The United Arab Emirates has halted all trade and financial dealings with Iran following reports of an Iranian missile attack targeting its vessels at sea.

Abu Dhabi announced the suspension on Tuesday, marking the most severe economic measure taken against Tehran since the Middle East war erupted in February. The move comes after the UAE accused Iran of firing two ballistic missiles towards the country, the first such attack since May.

“In light of regional escalations… all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” said Afra Al Hameli, UAE foreign ministry communications director.

End to relative calm

The announcement breaks a period of quiet in the UAE, which had not faced Iranian missile strikes since May after bearing the heaviest attacks during the early weeks of the conflict. Abu Dhabi has, however, accused Tehran of repeatedly targeting its tankers at sea in recent weeks.

UAE air defences detected the two ballistic missiles launched from Iran on Tuesday, with the first falling outside the country’s territorial waters and the second within them. A later statement clarified the missiles “were targeting maritime navigation and fell into the sea”.

Iran denies involvement

Iranian foreign ministry spokesman Esmaeil Baqaei rejected the UAE’s claim, calling it harmful to regional trust and security efforts. Tehran categorically denied launching any missiles towards the Emirates.

The first UAE statement came nearly two hours after a phone alert warned residents of a “potential missile threat”. It was the first such alert since July, when a warning was issued for an attack that ultimately did not enter UAE territory.

Tankers belonging to the UAE’s state-owned oil company ADNOC have been repeatedly targeted in recent weeks, according to Abu Dhabi.

Deepening rift

The UAE is home to a sizeable Iranian community and has been a major trading partner for US-sanctioned Iran. The two countries share deep cultural and historical ties as neighbours across the Gulf, with centuries-old links between coastal communities, trade routes and family networks.

Tuesday’s announcement is the latest measure against Iran by the UAE after it recalled its ambassador early in the conflict and shut Iran-linked schools and a hospital. In March, authorities ordered the closure of an Iranian state-linked hospital in Dubai, with schools and a community centre also shut down.

A UAE official said at the time that “certain institutions directly linked to the Iranian regime and IRGC will be closed under targeted measures” after they were found to have violated UAE laws.

When the Middle East war began on 28 February, the UAE bore the brunt of Iran’s attacks, with nearly 3 000 missiles and drones directed at the country, more than anywhere else in the region. After a memorandum of understanding between Iran and the United States came into effect in June, which has since collapsed, the UAE reported no attacks, unlike other Gulf states.

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