The Gulf: sitting on a security fault line

Donald Trump's economic D-Day.

The Emiratis have said they're going to break all economic ties with Iran.

Now, call me a cynic, Christian, but I don't see that happening.

Do you?

Well, I think we're now just over six months since Operation Epic Fury began.

And at the beginning, President Trump declared it would be over within, I think, four to six weeks.

It's clearly not over.

We haven't seen a return to the intensive kinetic military operations that we saw up until the 8th of April, but we also haven't seen any resolution.

We obviously had the Memorandum of Understanding, the MOU, signed in mid-June, and it collapsed within weeks, partly because both sides interpreted it completely differently.

There was a lack of detail in sequencing specific mechanisms to put it into effect.

And I think it illustrated the complete lack of trust both sides have in the other, and with good reason.

From an Iranian side, the US has now twice engaged in negotiations in 2025 and 26, and broken off to initiate or support military action.

And from the US side, there's obviously a long history of distrust of Iranian policy intentions.

We are where we are.

And so I think the economic D-Day Trump announced at the end of August was a way of trying to regain the initiative, not just through the blockade of Iranian ports, which has had an impact on Iran's oil exports, but now also by escalating the pressure on Iran's trading activities.

And clearly the UAE has in the past been a major contributor trade partner, both legitimately and in terms of re-exports and or illicit networks as well.

So in that respect, clearly the Iranian economy is vulnerable to any escalation of pressure that really targets the UAE.

So the UAE has said they will halt relationships.

That's I mean, I'm sure we can see an attempt to duplicate President Trump.

Nobody wants to be on President Trump's bad side at the moment, especially as the president does seem to be acting in even more of a cavalier and unpredictable way at the moment.

It'll be interesting, I think, to see whether there's obviously a crackdown, not just on legitimate forms of trade, but the illicit flows as well.

I think that will be key because there are these two elements, these two sides to the coin.

Now, we've already seen a bank, for example, the UAE branch of Bank Mesir from Egypt.

being hit by FinCEN sanctions.

But for example, there are Iranian banks that continue to operate legitimately in the UAE that don't seem to have been targeted.