|Iran sanctions hit Dubai trade||
Pressure from the U.S. to sever Iranian trade ties has put Dubai’s links with Tehran under greater scrutiny. Now the emirate faces disagreement with Abu Dhabi over Iranian ties
The sanctions imposed by the U.S. and its allies on Iran are posing difficult questions for countries torn between political allegiance to the West and trade ties with Tehran.
The UAE has historically enjoyed strong trade relations with Iran, but faces mounting pressure to clamp down on business activities linked to Tehran. The country has long faced a split on how to deal with the Iran issue, with its two largest emirates sharing contrasting relationships with the Islamic republic.
Dubai has been the destination for several waves of migrants from Iran, which has cemented the emirate’s reputation as a stable regional commercial hub.
Dubai’s trade-focused economy is still benefiting from a more than $10bn re-export trade to Iran, while Abu Dhabi toes a Western line on diplomacy.
Abu Dhabi’s $10bn bailout of Dubai in late 2009 changed the dynamics of the relationship between the two emirates, reducing the latter’s economic and political clout significantly. Meanwhile, increasing pressure from the U.S. on its allies to cut Iranian trade ties has put Dubai’s relationship with Tehran under greater scrutiny.
The new Western sanctions are aimed at hurting the Iranian economy, but collateral damage is now being felt by businesses across the Persian Gulf.
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