To what extent could the UAE’s tightening of its trade and financial restrictions affect Iran? A question that is gaining increasing importance in light of Tehran's reliance on Dubai as one of its most prominent gateways to global trade and finance, which places the emirate at the heart of efforts to exert economic pressure on the Islamic Republic.
According to the Wall Street Journal, the success of US President Donald Trump's strategy to pressure Iran depends largely on the role that the UAE can play, especially Dubai, which has transformed over the decades into a major center for trade and finance for the Iranians.
The newspaper believes that tightening measures against financial and commercial networks linked to Iran, including networks suspected of links to the Iranian Revolutionary Guard, may be one of the most effective tools of economic pressure against Tehran.
Dubai derives its importance from its location as a regional commercial and financial center, and from the broad economic relations that have developed between it and Iran over the years, making it one of the most prominent channels that Tehran relies on to obtain goods and access international markets despite Western sanctions.
The Associated Press also quoted Muhammad Farzanjan, a professor of Middle East economics at the German University of Marburg, as saying that the UAE has gained special importance for Iran as a re-export center, and has helped it absorb part of the shocks resulting from the sanctions.
Dubai...the key to American pressure on Iran
The UAE Ministry of Foreign Affairs said, in a statement, that the UAE decided “to stop all activities, commercial exchanges, and financial transactions with Iran until further notice,” noting that the decision was taken “in light of the regional escalation that has undermined regional and international peace and security,” according to Reuters.
According to World Trade Organization data, the UAE was the largest source of Iranian imports during 2024, as the value of Iranian imports from it amounted to about $21 billion, equivalent to 30.6% of the country’s total imports.
These numbers highlight the pivotal role that the UAE plays in Iranian trade, and explain the special importance that Dubai has in the strategy of economic pressure on Tehran.
According to data from the Observatory of Economic Complexity (OEC), mobile phones and computers topped the list of UAE exports to Iran, while goods reaching the Iranian market via the UAE also include electronics, industrial machinery and equipment, spare parts, medicines and consumer goods, which reflects the importance of Dubai as a re-export center for the Iranian economy.
The UAE is in the crosshairs of US pressure on Iran
US Treasury Department data also indicate that the UAE was among the centers targeted by Washington as part of the pressure campaign on Iran, as it had previously imposed sanctions on individuals and companies based in the UAE, accusing them of facilitating financial transactions related to Iranian oil and helping to circumvent the sanctions.
The Wall Street Journal believes that any Emirati tightening of restrictions on commercial and financial activities related to Iran may increase pressure on one of the most important commercial and financial outlets available to Tehran. But at the same time, it indicates that implementing these measures is not an easy task, as some activities pass through front companies, intermediaries, exchange offices, and complex financial networks whose connections to Iran are difficult to trace.
The official Iranian News Agency (IRNA) reported that some maritime trade between the two countries resumed in late June as the intensity of hostilities subsided, after a period of turmoil that affected trade exchange between the two sides.
