US campaign to isolate Iran closes in on Dubai

{"text":[[{"start":9.96,"text":"Along the main waterway in Dubai’s old commercial heart, the long stretches of quay, home to its historic maritime trade with Iran, are now largely abandoned."}],[{"start":19.52,"text":"Shipping activity involving dhows, the wooden vessels that for decades ferried goods from Dubai Creek to Iranian ports, has visibly faded. Further downstream, fishing boats are tied to the quays, but one of a handful of crewmen still present said they’re not allowed into the Gulf any more."}],[{"start":35.92,"text":"A dedicated terminal for dhow traffic at the mouth of the creek was showing more signs of activity, with forklifts and cranes loading pallets and small containers on to a dozen or so ships at sunset. But a security guard said the vessels were heading to Oman and India. “No more Iran since last week,” he said."}],[{"start":54.16,"text":"“Before the war, many Iranian cargo ships came here,” said Amal, the fisherman. “Now it’s finished.”"}],[{"start":60.56,"text":"For decades, Dubai has served as Iran’s offshore commercial hub, providing the financial services, trade and access to global markets that Tehran’s sanctions-hit economy badly needed."}],[{"start":71.48,"text":"Sharing commercial and historical ties that preceded the founding of the United Arab Emirates in 1971, Dubai is home to several hundred thousand Iranian residents and merchants, as well as banks, trading houses and the dhow trade."}],[{"start":null,"text":"

"}],[{"start":85.42,"text":"That is now under threat, after the UAE and US announced plans to target Iranian trade and bring about what Washington has described as an “economic D-Day” to force the regime in Tehran to its knees."}],[{"start":97,"text":"The UAE, which bore the brunt of Iranian retaliatory attacks after the US-Israeli war started in February, last week said it was suspending all trade, commercial exchanges and financial transactions, hours after accusing Tehran of targeting maritime traffic in its waters."}],[{"start":112.24,"text":"A day later, US President Donald Trump declared a new campaign of “economic warfare” against Iran and Washington launched “Operation Economic Outcast”, saying it would expand secondary sanctions against those trading with the republic."}],[{"start":125.36,"text":"This has left Dubai’s Iranian business community once again worried about their future. While China is Iran’s largest trading partner, “the type of trade that comes through the UAE really matters”, said Esfandyar Batmanghelidj, chief executive of the UK-based Bourse & Bazaar Foundation think-tank."}],[{"start":143.64,"text":"“The UAE is the only avenue for Iranian imports, as Iran has access to no other major container port other than Jebel Ali in Dubai. If you are trying to keep an economy of 90mn growing, you really need that infrastructure.”"}],[{"start":157.64,"text":"Trade between the UAE — one of the US’s closest regional allies — and Iran amounted to nearly $30bn annually before the war, much of it enabled by the wooden dhows that shaped Dubai’s old city, where its spice and gold markets are also situated."}],[{"start":173.18,"text":"Analysts are sceptical whether the economic pressure campaign can succeed. But the six-month conflict, which has devastated Iran’s economy, and the shuttering of the Strait of Hormuz have taken a toll on traders in the old city."}],[{"start":185.54,"text":"Danial, an Iranian shopkeeper who declined to give his full name, still sold saffron from Iran out of stocks that were purchased before the war began. But as shipping traffic from Iran had slowed, Iranian businessmen now brought smaller boxes of saffron in their luggage, he said, raising the luxury spice’s price by more than one-fifth."}],[{"start":205.44,"text":"The impact of the war on business was evident in the souk near Danial’s shop. At least half a dozen outlets, some owned by Iranians but also Afghans, had been shut, with windows carrying signs announcing they were “closed for maintenance” — echoing the luxury hotels that closed their doors for long-term renovations earlier in the conflict."}],[{"start":null,"text":""}],[{"start":223.8,"text":"“We have no income, yet we still have to pay rent,” said Danial. In a sign Dubai officials might be tightening the regulatory screws on Iranian merchants, commerce inspectors in recent weeks fined him and several other shops for what he described as small bureaucratic infractions. “They’ve become stricter, 90 per cent of all of us got a fine,” he said."}],[{"start":243.84,"text":"Since the start of the war, the UAE has absorbed more Iranian attacks than any other Gulf state, with almost 3,000 missiles launched at the country, causing a slump in tourism and damaging key infrastructure."}],[{"start":255.52,"text":"This fuelled a hawkish stance in the UAE, which even launched secret air strikes against Iran earlier in the war, and Dubai early on closed an Iranian-linked club and hospital."