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Smoke believed to be from an Iranian attack billows from an energy facility in Fujairah, United Arab Emirates (UAE), on May 4 (local time). / AFP, Yonhap

The United Arab Emirates (UAE) has decided to suspend all financial and economic transactions until further notice, citing missile threats from Iran, Reuters reported on the 19th (local time).

Afra Al Hameli, director of strategic communications at the UAE Foreign Ministry, said, "The current situation threatens regional and international security," announcing a suspension of all trade and financial transactions with Iran.

The UAE Ministry of Defence announced the previous day that it had detected two ballistic missiles launched from Iran, explaining that the missiles appeared aimed at maritime traffic and both landed in the sea.

Dubai, the UAE's major commercial hub, has long served as an important economic link for Iran, meaning this suspension of financial and trade dealings is expected to deal a direct blow to Iran's economy as well.

Iran's Foreign Ministry immediately pushed back, denying the claims and calling the UAE's allegations baseless.

The UAE, a key U.S. ally, has been drawn into the conflict since the U.S. and Israel launched their military operation against Iran in February. While it was the Gulf country hit hardest by Iranian attacks in the war's early stages, there have been no strikes on UAE soil since the attack on the Fujairah port — a major oil export hub — on May 4.

Maritime attacks, however, have continued. Abu Dhabi National Oil Company (ADNOC) said its vessels transiting the Strait of Hormuz have come under missile and drone attack. While Iran has not claimed responsibility for the ADNOC vessel attacks, Iran's Islamic Revolutionary Guard Corps (IRGC) had previously warned it could take action against vessels belonging to hostile states or those that fail to comply with its directives.

The missile attack on the UAE came just after the 60-day negotiation deadline set under the U.S.-Iran ceasefire memorandum of understanding expired. Reuters assessed that the breakdown in negotiations has raised the likelihood of renewed escalation, adding that the UAE's latest move, combined with rising tensions in the Strait of Hormuz, is adding further uncertainty to global oil markets and maritime shipping.

                                                                                                          Park Jin-sook