UAE Increases Trade with Iran After Eased Restrictions on Business Activity


Trade between Iran and the United Arab Emirates has increased as the Gulf's commercial capital relaxed limitations on business activities between the two neighbors. According to executives, the UAE has recently relaxed restrictions on company registrations and the issue of visas to enterprises from Iran, which is still subject to strict US sanctions. Iranian financiers are also looking for ways to boost bilateral trade by developing financial channels to fund genuine transactions, according to them.

Developing trade connections between Iran and the UAE, the traditional hub for re-exports into the Islamic Republic is part of the Gulf state's shift toward regional de-escalation and a focus on commerce. This follows a decade of ferocious interventionism in the aftermath of the 2011 Arab Spring protests.

“UAE foreign policy seems to have shifted toward one that is primarily driven by economic statecraft,” said Afshin Molavi, senior fellow at Johns Hopkins University School of Advanced International Studies in the US, while adding that current and future sanctions on Iran would temper this growth.

The UAE's diplomatic approach to Iran since 2019, in response to attacks on international commerce in the Gulf, has been bolstered by a breakthrough this year negotiated by China that reestablished relations between the Islamic Republic and its old rival Saudi Arabia. This has contributed to the easing of a decade of Cold War-style tensions between the opposing Gulf states.

The Saudi-Iranian reconciliation has fuelled optimism that current talks would result in a long-term political compromise. The release of US detainees in Iran could potentially signal the start of new – possibly unofficial – discussions with Iran to trade sanctions relief for curbs on its nuclear activities.

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