Iran warns Gulf states against aiding US as UAE halts trade ties
Iran's armed forces chief of staff, Ali Abdollahi, warned Gulf countries on Wednesday against providing any assistance to the U.S. military, according to the Mehr news agency. The warning came hours after the United Arab Emirates announced it was severing economic ties with Tehran following an alleged missile attack on its territory.
"Any assistance or facilitation provided to the aggressor U.S. military amounts to participation in the U.S. military operation," Abdollahi said, as reported by Mehr. He also cast doubt on assurances from Gulf states that they would not allow the U.S. to use their territory as a launchpad for attacks, noting that "it seems unlikely that such a large number of military aircraft, particularly refuelling aircraft, could be present at regional bases without knowledge of host countries."
The Gulf region hosts numerous U.S. military installations, including in the UAE, which said on Tuesday that Iran had fired two ballistic missiles at vessels off its coast. The UAE Defense Ministry reported that two missiles were detected originating from Iran, both falling into the sea—one outside the country's territorial waters and one within them. The ministry said the missiles were targeting maritime navigation.
Iran denied the accusation. Foreign Ministry spokesperson Esmail Baghaei "categorically rejected" the claim, stating that such behavior is "contrary to the principle of good neighbourliness" and disrupts trust-building efforts.
UAE halts trade and financial dealings
The UAE announced on Tuesday that it was halting all trade, commercial exchanges, and financial transactions with Iran until further notice. Afra Al Hameli, Director of the Strategic Communications Department at the Ministry of Foreign Affairs, said the decision was made "in light of regional escalations that undermine regional and international peace and security." She added that the UAE remains committed to safeguarding the integrity of the international financial system.
The suspension covers direct dealings, though it is unclear whether it extends to money routed through third countries. The move follows earlier measures, including the recall of the UAE ambassador and the closure of Iran-linked schools and a hospital.
The UAE and Iran share deep cultural and historical ties, and the UAE is home to a sizable Iranian community. It had been a major trading partner for sanctions-hit Iran before the war.
Broader conflict and Strait of Hormuz
The war between the U.S. and Iran began on February 28 with U.S.-Israeli attacks on Iran, which retaliated with missile and drone strikes across the region. The Strait of Hormuz—a vital chokepoint through which vessels departing most UAE ports must pass—has been blockaded by Iran and remains a flashpoint. Attacks on commercial ships have continued despite a recent lull in hostilities between Washington and Tehran.
A framework U.S.-Iran deal aimed at reopening the strait collapsed. Although both sides recently said messages were being exchanged, U.S. President Donald Trump on Tuesday insisted that talks were off, taunting Iran with a social media post depicting the strait as "NEW U.S. Territory."
This follows a statement by Jared Kushner on Monday that the U.S. and Iran had "very positive and active conversations," which Trump denied the next day. Trump asserted, "There are no talks or conversations going on, or scheduled... Naval Blockade remains in full force and effect."
Diplomatic reactions
U.S. Secretary of State Marco Rubio spoke by phone on Tuesday with UAE national security adviser Sheikh Tahnoon bin Zayed Al Nahyan. According to State Department Principal Deputy Spokesperson Tommy Pigott, they discussed regional security issues, including Lebanon, as well as "continued U.S.-UAE coordination to hold Iran and its terrorist proxies accountable for ongoing attacks." Rubio also underscored the importance of freedom of navigation through the Strait of Hormuz.
Iranian officials have struck a defiant tone. Parliament Speaker and chief negotiator Mohammad Bagher Ghalibaf visited Iraq, saying the trip aimed at "strengthening the new order in the region" and was conducted "without foreign interference," as quoted in reports.
Oil market impact
The escalation has pushed oil prices higher. Brent crude topped $91 per barrel, and WTI moved above $85 per barrel. The U.S. Energy Information Administration expects oil flows through the Strait of Hormuz to remain severely constrained through August, with production shut-ins averaging 5.5 million barrels per day in July. The agency forecast Brent at $85 per barrel for the third quarter of 2026, an $11 increase from its previous estimate.
Broader regional tensions
Media reports have indicated that Saudi Arabia, the UAE, Kuwait, and Bahrain have all struck targets inside Iran in retaliation for Tehran's attacks on the Gulf, though those countries have mostly denied the reports. In a separate development, Yemen's Houthis—an Iran-aligned group—claimed drone attacks on Saudi Arabia targeting Najran airport and an Aramco facility, according to the group's military spokesperson Yahya Saree. Saudi Arabia is part of the Mecca Joint Defence Agreement, a tripartite pact with Turkey and Pakistan signed on August 7, 2026, under which an armed attack against one is regarded as an attack against all.
The UAE previously accused Tehran of repeatedly targeting its tankers at sea in recent weeks, and it called such attacks a "flagrant violation" of UN Security Council resolutions and "acts of piracy by Iran's Revolutionary Guard Corps." The UAE demanded that Tehran stop attacks and reopen the strait.
As the conflict nears its sixth month, Trump has threatened "tremendous" economic punishment on any country helping Iran, launching a new campaign. The U.S. has largely paused military operations, with reports of strain on munitions stockpiles, though Trump and the Pentagon have denied those reports.