UAE's indefinite trade embargo puts further pressure on Iranian economy

Analysts said that the United Arab Emirates’ decision to indefinitely suspend all financial and economic transactions with Iran will have a harsh impact on Iranians.

The announcement on Wednesday comes after the federation accused Tehran’s forces of firing two ballistic missiles at its territory.

Abdulkhaleq Abdulla, an expert in UAE foreign policy and Gulf-Iran relations, said the move would deepen the hardship of ordinary Iranians already under strain.

“First and the foremost what comes to mind ... is the impact on 90 million Iranians who are in [a] very difficult situation already and this is going to make their life even more miserable,” he said.

Iran is heavily reliant on its neighbour for critical imports and access to financial markets, and Abdulla said the embargo “is going to be very painful for Iran as long as it lasts".

“Iran has always been a very important trading partner. There is something like $20 to 25 billion dollars trade between us,” he said.

But he added that, for the UAE in relation to its total foreign trade, this “is really a drop [in the ocean] in our trade with the entire world”, constituting about three per cent.

Early in the Iran-US conflict, the UAE regularly came under fire from Iran, and most trade between the countries, which had once been important trading partners, ground to a halt.

Iran’s state-run IRNA news agency reported that some maritime trade resumed in late June as hostilities eased.

The UAE’s decision puts further pressure on an Iranian economy already facing severe restrictions on trade and access to international markets.