UAE Faces Economic Disruption from Iran-Linked Attacks and Strain on Exports

The United Arab Emirates is facing a severe test of its long-standing reputation as a stable business haven in the Middle East, as regional conflict has led to direct attacks and significant economic disruption. The nation, a close ally of the United States and Israel, has endured more missile and drone attacks from Iran than any other country during the recent hostilities, according to officials.

These attacks, combined with Iran's effective closure of the Strait of Hormuz, have more than halved the UAE's exports of crude oil and natural gas. The vital tourism and conference sector, estimated to account for more than 12 percent of economic output, has also been hit hard. Since the conflict began, over 70 scheduled events in the UAE have been postponed, canceled, or otherwise affected, according to an advisory firm.

While the government has portrayed itself as unfazed, it is making substantial strategic changes. It has announced plans to build a second pipeline to reduce reliance on the Strait of Hormuz and has withdrawn from the OPEC oil cartel to pursue longer-term energy production goals. A recent drone attack on the Barakah nuclear power plant underscored the persistent...