UAE cuts trade ties with Iran after two ballistic missiles target shipping

The United Arab Emirates (UAE) has suspended all trade, commercial exchanges and financial transactions with Iran, citing the latest escalation in the region and a missile incident involving shipping in the Gulf.

UAE Foreign Ministry communications director Afra Al Hameli announced the decision on Tuesday, saying the measures would remain in place until further notice.

"In light of regional escalations... all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice," Al Hameli said.

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UAE issues missile threat alert

The announcement came shortly after UAE residents received a brief phone alert warning of a "potential missile threat". The warning urged people to move to safety but was withdrawn soon afterwards.

"Due to the current situation, potential missile threats, immediately seek a safe place in the closest secure building," the interior ministry said in the alert.

It was the first such warning since a false alarm in June. Another alert was issued in July over an attack that did not enter UAE territory. The previous missile warning had come in early May.

UAE accuses Iran of targeting shipping

The UAE later said its air defences had detected two ballistic missiles launched from Iran towards the country. According to the UAE Foreign Ministry, one missile fell outside the country's territorial waters while the other landed within them.

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"Assessments carried out showed that the two ballistic missiles detected coming from Iran were targeting maritime navigation and fell into the sea."

Tehran rejected the allegation. Iranian Foreign Ministry spokesman Esmaeil Baqaei "categorically rejected the United Arab Emirates' claim that Iran had launched a missile toward that country", saying the claim could harm regional trust and security efforts.

Gulf tensions put UAE-Iran ties under strain

The latest development comes after repeated incidents involving tankers linked to state-owned oil company ADNOC in recent weeks.

When the Middle East war began on February 28, the UAE faced a major share of Iran's attacks, with nearly 3,000 missiles and drones directed at the country, according to the report.

A memorandum of understanding between the two sides came into effect in June but has since collapsed. The UAE had reported no attacks after the agreement, unlike several other Gulf states.

Meanwhile, Iran has warned that the Strait of Hormuz will remain closed until it reaches a peace agreement with the United States. The waterway is crucial for ships leaving UAE ports and other Gulf routes.