Damac Heights real estate development (right) at Dubai Marina in Dubai, United Arab Emirates, on Friday, February 20, 2026.
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The United Arab Emirates is considering cutting off Iran’s access to billions of dollars held in the Gulf state, The Wall Street Journal reported Thursday.
The move could cripple Tehran’s access to foreign currency and global trade networks at a time when the country’s economy is deteriorating and the military conflict with the United States and Israel has put it under further pressure.
Citing people familiar with the talks, the newspaper reported that Emirati authorities have warned Iranian authorities that such measures are under consideration, but no decision has been reached on whether or when to act.
The UAE has long sought to balance its strategic alliances with the United States and neighboring Iran, but Tehran’s attacks on Gulf states appear to be prompting a rethink of policy.
According to the Atlantic Council, a US-based think tank, Dubai has become a key financial corridor for Iranian companies and individuals seeking to circumvent Western sanctions, sell oil abroad and channel the proceeds to military programs and regional proxies.
Shell companies registered throughout Dubai’s vast free zone have hidden the origin of Iranian oil and goods for years. Informal exchange companies also move funds across borders beyond the oversight of traditional banks.
The United States is pressuring Gulf states to dismantle these networks. The U.S. Treasury Department has sanctioned companies based in the UAE in recent years, and officials have repeatedly said enforcement within the UAE has fallen short of the country’s commitments.
In retaliation for the joint US-Israeli attack, Iran attacked targets in the UAE with more than 1,000 drones and missiles, damaging infrastructure such as Dubai International Airport and the popular Fairmont Hotel, as well as residential and tourist areas.
Earlier this week, UAE officials confirmed that their country would not take part in military action against Iran and would maintain a defensive posture. The foreign ministry said in a statement that the decision was in line with its “long-standing policy of good-neighborly relations, de-escalation of tensions and a firm commitment to the United Nations Charter.”
The Iranian strikes have rattled the expatriate business community and international investors that Dubai has spent decades cultivating to bring stability to the volatile region.
According to the newspaper, Emirati authorities are currently considering a range of possible countermeasures, including freezing the assets of shell companies based in the UAE and cracking down on local currency exchanges, which are at the heart of Iran’s finances.
Correction: This article has been updated to remove reference to Dubai being the capital of the UAE.
