UAE-Iran trade totaled $28 billion in 2024, WTO data show
Treasury Secretary Scott Bessent announced “Economic D-Day” and made it clear that the U.S. would no longer turn a blind eye to countries supporting Iranian economic activity, but a walk around Dubai shows Iranian commerce proceeding in plain sight. Iranian banks remained open in the city this week, including a multistory branch of Bank Melli Iran along the creek in Dubai’s old town, where a dozen tellers continued serving Farsi-speaking customers in a bright space decorated with Persian-themed mural work and tiling.
Bessent specifically called for all branches of Bank Melli to be closed. Yet after his announcement, the Dubai location stayed open. Bank Melli began operating in the UAE in 1969, before statehood, and has two branches in Dubai whose ruler inaugurated the first branch. Iranian bank employees at the old-town location said they had not received a notice to close and that barring one, they would continue to operate. “We put our trust in God on what happens next,” an Iranian bank employee said.
Dubai-based Iranians said they are already planning alternatives for moving money to and from Iran if the banks get shut down. One is the centuries-old hawala system, which allows users to transfer funds between dealers in different countries entirely on trust — money is deposited with a dealer in one location and paid out by a dealer in Iran, with the two dealers settling accounts later. So far that step has not been necessary. In fact, Iranians around the city said conditions have improved since the early spring, when the UAE closed a hospital and social club, temporarily banned Iranian passport holders from entering or transiting, and revoked some Iranians’ visas, including for some long-term residents who were traveling abroad at the time.
The widespread visa cancellations, which were never formally announced, do not appear to be continuing and some visas have been restored. The Iranian Hospital and the Iranian Club remain closed, but the shutdowns have not spread. Iranian airlines are running regular direct flights shuttling passengers between Iran and the UAE. The latter’s major carriers — Emirates, Etihad, and FlyDubai — are not offering direct flights to Iran, though some flights do use Iranian airspace. In Iranian diners and cafes in Dubai’s old city, Iranians chatted with Emirati customers in Arabic. One restaurant’s facade was covered in 7-foot portraits of the UAE’s rulers and dozens of Emirati flags.
The continuing Iranian business activity is at odds with the public positions of the UAE and the U.S. The Emirates’ Foreign Ministry said last week it was halting trade, commercial exchanges, and financial transactions with Iran. The move came after weeks of U.S. pressure and preceded Bessent’s campaign, in which he specifically criticized countries that welcome Iranian flights. “It is no longer acceptable to operate in the gray spaces of this conflict,” Bessent said. “These measures broaden secondary sanctions risk for anyone foolish enough to continue conducting business with this regime.”
The Treasury and the UAE Foreign Ministry did not respond to requests for comment about the Iranian business activity. A White House official said the Trump administration continues to work with partners in the region to squeeze Iran’s economy.
The scale of the Iran-UAE economic relationship helps explain why decoupling is difficult. About $28 billion in trade flowed between the UAE and Iran in 2024, according to the most recent WTO data. An October study by Treasury’s Financial Crimes Enforcement Network tracked Dubai-based companies moving $6.4 billion in potential Iranian shadow banking funds in 2024, or 71% of the global total. The UAE is home to the second-largest number of companies and people sanctioned by the U.S. Treasury over ties to Iran, behind China, according to Matthew Levitt, who in the 2000s served as deputy assistant secretary for intelligence and analysis at the Treasury. Former U.S. enforcement officials said Dubai’s take is likely much higher and that the U.S. should be forcing the UAE to crack down on illicit Iranian business activity.
The two cultures separated by the narrow Persian Gulf have ties dating back centuries. Many Emiratis have Persian roots. Hundreds of thousands of Iranians across social classes have made the UAE home, accessing global capital and freedoms banned by the Islamic Republic while bringing in billions of dollars in Iranian cash.
“The Gulf Arab state economies are so closely integrated and intertwined with the Iranian economy, you can’t just simply sever economic trade and activity overnight,” said Neil Quilliam, an associate fellow at international-affairs think tank Chatham House in London. “The U.A.E., and Dubai in particular, have always managed to continue to do trade, even when the maximum pressure is on. Cutting off that trade will be cutting off their nose, basically.”
Iranians in Dubai are reported to be concerned about the deteriorating economic picture in Gulf countries as the war drags on. Some said they fear losing their jobs and being forced to return to Iran; others have left preemptively for third countries.
Those ties have persisted even though Iran launched more than 2,800 drones and missiles at the UAE during the war, far more than it aimed at any other country, including Israel, as it tried to raise the global economic cost of the war to blunt the attack.
The enforcement challenge also runs up against U.S. interests. The UAE is the main signatory of the Abraham Accords, the pact shepherded by President Trump establishing diplomatic ties with Israel, which the Emirates counts as a key security partner. The country is also a source of funds for investment in sectors including artificial intelligence and grants the U.S. military important basing rights.
“There will be some in the U.A.E. who say, ‘Whatever the price of calm, that is what we need to do,’” said Levitt, now a senior fellow at the Washington Institute think tank. “Better to do that by allowing them to access banking and supply chains through our country than not,” he said of the Emirates’ internal calculation on Iran.
Dubai, which lacks the oil wealth of the country’s leaders in Abu Dhabi, depends on financial inflows that include the billions in Iranian shadow dollars. “Dubai in particular is a hub for a lot of the sanctions evasion,” Levitt said. “It is a huge part of their economy, to be sure. But there is a difference between relying on it and just making a lot of money on it.”