Abu Dhabi halted trade, commerce and all financial transactions with Tehran on Tuesday, Aug. 18, after saying two Iranian ballistic missiles fell into the Persian Gulf; Iran denies firing them.
The United Arab Emirates halted trade, commercial exchanges and financial transactions with Iran until further notice. The UAE said two ballistic missiles launched from Iran flew toward the country and fell into the Persian Gulf. Iran denied launching them. As of April the UAE accounted for 30.43% of Iran's imports and 12.5% of its exports — the biggest single hole either side of Iran's trade ledger. The rupture isolates Tehran beyond the direct loss of a customer. As NBC News put it, "Iran therefore depends heavily on the UAE, not because the UAE itself produces one-third of Iran's imports, but because it serves as a major gateway for Iran to access third-country goods and commercial infrastructure." TIME's assessment: "The impact on the Iranian economy could be significant."
What the halt cuts off besides cargo
- The UAE supplies roughly 22% of the about $23 billion in services — shipping, insurance, trade paperwork — that Iran buys abroad each year, the plumbing that makes the goods trade work.
- Total two-way trade has been running $16–28 billion a year, up from UAE exports to Iran of about $5.2 billion in 2018 (Iran International).
- Retired US Gen. Mark Kimmitt, a former assistant secretary of state, told Al Jazeera the UAE step is "even more significant than the embargo being put on by the United States."