UAE Suspends Trade With Iran After Reported Missile Strikes

Ships dock at the container terminal in the port of Khor Fakkan, in the United Arab Emirates, on July 14, 2026. —AFP via Getty Images The United Arab Emirates (UAE) announced Tuesday that “all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” alleging that Iran had fired two ballistic missiles toward it.

The country’s foreign ministry said the decision comes “in light of regional escalations that undermine regional and international peace and security.” Earlier Tuesday, the UAE’s Ministry of Defense reported that two missiles launched from Iran toward the country, both of which fell into the sea.

The statement said it “affirms its readiness to respond to any threats and to resolutely counter any attempts to undermine the security of the country or the safety of maritime navigation in the region.” Read More: Trump Again Threatens to Bomb Oman Esmaeil Baghaei, a spokesperson for Iran’s foreign ministry, rejected the Emirati claim on Tuesday, saying that it “undermines ongoing efforts to strengthen trust between countries in the region and prevent the escalation of insecurity,” according to the semi-official Fars news agency.

“The impact on the Iranian economy could be significant,” Simon Henderson, director of the Bernstein Program on Gulf and Energy Policy at the Washington Institute, tells TIME.

“The UAE is one of the top non-oil trading partners with Iran.” As of April, the UAE accounts for 12.5% of Iran’s exports and 30.43% of its imports, according to Iranian news agency WANA .

Iran’s dollar currently ranks as the least valuable currency in the world, and its government told a Russian news agency in April that the war has already cost it some $270 billion in direct and indirect damages.

Regional instability amid the war in Iran Stability in the region is fragile, as a number of incidents have been recently reported in the Strait of Hormuz .

On Tuesday, a vessel reported that it had been struck by an unknown projectile, causing damage to the engine room and a crew casualty, according to the U.K.

Trade Maritime Operations Centre (UKMTO).

Last Thursday, a separate vessel was struck by a drone.

The UAE has previously reported the detection of missiles coming toward it, most recently on July 12, when it confirmed that a missile fell outside of its borders.

In May, the defense ministry reported that it had intercepted six unmanned aerial vehicles within 48 hours that “attempted to target civilian and vital areas in the country.” One drone, launched from the direction of the UAE’s western border, struck an electricity generator near the Barakah Nuclear Energy Plant on May 17.

Its origin has not been confirmed and is under investigation.