Iran’s economic ties with the Gulf states have come under renewed pressure following the regional escalation involving the US, Israel and Iran. The UAE, which accounts for more than 90% of Iran’s trade with the Gulf, announced in August that it was suspending commercial activity, trade and financial transactions with Iran until further notice.
The UAE has long been Iran’s main trading partner in the Gulf. Iranian Customs Administration data cited by Al-Khaleej Online put bilateral trade at $29.1 billion in 2025, or 23% of Iran’s total external trade. Iran exported about $7.2 billion worth of goods to the UAE and imported more than $21.9 billion.
Other data show lower figures. UAE statistics put bilateral non-oil trade at $5.73 billion in 2025, including $4.81 billion in re-exports. The difference appears to be linked partly to how goods moving through the UAE’s re-export and free-zone system are recorded, as well as differences in reporting periods and valuation methods.
Among the other GCC states, Oman has the largest commercial relationship with Iran. Oman-Iran trade reached $1.33 billion in 2024, up 52% from the previous year. The two countries also signed agreements in 2025 aimed at expanding trade and investment cooperation.
Trade with Qatar, Saudi Arabia, Kuwait and Bahrain remains considerably smaller. Qatar’s trade with Iran reached $179.2 million in 2025, while Saudi-Iran trade was reported at $23 million during the nine months to December 21, 2024. Kuwait’s bilateral trade reached $26.83 million in the first eight months of 2025, while WTO data put Bahrain’s imports from Iran at $15.03 million in 2024.
The Gulf’s importance to Iran also extends beyond direct trade. The region has long served as a hub for Iranian companies and financial networks seeking to navigate Western sanctions. Gulf ports, particularly those in the UAE, have been used to supply Iran with goods and facilitate re-export activity.
Regional financial authorities have also increased scrutiny of channels that could be used to bypass sanctions. In August, the UAE launched an investigation into cryptocurrency exchange Binance following allegations that it had been used to transfer funds to Iranian entities under US sanctions. A May report by Al-Araby al-Jadeed said Gulf central banks were taking additional measures against digital platforms allegedly used to circumvent sanctions.
The suspension of economic ties with the UAE therefore puts pressure on Iran’s most significant commercial relationship in the Gulf. The extent of the impact will depend on how long the restrictions remain in place and whether other Gulf states maintain their existing economic channels with Tehran.