}],[{"start":266.88,"text":"Some trade resumed — including the dhows and Iranian flights to Dubai — as Abu Dhabi and Tehran sought to de-escalate tensions after a shortlived US-Iran interim deal in June that was supposed to reopen the strait."}],[{"start":279.68,"text":"But that diplomatic effort was upended after Iran last week fired missiles towards the UAE, which it had not targeted directly since mid-May."}],[{"start":288.12,"text":"Still, Batmanghelidj said the UAE “has an amazing ability to pursue its interests through economic diplomacy”."}],[{"start":295.16,"text":"“Over the last 20 years they have modulated their level of economic engagement with Iran in different periods,” he said. “But they’ve never really allowed US sanctions to fully determine how much trade they do.”"}],[{"start":308.32,"text":"Some Iranian nationals Danial knew had decided to leave the UAE, not only because of concerns over whether they were still welcome in the country where many were born or had lived their entire life, but “most of them are bankrupt”. He, too, was making plans to pack up and leave."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":318.8,"text":"But many argue that Iran’s commercial relations with Dubai are too deep to be uprooted entirely. “Iranian traders have been a foundational component of Dubai’s economy since long before the oil era,” said Justin Alexander, director of consultancy Khalij Economics and a non-resident fellow at the Baker Institute for Public Policy."}],[{"start":339.272,"text":"The US Treasury department on Friday announced that it would cut the UAE branches of Banque Misr, Egypt’s second-largest bank, off from banking access to US financial institutions as part of its economic crackdown on Tehran."}],[{"start":352.72,"text":"Merchants in Iran sounded a defiant note and appeared prepared to face any further restrictions on their activities. The country has spent decades setting up alternative commercial routes and channelling payments through exchange houses or shell companies designed to withstand sanctions."}],[{"start":368.48,"text":"“We have put a lot of goods in warehouses in Turkey now in case the UAE route is closed again,” said a Tehran-based businessman. He said the Iranian dhow trade with Dubai appeared to have been curtailed, but said some shipments were rerouted through Oman. The US has maintained a naval blockade on Iranian ports since mid-July."}],[{"start":386.72,"text":"However, the businessman said he was able to load cargo on to ships in Dubai bound for Iran’s Bandar Abbas port by way of entering fake destinations on official documents. The cost of shipping goods had soared, but was still lower than at the height of the war, when the UAE was subject to almost daily Iranian attacks and few ships were moving through the Strait of Hormuz."}],[{"start":408.76,"text":"“We are bypassing the blockade in the same way we have been bypassing sanctions,” the Iranian businessman said. “Not much has changed.”"}],[{"start":417,"text":"Dubai’s media office, the Emirati foreign ministry and the port authorities did not respond to requests for comment."}],[{"start":424.4,"text":"Elsewhere in Dubai, Iranian businesses carried on as usual. A fruit and vegetable vendor at the large indoor waterfront market sold Iranian produce — lettuce, sweetcorn, tomatoes and almonds — that, according to him, arrived via the established maritime channels. “Sometimes it’s a bit less, sometimes a bit more, but now it’s OK,” he said."}],[{"start":445.8,"text":"The Iranian Business Council, a non-profit promoting bilateral commerce, is still operational, according to an employee reached by phone. Travel agents in Tehran said this week that Iranian airlines were still flying to Dubai."}],[{"start":459.04,"text":"And two leading Iranian lenders, Bank Melli and Bank Saderat — both under US sanctions — were still open serving clients. US Treasury secretary Scott Bessent called for every Melli branch in the world to be shuttered. The two Iranian banks combined have more than a dozen branches in the UAE."}],[{"start":477.56,"text":"An employee of Melli said some of their clients, whether from Iran, Russia or local, were initially worried about the fate of their deposits but there had been no noticeable impact on day-to-day financial transactions so far, including lending and securing letters of credit. The bank recently renewed its licence with the UAE Central Bank, she said."}],[{"start":497.56,"text":"“Business is down, but the whole world is affected,” the Bank Melli employee said. She also said she had worked for more than two decades at the bank and remembered previous rounds of sanctions."}],[{"start":508.32,"text":"“We’re used to this,” she said."}],[{"start":510.64,"text":"Additional reporting by Andrew England in London"}],[{"start":516.64,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1787987344_9937.mp3"}