The United Arab Emirates (UAE) has suspended all trade, commercial exchanges, and financial transactions with Iran after accusing Tehran of launching two ballistic missiles towards the Gulf state, marking a fresh deterioration in ties between the two nations. This comes amid widespread tensions across West Asia as the Iran-US conflict shows no signs of easing.
The UAE defence ministry said its air defence systems detected two
ballistic missiles launched from Iran on Tuesday. The incident triggered an emergency alert on residents’ phones and was described as the first direct Iranian attack on the UAE since May, The Times of India reported. The ministry said its assessment showed the missiles were targeting maritime traffic. Both fell into the sea, one outside UAE territorial waters and the other within them. No damage or injuries were reported.
Here’s the latest update after the missiles were launched.
UAE pauses economic relations with Iran
Following the missile incident, the UAE foreign affairs ministry announced a suspension of economic engagements with Iran.
“In light of regional escalations that undermine regional and international peace and security, all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” a statement released by the foreign affairs ministry read.
Trade between the two countries had resumed in some areas, while some Iranian flights had also quietly returned to the UAE. Dubai’s financial district had begun filling up again with bankers, while authorities had allowed some 20,000 Iranian residents who were outside the country to return to the
UAE. The latest emergency alerts were the first in a long time, apart from a false alarm in June.
Iran denies launching ballistic missiles
While the UAE has accused Iran of launching missiles towards the Gulf state, Tehran has rejected the allegations. Iranian foreign ministry spokesperson Esmail Baghaei described them as “unfounded” and “harmful to regional efforts to rebuild trust”.
He “completely rejected” the UAE claim and expressed regret over the accusations against Iran. “This behaviour is contrary to the principle of good neighbourliness and disrupts ongoing efforts to strengthen trust between regional countries and prevent the escalation of insecurity in the region,” Baghaei said.
He also called on regional parties to refrain from making baseless accusations against Iran. The denial came shortly after the UAE defence ministry said its air defence systems had detected the two ballistic missiles.
UAE-Iran ties face fresh strain
The latest confrontation comes after more than two months of efforts by Abu Dhabi and Tehran to reduce tensions that had escalated sharply following the
US and Israeli war against Iran, which began on February 28.
During the initial escalation, Iran launched missile and drone attacks against neighbouring Gulf states, including the UAE, accusing them of enabling US and Israeli military operations and allowing their territory to be used against Iran. The UAE was among the Gulf nations most targeted, sustaining almost 3,000 missile and drone attacks. Abu Dhabi also struck Iran.
Tensions eased after the US and Iran reached a memorandum of understanding in June. However, the agreement began to fall apart in July, after which Iran shifted its military focus towards Bahrain, Kuwait and Jordan.
In recent months, the UAE has sought to rebuild diplomatic and economic channels with Iran while maintaining close military ties with Israel and the United States. Emirati officials have repeatedly said they want to avoid being drawn further into a wider regional conflict.
The latest missile incident comes amid rising tensions over the Strait of Hormuz, a key route for global oil and gas shipments. The UAE has accused Iran of attacking ships operated by Abu Dhabi National Oil Company, while Tehran has restricted traffic through the strait.
On Tuesday, an unidentified projectile struck a vessel sailing out of the strait off Oman, damaging its engine room and causing one casualty. Another cargo vessel was hit by multiple projectiles southeast of Yemen’s Mokha and declared a “constructive total loss”.
Trump threatens Oman
The maritime tensions have also pulled Oman into a dispute between Washington and Tehran over shipping through the Strait of Hormuz. US President Donald Trump threatened Oman over an emerging deal between Muscat and Tehran to manage traffic through the waterway, according to two regional officials cited by The Associated Press.
The proposed arrangement included joint Iranian-Omani management of the strait’s exit route and voluntary vessel fees for security and environmental protection. Trump later posted a map depicting the Strait of Hormuz as US territory, drawing a sharp response from Iran.
Trump has previously threatened Oman over its dealings with Iran. In May, he told reporters during a Cabinet meeting that Oman “will behave just like everybody else, or we will have to blow them up”.
Strait of Hormuz remains closed
Iran has said the Strait of Hormuz will not fully reopen until Washington meets its conditions, including lifting sanctions, unfreezing assets and ending military operations. Iranian parliamentary speaker Mohammad Bagher Ghalibaf said the strait would remain closed until the US fulfils its commitments.
Trump, however, said on Tuesday that the strait was “open and operating” and that no talks with Iran were planned. He also said the US blockade remained in force and claimed all mines had been removed.
(With inputs from agencies)
 "UAE suspends trade ties with Iran after missile launch: Key developments")
