While the United States often accuses China of undermining its sanctions and easing pressure on Iran’s nuclear and military programs, the United Arab Emirates—the top exporter to Iran after China—has played a role no less significant in reviving Iran’s foreign trade.
Since the start of President Donald Trump’s new administration and the reinstatement of the “maximum pressure” policy, the U.S. Department of the Treasury’s website has published numerous sanctions packages, many of which target companies and individuals based in the United Arab Emirates.
For example, on June 6, 2025, Treasury imposed sanctions on an oil money-laundering network run by Iranian brothers Mansour and Fazlolah Zarringhalam, which included five companies based in the United Arab Emirates.
Emirati exports to Iran have surged from under $6 billion to $22 billion in the seven years since the U.S. withdrew from the Joint Comprehensive Plan of Action and reimposed sanctions on Iran.
According to customs data, Emirati exports to Iran have surged from under $6 billion to $22 billion in the seven years since the U.S. withdrew from the Joint Comprehensive Plan of Action and reimposed sanctions on Iran. While the United Arab Emirates’ non-oil imports from Iran have grown by only 20 percent—still over $7 billion—the United Arab Emirates is Iran’s largest buyer of fuel oil and one of its main liquefied petroleum gas customers. Data from commodity intelligence firm Kpler indicate the United Arab Emirates imported 44 million barrels of fuel oil and 350,000 tons of liquefied petroleum gas from Iran last year alone.
Excluding crude oil, Iran’s bilateral trade with the United Arab Emirates is nearly on par with that of China. According to customs data, Iran recorded $130 billion in foreign trade last year excluding crude and fuel oil, half of which was with China and the Emirates. These two countries are essentially the sole customers for Iran’s crude oil and fuel oil exports.
One striking issue is that Iran has a trade surplus with China—totaling around $60 billion in exports of oil, fuel oil, and non-oil goods last year—while its imports from China were under $20 billion. However, in the case of the United Arab Emirates, the trade imbalance skews against Iran. It remains unclear how Tehran finances its imports from the United Arab Emirates and transfers to it the necessary foreign currency. For instance, last year Iran exported approximately $3 billion in fuel oil and $7 billion in non-oil goods to the United Arab Emirates, yet its imports from the United Arab Emirates reached $22 billion.
It appears that the United Arab Emirates funnels a portion of Iran’s export revenues from other countries through its coffers. However, given Iran’s exclusion from the global banking system due to its listing on the Financial Action Task Force blacklist and its U.S. sanctions designation, it remains unclear how it transferred such large sums. Other customs data, however, provide some clue. In 2024, Iran imported over 100 tons of gold last year worth $8 billion—10 percent of which came from the United Arab Emirates.
The United Arab Emirates is one of Washington’s closest allies in the Middle East, hosting three U.S. military and logistical bases and more than 3,500 American troops.
The United Arab Emirates is one of Washington’s closest allies in the Middle East, hosting three U.S. military and logistical bases and more than 3,500 American troops. Although bilateral trade between the United States and United Arab Emirates amounted to less than $35 billion last year—comparable to Iran-United Arab Emirates trade—the United States remains the United Arab Emirates’ largest arms supplier. It is unclear how Emirati officials justify their $30 billion trade relationship with Iran, especially without utilizing the international banking system.
In May 2025, Trump visited Abu Dhabi and signed contracts and memorandums of understanding worth $200 billion. A significant portion of these deals involves plans to construct the world’s largest artificial intelligence campus outside the United States. Other agreements concern aerospace, energy, and industrial sectors.
It is not yet clear whether these agreements will prompt Abu Dhabi to adopt a tougher stance on trade with Iran. Neither the Emirati government nor the United States should dismiss such rhetoric as bluster. Iran has previously targeted several oil tankers in Emirati waters, for example, and Abu Dhabi had severed ties with Tehran for six years following an Iranian mob’s attack on the Saudi Arabian embassy in Tehran. Iran’s June 23, 2025, attack on Qatar’s Al-Udeid Air Base suggests an erasure of traditional red lines.
Perhaps the United Arab Emirates is trying to have it both ways by working with the United States and Iran, or perhaps it wants to immunize itself from the possibility of becoming collateral damage in the ongoing conflict between Iran on one hand and the United States and Israel on the other. Walking such a tightrope, however, can be extraordinarily difficult; any misstep and the fall can be devastating.
