UAE Halts All Trade And Commercial Exchanges With Iran Over Alleged Missile Attack

The United Arab Emirates has suspended all trade, commercial exchanges and financial transactions with Iran until further notice after accusing Tehran of launching two ballistic missiles towards the country.

The UAE Defence Ministry said its air defence systems detected two missiles launched from Iran on Tuesday. It said the missiles appeared to be targeting maritime traffic.

Both missiles fell into the sea, with one landing outside UAE territorial waters and the other inside them. No damage or casualties were reported.

Iranian Foreign Ministry spokesperson Esmaeil Baghaei rejected the UAE’s accusation on Wednesday and called it baseless.

The UAE Foreign Ministry said the decision to suspend economic ties was taken because of regional escalations that it said were threatening regional and international peace and security.

Missile alert in the UAE

The reported missile launches prompted an emergency alert on mobile phones across the UAE on Tuesday evening.

The warning was issued shortly after 6:30 p.m. local time and was lifted about 10 minutes later. Authorities said the situation was safe and told residents to return to their normal activities.

Officials said unusual sounds heard in Dubai and other parts of the UAE were caused by air defence operations during the response to the reported threat.

The Defence Ministry said it was fully prepared to deal with threats against the country’s security.

The incident was described as the first such reported incident since a May 4 strike on Fujairah port.

The UAE had also issued a missile warning in May. A separate alert in June was later found to have been caused by a technical problem with the country’s national early warning system.

Authorities have advised residents to get updates only from official sources and follow instructions from emergency services.

Iran denies launching missiles

Iran has rejected the UAE’s claim that it launched the missiles.

Baghaei said the accusation was unfounded and could damage efforts by countries in the region to rebuild trust.

He said such claims went against good-neighbourly relations and could make efforts to prevent further regional tensions more difficult.

The UAE and Iran have therefore given different accounts of the reported missile launches.

UAE-Iran trade ties suspended

The trade suspension comes after recent efforts by the UAE and Iran to improve their relations.

Trade between the two countries had resumed in some areas. Some Iranian flights had also returned to the UAE, while Dubai’s financial district had begun to see more bankers.

The UAE had also allowed about 20,000 Iranian residents who were outside the country to return.

Afra Al Hameli, director of the Strategic Communications Department at the UAE Foreign Ministry, confirmed the trade suspension early Wednesday.

She said all trade, commercial exchanges and financial transactions with Iran had been stopped until further notice.

Al Hameli also said the UAE remained committed to dialogue, cooperation and regional integration to support peace, stability and prosperity.

Strait of Hormuz remains a major issue

The waterway is an important route for global oil and gas shipments. Shipping through the strait has been disrupted since February.

Iran has said the waterway will not fully reopen until the United States meets its conditions, including lifting sanctions, unfreezing assets and ending military operations.

Iranian parliamentary speaker Mohammad Bagher Ghalibaf has also said the strait will remain closed until the United States fulfils its commitments.

U.S. President Donald Trump said on Tuesday that the Strait of Hormuz was “open and operating”. He also said there were no current talks with Iran and no plans to restart them.

However, ship traffic through the waterway remains very low. Several recent incidents have also affected commercial shipping.

An unidentified projectile struck a vessel leaving the strait off Oman on Tuesday. The vessel’s engine room was damaged and one person was killed.

Another cargo vessel was hit by several projectiles southeast of Yemen’s Mokha and was declared a “constructive total loss”.

The UAE has also accused Iran of attacking vessels operated by Abu Dhabi National Oil Company while they were travelling through the Strait of Hormuz. Iran has not claimed responsibility for those attacks.

Iran’s Revolutionary Guards have previously threatened action against vessels using the strait if they are linked to Tehran’s opponents or fail to follow Iranian instructions.

U.S.-Iran talks have stalled

The missile incident happened shortly after a 60-day period for U.S.-Iran peace talks ended on Monday without an agreement.

Trump said on Tuesday that the United States was not currently talking with Iran and had no plans to restart negotiations. He also ruled out extending the ceasefire agreement after it expired.

This has left the Strait of Hormuz as one of the main areas of disagreement between US and Iran.

Oman caught up in the dispute

Oman has been trying to help reach an agreement between Iran and the United States over shipping through the Strait of Hormuz.

Two regional officials said Trump threatened Oman over a possible agreement between Muscat and Tehran.

The proposed arrangement would involve joint Iranian-Omani management of the exit route from the strait. It would also include voluntary fees from vessels for security and environmental protection.

Trump has previously criticised Oman over its dealings with Iran. In May, he said Oman would have to follow the same approach as other countries or face U.S. military action.

Earlier this week, Trump also threatened to bomb Oman if it interfered with U.S. objectives in the Middle East, according to the supplied material.

Trump later posted a map showing the Strait of Hormuz as U.S. territory, which Iran criticised.

References: Indian Express, CNBC