ByDANIELLE GREYMAN-KENNARD

JUNE 2, 2026 12:44

Updated: JUNE 2, 2026 17:25

Experts on the Middle East informed The Jerusalem Post on Monday that the Islamic Republic's assaults on the United Arab Emirates, an important trading ally for Tehran, signal strategic desperation.

The UAE Defense Ministry verified in late March that its air defenses intercepted 357 ballistic missiles, 15 cruise missiles, and 1,815 drones, with occasional strikes on the nation persisting even amid the current lull in most regional fighting.

Although the UAE absorbed the majority of assaults on Gulf states, likely due to its participation in the Abraham Accords, international relations specialist Dr. Arman Mahmoudian, a research associate at the University of South Florida's Center for Strategic and Diplomatic Studies, noted to the Post that the country remains a crucial financial center for Tehran.

In addition to its position as a significant trading partner, the UAE functions as one of Iran's main centers for avoiding sanctions, Mahmoudian stated. The US Treasury has over time sanctioned multiple UAE-based firms and banks for aiding Iranian oil and petrochemical shipments, supporting fund transfers to Iran, and assisting Tehran in dodging global restrictions.

The UAE has served as a key ally for Iran's economy, he emphasized, noting that the regime apparently determined its survival required harming financial ties.

The UAE shipped $5.78 billion worth of goods to Iran in 2023, while Iran sent $453 million in exchange, per the Observatory of Economic Complexity. Moreover, in the Persian year ending March 20, 2025, non-oil trade between the two nations hit a high of $29.1 billion, according to the financial publication Calcalist.

Tehran's Strikes on the UAE Weaken Its Own Economy

Dr. Kristian Alexander, a senior fellow and lead researcher at the Emirates-based Rabdan Security and Defense Institute and an adviser at Gulf States Analytics, reached similar conclusions to Mahmoudian, stating that Tehran chose coercive messaging ahead of economic self-protection.

Intense attacks on UAE infrastructure could damage one of Tehran's economic lifelines. Thus the strikes proved both coercive and damaging to itself, he observed.

Tehran's reasoning appeared rooted in the view that the UAE's status as a worldwide trading, aviation, port, energy, and investment center leaves it open to interference, with such interference meant to show that any conflict with Iran would threaten the economic framework across the Gulf, Alexander said.

Although Alexander recognized some planning by Tehran, he added that the regime probably misjudged the UAE, which under repeated attacks had little option but to view Iranian commercial networks as a security risk.

In March, officials chose to close an Iranian state-linked hospital in Dubai. A source informed the Financial Times that the move stemmed from worries the facility might be used to promote goals not benefiting the Iranian people and breaching UAE regulations. The outlet also noted that several Iranian state-connected schools were shut by UAE authorities. The Wall Street Journal reported that the UAE targeted Iran in March.

The UAE's recent steps depart from its usual approach to Tehran, Alexander observed, pointing out that the UAE has favored diplomatic and legal avenues when addressing disputes with Tehran. In the ongoing disagreement over Abu Musa and the Greater and Lesser Tunbs, islands held by Iran since 1971, Emirati authorities have consistently urged bilateral talks or referral to the International Court of Justice, he cited as an example.

The UAE has long kept economic interests apart from political differences. Abu Dhabi maintained ties with Tehran through sanctions pressures, tanker incidents, the Yemen conflict, and island disputes. Yet direct assaults on the UAE's economic infrastructure mix commerce with security concerns. Iranian-linked enterprises, financial routes, shipping links, and expatriate setups now face heightened examination, he detailed.

Mahmoudian suggested Tehran anticipated costs from striking neighbors, describing the worsening ties as unavoidable side effects, since it saw better odds of overcoming the United States via economic pressure than military action. He recalled that regional players responded similarly by closing Iranian exchange offices, limiting Iranian bank accounts, revoking visas, and at times expelling Iranian traders during Mahmoud Ahmadinejad's presidency, making such results foreseeable.

By targeting economic sites in the region, Iran aimed to heighten strain on energy markets and prices. Even when some targets lacked direct oil and gas ties, strikes on major energy producers, particularly in oil- and gas-rich areas like the Middle East and Persian Gulf, still exert pressure on global energy markets, Mahmoudian explained.

Moody's Analytics data, provided exclusively to CNBC, showed the conflict with Iran has already created substantial expenses for American consumers, with the typical US household incurring an extra $447 in fuel-related costs since fighting started in February. Airline ticket prices increased over 20 percent in April versus the prior year, according to federal government inflation figures.

Consumer Items, Factory Parts, Equipment, Electronics, Medicines

Without a quick end to the war, cash-strapped consumers will likely cut spending, endangering the already weak economy, Mark Zandi, Moody's chief economist, told CNBC.

While specialists foresee prolonged fighting hurting the US economy, Mahmoudian clarified that Tehran's economy would also suffer. If Iran and the United States restart the war, or if the present conflict lacks a resolution, chances for Iran to rebuild trade ties with the UAE will stay low, he forecasted.

Alexander emphasized that if Gulf nations impose tighter limits on Iranian-linked firms, shipping operators, financial middlemen, and re-export channels, the expense of bringing goods into Iran will climb sharply, further damaging an economy already hit by inflation.

Numerous consumer items, factory parts, equipment, electronics, medicines, and semi-finished goods arrive in Iran via Gulf trading centers, Alexander noted. Any break in these supply lines raises expenses for Iranian businesses and consumers.

Iran's declining economic situation already triggered widespread protests in January, which faced strong suppression by regime security forces. The war has since added further strain. The US closure of the Strait of Hormuz drove up inflation and interrupted trade, while the regime's three-month internet blackout cost many Iranians their incomes, worsening a serious living-cost crisis. Tehran's official statistics agency reported in April that yearly inflation reached 53.7 percent, with food inflation exceeding 115 percent compared to the same time last year.

Even with a formal accord between Tehran and Washington, Alexander predicted the harm would deter investment in the area. Viewed as unstable, the Gulf may find it hard to form international business links or draw foreign funds during Tehran's push for economic rebound. Iran's strikes on neighbors will likely appear as self-damage, highlighting its military reach yet harming its standing with investors.

Although the UAE and other Gulf countries would prove hard to substitute, other nations might try to fill the gap. Turkey, Pakistan, and Iraq will probably expand trade, though none matches the economic stability of the UAE.

Turkey could hold special interest in discreet dealings with Iran, Mahmoudian suggested, observing that a weakened regime might strengthen Turkish factions and intensify its own Kurdish concerns.

Turkey serves as a notable trade partner, yet it is less suited geographically for Gulf-oriented commerce and subject to its own political factors, Alexander said. He added that the UAE's function as a sanctions-adaptation platform would be tough to replace, requiring Iran years rather than months to rebuild the capabilities the Emirates now supply.