DUBAI — The United Arab Emirates (UAE) said it was suspending all trade and financial transactions with Iran “until further notice” after two Iranian ballistic missiles fell into the sea off the Emirati coasts on Tuesday. Iran denied firing the missiles.“In light of regional escalations that undermine regional and international peace and security, all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” the UAE’s Foreign Ministry said in a statement early Wednesday.It said the decision was made in “light of escalations that undermine peace and security in the region”.The statement came after the UAE’s Ministry of Defense said its air defenses detected two ballistic missiles launched from Iran, with one falling outside the country’s territorial waters and the other landing within them.In a follow-up statement, the ministry said the missiles had been “targeting maritime traffic” and promised to “resolutely confront any attempt to undermine the security of the nation or maritime navigation in the region”.Iran’s Ministry of Foreign Affairs rejected the accusation as “baseless”, with spokesman Esmaeil Baghaei suggesting it was a “false flag operation” amid the war launched by the United States and Israel against his country.Baghaei warned the claim “contradicts the principle of good neighbourliness” and urged regional parties to steer clear of what he called unfounded claims against Tehran, and argued that any honest assessment of the situation must also weigh the “malicious actions” of the US and Israel.The UAE is one of Iran’s largest commercial partners, ranking second only to China. Trade between the two countries had been expanding even as the US continued tightening sanctions on the regime.Last week, vessels belonging to the UAE’s state oil company were targeted by Iran while transiting the Strait of Hormuz, the UAE’s state news agency said.After the US and Israel launched a war on Iran in February, Tehran responded by firing salvos of missiles and drones at the region’s US allies. Tuesday’s attack came a day after a 60-day window for US-Iranian peace talks expired without a breakthrough in the more than five-month-old conflict.The trade embargo comes as the US maintains a naval blockade on Iranian ports, with President Trump signaling a pivot toward economic pressure, rather than military pressure, to compel Tehran into accepting US demands.Mark Kimmitt, a retired US general and former assistant secretary of state, told Al Jazeera the UAE’s trade embargo could hit Iran harder than anything Washington has imposed, with Dubai having quietly become Iran’s most important trading partner, edging out both China and Turkey to supply roughly a third of everything Iran imports each year.The UAE had suspended direct cargo shipping between the two countries in early March, just days after the war began, and resumed trade only in late June via Dubai’s Jebel Ali Port.“I don’t think that you can overstate or understate the importance of the trade, both financial and goods trade, between Dubai and Iran,” Kimmitt said.“In many ways, the embargo being put on by the UAE is even more significant than the embargo being put on by the United States,” he said.Oil prices are hovering above $90 a barrel, as talks between Iran and the United States remain at an impasse.Brent crude, the global oil benchmark, gained 1.3% to trade at $92.20 a barrel shortly after 5 a.m. ET. WTI, the US benchmark, rose by a similar margin to trade at $85.24 a barrel.Brent is now trading at its highest level in almost a month, as traders price in a prolonged disruption to oil flows through the Strait of Hormuz.Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, said Tuesday that Hormuz would remain shut until the US meets conditions of the Memorandum of Understanding agreed in June, which include lifting the blockade of Iranian ports, removing oil sanctions, and unfreezing Iranian assets.
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