Tag Archives: United Arab Emirates (UAE)

An Economic War May Be More Effecting Than A Kinetic War

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The war in Iran is dragging on. The Iranian people are still not free and the Revolutionary Guard is still in charge. However, things may be beginning to change.

On Monday, The New York Post reported:

A US ally in the Middle East has finally cut off Iran — and it could be one of the biggest threats to the regime yet.

The United Arab Emirates, which serves as Tehran’s largest supplier of goods, suspended all trade with the Iran over the weekend — nixing $6 billion in cash that went to the regime from exports, as well as access to vital supplies from the outside world.

Dubai — the UAE’s thriving commercial hub — is by far Iran’s largest supplier of goods. The Emirati government finally got fed up with Iran following repeated missile attacks that triggered evacuations for the first time during the war.

The move not only threatens the $21.3 billion trade relations between the two nations, it also leaves Iran without its primary way to collect US dollars, Mark Kimmitt, a retired US general and former assistant secretary of state, told The Post.

“If the Emirates cease trade and blocks dollar flows, it could have a crippling effect on the Iranian economy,” Kimmitt said.

Dubai essentially served as Iran’s window to the world after years of being slapped by Western sanctions, with traders buying and re-exporting consumer goods, food and industrial equipment to Iran.

Iran made a tactical error when it began attacking its Arab neighbors. The only hope to keep the Iranian economy afloat right now is China.

The article notes:

Traffic through the Strait of Hormuz has begun recovering despite Iran’s threats, even as the regime announces new penalties for vessels that refuse to play by its rules. Some ships are using routes Iran doesn’t recognize. Others are sailing with their transponders switched off, making the precise traffic picture difficult to measure. But the larger point is becoming harder for Tehran to hide: intimidation isn’t working the way it used to.

Iran, naturally, is handling this with all the composure you’d expect.

Mohsen Rezaei, the regime’s new security chief, warned that countries cooperating with America’s economic campaign could be treated as committing an “act of war.” Tehran is also threatening retaliation against neighboring countries and economic interests if they help Washington tighten the screws.

It’s hard to win the poker game when you don’t have the cards.

The New Alliances In The Middle East

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On Monday, Hot Air posted an article about the new alliances that have formed in the Middle East as a result of Iran’s behavior.

The article reports:

It’s been little noticed by the media, but ever since the beginning of the Iran War, Arab countries have been quietly, but not secretly, coordinating with Israel.

The UAE, for instance, has Israeli advisors on the ground who are helping with air defense, and an Iron Dome battery is based in the UAE. During the 12-Day War, several Arab countries shot down Iranian drones aimed at Israel.

…And now, the UAE has made clear that they are entering the kinetic side of the war, and are coordinating with Israel and presumably the United States, and are not hiding their cooperation with Israel in the least.

…While the media portrays this war as primarily the US and Israel against Iran, most of the strikes that Iran has made have been against the Gulf Cooperation Council countries. During the 12-Day war, Iran not only struck Israel, but also Qatar, which has a US base.

The article concludes:

It is possible that today’s attacks on the UAE are intended to create a rift among the GCC states, especially following the UAE’s exit from OPEC. Qatar’s recent condemnation of the Iranian attacks suggests that this is unlikely. 

Things are getting interesting again. 

Qatar has been playing both sides of the street up until recently. Much of the Hamas leadership was safely ensconced in Qatar after the September 7 attack on Israel. Qatar has also historically been a major funding source for terrorism. It will be interesting to see if that changes. The countries in the Middle East have a choice–do they align with the country ruled by a tyrant whose ordinary citizens still live in the 5th century with very little freedom or do they align with a successful democracy that leads the world in scientific achievement and continues to prosper despite attacks from all sides. Who would you want as your trade partner?

Rapid Changes In The Middle East

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I am writing this on Friday, May 1. The United Arab Emirates (UAE) left the Organisation of Petroleum Exporting Countries (OPEC) today. Saudi Arabia will no longer control how much oil the UAE can sell. It will be interesting to see what happens to crude oil prices in the next week. But there is another wrinkle in this that is important.The Habshan-Fujairah pipeline became operational in June 2012. It goes from the Habshan plant to the Fujairah Oil Terminal in the Gulf of Oman.

Here is the map:

As you can see, the pipeline allows oil shipments from the UAE to avoid the Strait of Hormuz.

On Thursday, The Pipeline Technology Journal reported:

The United Arab Emirates announced its departure from OPEC on Wednesday, as the Habshan-Fujairah pipeline becomes its strategic lifeline, guaranteeing more oil to the global market.

Coming amid the Strait of Hormuz closure, the move signals a seismic shift in global energy geopolitics and a pivot toward Western market stability.

The decision underscores the growing importance of the UAE’s strategic infrastructure—specifically the Habshan-Fujairah pipeline. 

Unlike the export routes used by many of its neighbors, the Fujairah pipeline allows the UAE to transport crude directly from its inland fields to the Gulf of Oman, bypassing the Strait of Hormuz entirely.

By utilizing this 230-mile overland route, the UAE can guarantee the delivery of up to 2 million barrels of oil per day to international markets. 

This capability provides a critical safety valve for global supplies, which total approximately 100 million barrels daily, at a time when regional tensions have turned the Strait of Hormuz into a volatile maritime chokepoint.

The Strait has long been the “weak link” in global energy security. While previous conflicts involving the Soviet Union, Iran, and Iraq failed to shutter the waterway, recent diplomatic and military pressures have heightened fears of a prolonged disruption. 

The UAE’s ability to “pull the trigger” on an alternative route effectively fractures the historical monopoly held by Middle Eastern producers since OPEC’s formation in 1960.

Analysts suggest the move reflects a broader rebalancing of energy power toward the United States. Following the 2022 sabotage of the Nord Stream pipelines, which saw Europe trade Russian gas for American supplies, a similar trend is emerging in the oil sector. 

This is what you get when you elect a businessman as President of America.