Dubai’s Iran trade faces new threat as US economic pressure intensifies

Dubai’s historic trade links with Iran are coming under severe pressure as the six-month Middle East conflict, the closure of the Strait of Hormuz and a new US campaign of economic pressure disrupt commerce in the emirate.

Along Dubai Creek, once a major hub for wooden dhows carrying goods between Dubai and Iranian ports, long stretches of quay are largely deserted. At a dhow terminal near the creek’s mouth, forklifts and cranes were loading vessels at sunset, but a security guard said they were bound for Oman and India. “No more Iran since last week,” he said, according to Bloomberg.

“Before the war, many Iranian cargo ships came here,” said Amal, a fisherman. “Now it’s finished.”

For decades, Dubai has functioned as an offshore commercial hub for Iran, providing access to financial services, global markets and imports. Trade between the UAE and Iran was worth nearly $30 billion a year before the war, while Dubai is home to hundreds of thousands of Iranian residents and merchants.

That relationship has been shaken after the UAE suspended trade, commercial exchanges and financial transactions with Iran last week, following accusations that Tehran had targeted maritime traffic in Emirati waters. A day later, President Donald Trump announced a campaign of “economic warfare” and Washington launched “Operation Economic Outcast”, expanding secondary sanctions on businesses trading with Iran.

The disruption is already visible in Dubai’s Iranian commercial community. Danial, an Iranian shopkeeper, said saffron supplies had slowed, forcing traders to bring smaller quantities in luggage and pushing prices up by more than 20%. At least six shops nearby have closed.

“We have no income, yet we still have to pay rent,” he said, adding that inspectors had recently fined numerous businesses for what he described as minor bureaucratic violations. “They’ve become stricter, 90 per cent of all of us got a fine,” he said.

Still, analysts say Dubai’s decades-old commercial ties with Iran will be difficult to dismantle entirely. “Iranian traders have been a foundational component of Dubai’s economy since long before the oil era,” said Justin Alexander of Khalij Economics.

Iranian businesses are also seeking alternatives. A Tehran-based businessman said some goods had been stored in Turkey and shipments rerouted through Oman. He said cargo could still be loaded in Dubai for Bandar Abbas using false destinations on documents.

“We are bypassing the blockade in the same way we have been bypassing sanctions,” he said. “Not much has changed.”

Some Iranian trade continues. Iranian produce remains available in Dubai, Iranian airlines are still flying to the emirate, and Bank Melli and Bank Saderat continue serving customers despite US sanctions.

A Bank Melli employee said there had been no noticeable impact on routine transactions.

“Business is down, but the whole world is affected,” she said. “We’re used to this.”

By Tamilla Hasanova