The United Arab Emirates (UAE) serves as a crucial economic and financial hub in the Persian Gulf, playing a significant role in the political and economic landscape of the Middle East. With its strong financial infrastructure and strategic location, the UAE functions not only as a trading partner for Iran but also wields substantial influence over regional financial flows.
The relationship between Iran and the UAE transcends mere economic collaboration; it encompasses complex security and geopolitical issues that could affect Iran’s national interests and stability.
Analyzing the UAE’s Balance of Payments
The UAE has accumulated over $800 billion in current account surpluses from 2003 to 2024, reinforcing its reserves and capital funds while maintaining a minimal dependence on oil revenues. The UAE’s economy is characterized by substantial contributions from re-exports and financial services, contrasting with Iran’s reliance on the UAE for essential imports due to international sanctions.
Strategies to Counter Strategic Threats from the UAE and Reform Iran’s Economic Policies in the Persian Gulf
The UAE poses a strategic threat to Iran’s interests in the Persian Gulf, with its political and security roles extending beyond national defense. While Abu Dhabi views Iran as a primary threat, Dubai’s economic engagement complicates this relationship. The UAE’s alignment with Saudi Arabia and its involvement in regional conflicts further exacerbate tensions.
Iran must recognize the UAE as a multifaceted threat encompassing security, economic, and intelligence dimensions. Additionally, Iran’s dependency on the UAE for essential imports has created vulnerabilities. To safeguard its economic security, Iran should focus on reducing reliance on UAE companies for imports and developing formal payment systems with allied countries, addressing the resistance from influential stakeholders.
This study is conducted at Moqavemati Economy Think Tank in collaboration with Hossein Mehditabar, Mohammad Zholazadeh and Ali Najafi in 2026.
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