The United Arab Emirates is reportedly considering freezing billions of dollars in Iranian assets held within the country, the Wall Street Journal reported.
If implemented, the move that could sharply restrict Tehran’s access to international financial systems and foreign currency, according to people familiar with the discussions.
According to WSJ, UAE officials are examining several measures aimed at dismantling Iranian financial operations that have long operated through Emirati banks, companies and shipping networks.
According to individuals familiar with the talks, Emirati officials have privately warned Iran about the potential move after Tehran launched more than 1,000 drones and missiles at targets in the UAE during the current regional conflict.
The UAE Foreign Ministry did not respond to WSJ's requests for comment on the reports.
For years, Iran has relied on a network of companies and financial channels based in the UAE to facilitate global trade and bypass sanctions. These networks have enabled Tehran to continue exporting oil and moving revenue through international markets, funds that analysts say have been used to support weapons development and regional proxy groups.
Esfandyar Batmanghelidj, chief executive of the Iran-focused think tank Bourse & Bazaar, told WSJ that limiting Iranian financial activity in the Emirates would have a major impact.
“Any move by the UAE to limit Iranian financial activities there would be very significant, because the UAE is the most important conduit for Iran’s engagement with the global economy," he said.
Beyond financial restrictions, policymakers in the UAE are also considering possible maritime enforcement steps. Officials familiar with the discussions said these could include the seizure of Iranian-linked vessels involved in transporting sanctioned oil through regional shipping routes.
Officials involved in the deliberations say Emirati leaders are weighing the risks of retaliatory Iranian attacks on infrastructure and energy facilities if financial sanctions are implemented.
Andreas Krieg, a senior lecturer at King’s College London’s School of Security Studies, said the UAE is unlikely to freeze all Iranian accounts due to the scale of Iranian business activity in the country, telling WSJ: "This is the most important nonmilitary lever the UAE have to play against the Iranians."
Data from the US Treasury indicates that in 2024 alone, roughly $9 billion moving through correspondent accounts tied to US banks appeared connected to clandestine Iranian financial networks. Treasury officials said firms based in the UAE received about 62 percent of those funds, much of it linked to Iranian oil sales handled through companies operating in Dubai.
Analysts say Iran has created extensive front companies in the Emirates to process payments, facilitate trade and conceal the origin of funds tied to sanctioned exports.