The UAE imposed a trade and financial embargo on Iran on August 18, following a fresh military incident between the two countries. The decision came after the UAE authorities said two ballistic missiles launched from Iran had been detected heading towards maritime traffic in the Gulf, before both fell into the sea, though Tehran rejected the UAE's account of the incident. As a result, Abu Dhabi moved to suspend bilateral commercial activity and financial dealings with Iran until further notice, adding a new restriction to trade between the two countries at an already difficult time for regional business.
The timing of the measure is particularly significant for the steel market, as trade conditions across the Gulf have already been under pressure since the war started in late February. In the UAE, repeated disruptions around the Strait of Hormuz have created uncertainty over freight costs, vessel availability and delivery schedules, slowing purchasing activity and making fresh steel bookings increasingly difficult to conclude. Iranian suppliers have faced similar pressure from shipping disruptions, sanctions and limited payment options. The new UAE restrictions therefore come on top of problems that were already constraining steel flows in the region rather than creating a new difficulty in isolation.
This existing pressure is amplified by the scale of trade between the UAE and Iran. During the first ten months of the Iranian fiscal year starting in March 2025, Iran imported around $14.8 billion worth of goods from the UAE, accounting for 30.2 percent of its total imports, while its non-oil exports to the UAE reached approximately $6.5 billion. The UAE has also served as an important logistics, re-export and financial hub for Iranian companies. Consequently, a prolonged suspension of bilateral trade could further reduce the channels available for Iranian steel suppliers, while making payments and shipments more complicated at a time when regional steel trade is already struggling with weak activity and persistent logistical uncertainty.
