The UAE cuts every trade and financial link to Iran after a missile it says came from Iranian territory
Two months of quiet normalisation between Abu Dhabi and Tehran ended with an emergency phone alert. Iran denies firing anything.
The United Arab Emirates has suspended trade, commercial dealings and financial transactions with Iran, accusing it of firing two ballistic missiles toward Emirati territory. Iran denies the attack, calling the accusation baseless, and relations between the two are strained again.
The UAE defence ministry said its air defences detected two ballistic missiles launched from the direction of Iran and immediately pushed emergency alerts to residents' phones. It assessed that the targets included maritime traffic areas: one missile fell into waters outside Emirati territorial seas, the other inside the country.
The foreign ministry then announced that, because "regional escalation is undermining regional and international peace and security," the UAE would suspend "all trade, commercial dealings and financial transactions with Iran until further notice."
Iranian foreign ministry spokesman Esmaeil Baghaei denied that Iran had fired on the UAE, saying the accusation "contradicts the principle of good neighbourliness and undermines continuing efforts to build trust between regional states." He said parties should avoid levelling baseless charges at Iran to prevent further instability.
Baghaei placed the dispute in the wider conflict, accusing the United States and Israel of staging what he called false-flag operations in recent years — the Iranian position being that accusations against it are part of a larger political and security contest rather than isolated incidents.
The missile dispute interrupts more than two months in which the two had been trying to cool things down. After the US and Israel went to war with Iran in February, relations deteriorated quickly, and Iran directed much of its military retaliation at Gulf states including the UAE, accusing them of assisting the operation.
During that phase the UAE was among the worst affected of Washington's Arab partners, absorbing close to 3,000 missile and drone attacks. It struck back in several rounds, taking the hardest line on Iran of any of the Gulf neighbours.
The June memorandum of understanding between Washington and Tehran eased things for a while. After it began to unravel in early July, Iranian attacks shifted toward Bahrain, Kuwait and Jordan.
In recent months the UAE had restored diplomatic and economic channels with Iran while deepening military cooperation with Israel and the United States, saying repeatedly that it wanted to avoid being drawn further into a wider regional war.
As things calmed, banking activity in Dubai's financial district resumed, some trade between Dubai and Iranian ports restarted, and a number of Iranian flights quietly resumed. Authorities also began allowing back some of the roughly 20,000 Iranians with UAE residency who had been stranded abroad when the war began.
That recovery has been under strain. This incident may break the relative stability of recent months: before it, the UAE had recorded only one false alarm, in June, and this emergency alert is the first triggered by a real security event in some time.
Earlier this month the UAE accused Iran of attacking vessels operated by the Abu Dhabi National Oil Company transiting the Strait of Hormuz. Iran has continued hard military rhetoric in recent days and continues to restrict passage through the waterway.
Hormuz connects the Gulf's main producers to world markets and is a critical energy route. Iran and the United States disagree over how it should be managed, commercial shipping is visibly affected, and concern about a wider conflict is rising.
President Trump said on 18 August that there are no negotiations underway with Iran. With the conflict close to six months old and few diplomatic signs, energy markets remain closely focused on the region.
Oil rose for a third session on the tension: WTI traded at $84.30 a barrel and Brent at $90.16 on Wednesday. American Petroleum Institute figures showed US crude stocks down about 300,000 barrels last week, with distillate inventories including diesel also lower — though the market's attention stays on whether the conflict and shipping risk widen further.