UAE expected to play key role in tightening U.S. sanctions on Iran
U.S. officials say Dubai is a major conduit for Iran's foreign-currency earnings, and the United Arab Emirates has announced a halt to trade and financial transactions with Tehran as Washington steps up economic pressure.
President Trump has warned of an expanded economic campaign against Iran, and Treasury Secretary Scott Bessent said the United States will impose the "toughest sanctions in history" to undermine the regime. Analysts note that the effectiveness of such measures may depend on cooperation from the United Arab Emirates, whose financial hub Dubai handles a large share of Iran's foreign-currency transactions.
Former Treasury official Miad Maleki told CBS News that roughly 80% of Iran's foreign-currency exchange occurs in Dubai, where oil revenues are converted into funds that finance imports and are moved through exchange houses to other jurisdictions. He said the UAE could be instrumental in cutting off these channels and accessing reserves generated from oil sales to China.
In recent weeks the U.S. Treasury has designated several Dubai-based entities as shell companies that facilitate Iran's shadow banking system. Among them is HMS Trading FZE, described by the Treasury as helping the Iranian regime retrieve revenue from overseas oil sales, and two currency-exchange firms that allegedly assisted Iran's Shahr Bank, which is linked to the Islamic Revolutionary Guard Corps. The Treasury barred U.S. persons from dealing with the listed companies and warned foreign banks against secondary sanctions for knowingly transacting with them.
A senior Trump administration official told CBS News that the combined effect of sanctions and a naval blockade has severely weakened Iran's economy. The official added that the president has additional levers to apply in the coming weeks.
The UAE responded by announcing, via a statement from Ministry of Foreign Affairs spokesperson Afra Al Hameli, that all trade, commercial exchanges, and financial transactions with Iran are suspended until further notice. Al Hameli said the move reflects the Emirates' commitment to protecting the integrity of the international financial system. The announcement followed recent Iranian missile launches that triggered UAE air defenses and an attack on an Abu Dhabi National Oil Company vessel in the Strait of Hormuz.