Trade suspended with Iran

DUBAI (AP):

The United Arab Emirates (UAE) suspended all trade with Iran yesterday after the UAE said it had come under renewed fire from the country — a move that will further isolate the Islamic Republic, which is suffering under US sanctions and a blockade.

Incoming ballistic missile fire triggered nationwide warnings Tuesday night for UAE residents to seek shelter, the first time in weeks such an alarm had sounded.

Early in the conflict, the UAE regularly came under intense fire from Iran, and most trade between the countries, which had once been important trading partners, ground to a halt. In late June, as hostilities eased, some maritime trade resumed, Iran’s state-run IRNA news agency reported.

Beyond the trade in domestically produced goods, “the UAE has been very important for Iran as a re-export hub and has helped the country absorb some of the shocks caused by sanctions”, Mohammad Farzanegan, a professor of Middle Eastern economics at Germany’s University of Marburg, said.

“Iran, therefore, depends heavily on the UAE, not because the UAE itself produces one-third of Iran’s imports but because it serves as a major gateway for Iran to access third-country goods and commercial infrastructure.”

Following the announcement that two ballistic missiles had been fired towards the UAE, both of which splashed down in the Persian Gulf late Tuesday, the Emirati Foreign Ministry said it decided to impose the punitive measures, while also saying that it remained committed to “dialogue, cooperation and regional integration”.

The step halted all trade and financial transactions “until further notice”, the ministry said in a statement.

The UAE Defence Ministry said assessments showed that the missiles targeted maritime traffic. It was not clear whether they targeted Emirati ships or the country’s territorial waters.

Iranian Foreign Ministry spokesperson Esmail Baghaei denied that Iran had launched any missiles towards the UAE.

As part of Iran’s efforts to maintain a stranglehold over the Strait of Hormuz, it has regularly attacked ships attempting to use the waterway, including four tankers owned by Abu Dhabi’s state-owned ADNOC oil and gas company over the past two weeks. None of the attacks caused injuries, but they brought harsh condemnation from the UAE and others in the region, including Kuwait and Bahrain.

Since the beginning of the conflict, nearly 20 ADNOC vessels have been attacked by missiles and drones in the Strait of Hormuz, killing one person and wounding another 20.

Iran’s ability to control traffic through the strait, through which a fifth of traded oil and natural gas passed during peacetime, has proved its biggest strategic advantage in the war. While the US and Israel — which launched the war on February 28 — have given various aims, including toppling Tehran’s government and ending its nuclear programme, the conflict has devolved into a fight over the strait.

US President Donald Trump insisted Tuesday that the strait was “open and operating” and posted a map depicting it as a US territory. Iranian Deputy Foreign Minister Kazem Gharibabadi called him a “deluded man”.

Ten vessels transited the strait Tuesday, according to the MarineTraffic website, fewer than a tenth the number that typically sailed through before the war began, when there were no restrictions.

During the war, Iran has launched hundreds of ballistic missiles and thousands of drones in strikes that Tehran said were targeting US assets but hit buildings in Dubai and Abu Dhabi, Dubai’s commercial airport, ports, and energy infrastructure.

Iran has accused the UAE and other US allies in the Gulf of facilitating American military attacks on Iran, and Iran’s chief of staff, Ali Abdollahi, issued a new warning Wednesday to “countries on the southern shores of the Persian Gulf”.

“Any assistance or facilitation provided to the aggressor US military amounts to participation alongside US military forces,” he said in a statement distributed by Iran’s semi-official Fars news agency.