Introduction
 
Economic diplomacy, as a core component of contemporary foreign policy, encompasses a wide range of activities, including trade, foreign investment, financial and banking relations, and bilateral, multilateral, and international political-economic negotiations. Within this framework, the relationship between economics and politics has become increasingly interdependent, with each influencing and shaping the other.
 
In the context of the Middle East and the Persian Gulf region, bilateral relations between Iran and the United Arab Emirates (UAE) occupy a unique position for several reasons. Unlike Iran’s relations with many of its other neighbors, the Iran–UAE relationship is characterized by a paradoxical coexistence of political and security tensions alongside extensive economic, financial, and trade interactions. Even at times of heightened political strain, economic ties between the two countries have never been fully severed.
 
Iran, with its rich historical legacy, vast territory, significant deterrence capacity, abundant energy resources, and revolutionary-republican political system, often adopts a revisionist posture in both regional and international politics. Some of these actions are perceived by the UAE as security threats, prompting a range of diplomatic and strategic responses.
 
In contrast, the UAE is a relatively young nation-state with a conservative political system, structured as a hereditary federation. Nonetheless, it adopts a pragmatic economic approach, emphasizing growth, diversification, and modernization. Through strategic alignment with Western powers, the UAE has successfully compensated for its geographical limitations and has utilized its oil revenues to invest heavily in cutting-edge technologies across sectors such as services, logistics, and infrastructure. By developing robust air and sea transport networks, the UAE has emerged as a major regional economic hub, facilitating substantial daily trade flows, including both direct and re-export transactions.
 
This study analyzes Iran–UAE bilateral relations over the period 2015 to 2024, with a particular focus on the role of economic diplomacy. It explores the volume and patterns of trade, exports, and imports, and assesses the specific mechanisms and strategies through which economic diplomacy has been pursued. Additionally, it considers the impact of external factors—such as sanctions, regional rivalries, and international alignments—which have consistently influenced the trajectory of bilateral relations between the two countries.
Literature Review
Mahjoub Zweiri and Nael Abusharrar (2022), in their article “Iran’s Trade with Neighbors: The Impact of Sanctions and Alternatives,” examine the effects of international sanctions on Iran’s political and economic landscape, with a particular focus on its economic relations with the United Arab Emirates (UAE) and Qatar. The authors argue that although the UAE—due to its close alignment with the United States—supported Washington’s sanctions against Tehran, resulting in a notable decline in Iran-UAE trade between 2011–2015 and again after 2017, the complete severance of trade ties proved unfeasible due to the sheer scale and depth of their economic interdependence.
Alireza Koohkan and Majid Mokhtari (2024), in their study “The Role of Economy and Bilateral Trade Relations in the Foreign Policy of the United Arab Emirates Towards the Islamic Republic of Iran from 1992 to 2022,” contend that rather than improving, bilateral relations have become increasingly strained. They argue that the UAE has strategically used regional and international crises to intensify pressure on Iran and bolster its own regional and global standing. According to the authors, the UAE’s assertive foreign policy—reinforced by the signing of the Abraham Accords and the normalization of relations with Israel—has further reduced the likelihood of resolving long-standing security disputes with Iran. Economically, the UAE has sought to shift the trade balance to its advantage, thereby establishing an asymmetric interdependence with Iran.
Despite these valuable contributions, the present study offers several unique insights. First, it is the first structured analysis to focus specifically on the role of economic diplomacy in Iran–UAE relations during the period 2015–2024. Second, it investigates how political dynamics influence economic indicators, rather than treating them as separate phenomena. Third, by compiling empirical data on trade flows over the past decade, the study provides a nuanced analysis of economic interdependence between the two countries. Finally, this research aims to partially address the existing scholarly gap in studies that integrate political and economic dimensions in Iran–UAE relations. This article employs an explanatory research methodology, relying on data collected from library sources, economic databases, and reputable specialized websites.
Discussion
During the period under review, significant regional and international developments have profoundly influenced Iran–UAE relations. Prominent among these are bilateral political tensions, particularly the long-standing dispute over the three Iranian islands in the Persian Gulf; regional conflicts, including the wars in Yemen and Syria; the historical rupture in Iran–Saudi Arabia relations; and the evolving Iranian nuclear issue, especially following the signing and subsequent challenges surrounding the Joint Comprehensive Plan of Action (JCPOA). Each of these factors has had a tangible impact on the volume and dynamics of economic exchanges between Iran and the UAE. Despite persistent political and security tensions during the 2015–2024 period, the deeply interwoven economic and trade relations between the two countries ensured the continuation of economic cooperation, even during times of heightened diplomatic discord. Nevertheless, periods of intensified political disputes often corresponded with declines in trade volumes, illustrating the sensitive interplay between politics and economics in the bilateral relationship. Both countries have pursued their national interests through proactive economic diplomacy, aiming to mitigate political tensions and capitalize on mutual economic benefits. The UAE has played a pivotal role in Iran’s regional trade, serving as one of its primary commercial gateways, particularly for re-export activities and financial services. Conversely, Iran's geostrategic location, abundant energy resources, and large consumer market render it a critical economic partner for the UAE. In this context, economic diplomacy has emerged as a pragmatic and effective tool for managing bilateral relations, allowing both countries to pursue strategic objectives through economic engagement, especially in a region characterized by volatility and geopolitical rivalries. It has functioned not only as a means of maintaining ties amid political challenges but also as a mechanism for building confidence and promoting longer-term cooperation.
Conclusion
The present article, which examines bilateral economic diplomacy in relations between Iran and the United Arab Emirates (UAE) from 2015 to 2024, addresses the following question: How has economic diplomacy manifested itself in the bilateral relations between Iran and the UAE during this period, and what were the primary factors influencing it? After outlining and presenting the conceptual framework of economic diplomacy as the core structure of the research, the study delves into some of the most significant political and security issues and challenges in Iran-UAE relations over time.
Key factors include the dispute between the UAE and Iran over the ownership of the three Iranian islands, the UAE's opposition to Iran's nuclear and missile programs, and the disagreements and conflicts of interest between the two countries in major regional developments during the research period, such as the Yemeni and Syrian wars. Additionally, the role of Saudi Arabia's policies, the UAE's close relations with the United States, and the impact of these factors on bilateral relations are examined.
A review of economic, trade, and financial indicators between Iran and the UAE, particularly in exports and imports, reveals that despite the substantial volume of economic exchanges in various fields—and especially Iran's greater dependence on the UAE compared to the UAE's reliance on Iran—this relationship has always been influenced by the prevailing political climate between the two nations. Whenever tensions between the two countries reached a critical point in terms of politics and security, economic relations also deteriorated. Conversely, whenever tensions eased due to various factors, such as diplomatic talks between leaders to de-escalate tensions or shifts in the policies of regional and extra-regional countries, including Saudi Arabia and the United States, toward Iran, the UAE's relations with Iran tended to improve and grow closer. In summary, despite numerous differences, the two nations' geographical proximity and economic interdependence have enabled them to achieve significant benefits through active and effective economic diplomacy.