy relied on for years.
Kimmitt added that the UAE’s transfer is important sufficient that Tehran may interpret it as “bordering on an act of warfare”, likening it to the near-total embargo the US imposed on Japan after World Struggle II.
