The United Arab Emirates has suspended all trade and financial transactions with Iran, following reports of two ballistic missiles launched from Iran toward UAE territorial waters. The UAE stated that while both missiles fell into the water without causing damage or casualties, the incident marks an unwelcome return of conflict to the Gulf economy after more than three months.
Earlier this year, the UAE experienced weeks of Iranian drone and missile attacks, most of which were intercepted. These previous attacks heightened tensions and negatively impacted the country’s tourism and aviation sectors. The UAE justified its indefinite suspension of trade by citing regional escalations that undermine peace and security.
Iran’s Foreign Ministry spokesman, Esmail Baghaei, denied the claim that Tehran launched a missile at the UAE.
This incident occurs as discussions between the U.S. and Iran regarding a ceasefire or an agreement on the Strait of Hormuz have stalled. President Donald Trump confirmed on Tuesday that the U.S. is not currently engaged in talks with Iran and has no plans to resume them, a position Iran had previously stated. Trump also indicated he would not extend the 60-day ceasefire agreement, which expired Monday, as the deal effectively collapsed.
With talks at a standstill, both sides are considering their next steps in the ongoing conflict. A primary point of contention remains control of the Strait of Hormuz, a critical shipping waterway. While President Trump has repeatedly asserted that the strait is open and under U.S. control, observed ship traffic through the passage remains extremely low. An attack on a cargo vessel in the strait earlier this week resulted in one fatality.
Reports citing two Iranian regime insiders indicate that Iran has considered attacking U.S. military targets in Europe if the conflict escalates. Potential targets reportedly included U.S. assets in Bulgaria and Cyprus.
President Trump has also extended his verbal criticisms to long-standing U.S. allies. On Monday, he reportedly threatened Oman, stating he would bomb the Gulf nation if it interfered with U.S. objectives in the Middle East. Additionally, he instructed Defense Secretary Pete Hegseth to significantly reduce joint drills with South Korea, accusing Seoul of not assisting with the military operation in Iran and referencing his friendly relationship with North Korean leader Kim Jong Un.
