UAE suspends trade with Iran after missile incident near Strait of Hormuz

DUBAI, United Arab Emirates — The United Arab Emirates has suspended all commercial and financial transactions with Iran indefinitely, citing Gulf conflict and escalating tensions. The decision followed a UAE Defense Ministry statement on August 18, 2026, that one of two ballistic missiles launched from Iran had landed in UAE territorial waters. The ministry said the missiles were assessed to have targeted vessels transiting the Strait of Hormuz. Iranian Foreign Ministry spokesperson Ismail Baghaei dismissed the accusation as "baseless" and said the UAE's position was inconsistent with the principle of good neighborly relations. He did not elaborate on Iran's position in further detail. According to Iranian customs data, the UAE was Iran's largest supplier between March and December 2025, accounting for $13.533 billion, more than a third of Iran's total imports over that period. The Emirates also serves as the main hub for Iran's external trade and the dirham market that supplies roughly 80 percent of the foreign currency needed for Iranian imports. Farshid Farzangan, a former head of the Iran-UAE Chamber of Commerce, said container shipping costs from Jebel Ali Port to Iran have risen from $4,000 to $8,000, while shipments routed through Mersin Port have reached $10,000. No further details on the duration or scope of the UAE suspension were immediately available.