The UAE paid Iran billions of dollars in return for a halt to attacks on the country in an about-face for the Gulf state that staked out the most hawkish position on Iran, lobbying the US to continue waging war on the Islamic Republic, Reuters reported on Friday.
The UAE has already delivered $3bn to Iran as part of the agreement, which two regional sources said reached as high as $10bn. Two other sources told Reuters that the UAE would eventually pay Iran $20bn.
The report reflects a stunning turn of events for Abu Dhabi and an indicator that Iran has emerged stronger from the war.
The UAE joined the US and Israel in conducting dozens of strikes on Iran during the war. It also tried to prevent Pakistan from mediating an end to the conflict.
Saudi Arabia had to supply a fresh loan to Islamabad after the UAE called in its debt obligations as punishment for hosting talks.
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Israeli Prime Minister Benjamin Netanyahu made a wartime visit to the UAE, according to Israeli authorities. Israel and the UAE then sealed a deal to develop a joint defence acquisition fund, Middle East Eye revealed.
Last week, the UAE hosted members of Iran’s Islamic Revolutionary Guard Corps for a meeting with Sheikh Tahnoun bin Zayed al-Nahyan, the UAE’s national security adviser and deputy ruler of Abu Dhabi.
The IRGC officials, who are sanctioned by the US, stayed at Tahnoun’s guest house.
The UAE also dispatched diplomats to engage in face-to-face talks with senior Iranian officials this week to de-escalate tensions, Bloomberg reported.
A Gulf diplomat told MEE their government believed the meeting was held in Tehran as part of an effort to ensure the UAE wasn’t attacked.
Hit hard
The UAE noticeably avoided strikes in recent days that have hit smaller and poorer Arab states in recent weeks as the fragile ceasefire between the US and Iran was tested. Iran has attacked Bahrain, Kuwait and Jordan in retaliation for US strikes.
Reuters did not say whether the billions of dollars provided to Iran came from accounts linked to Tehran, which Abu Dhabi had weighed freezing, or from Emirati sovereign funds.
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The UAE has been a financial hub for the Islamic Republic for decades, underscoring how business between the two states transcended their geopolitical rivalries. Iranians are big players in the UAE’s real estate market.
After the US and Israel launched their war on Iran, the UAE mulled freezing billions of dollars linked to Iran, but there was never public confirmation that it followed through on the threat.
Esfandyar Batmanghelidj, the CEO of the Bourse & Bazaar Foundation, wrote on X that the deal was likely the first step towards rekindling those economic ties.
“Everyone needs to remember that the UAE is Iran’s most important trading partner. By ‘releasing’ funds to Iran, the UAE ensures those funds will be spent in the Emirates,” he wrote on X.
“Both countries will double down on economic interdependence and the multiplier effects of bilateral trade,” he added.
One source told Reuters that the agreement would be a way for Iran to obtain the payoff it sought in return for a ceasefire, while allowing the Trump administration to claim it did not pay.
Given the US’s deep intelligence networks in the Gulf, it would be unlikely for Washington not to know that the UAE’s national security advisor was hosting IRGC officials in his guest house, one former US intelligence official told MEE.
The payment comes as the US and Iran appear to be on the cusp of striking a 60-day memorandum of understanding to negotiate over the Strait of Hormuz and Iran’s nuclear programme.
The Reuters report comes after the Washington Post reported that Qatar agreed to close its Ras Laffan refinery in exchange for Iran not launching further strikes on it. Qatar denied coordinating the shutdown with Iran.
