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Having fallen out with each other after serious allegations in 2016, Abu Dhabi and Tehran are reconnecting after a long gap across a complicated .

Arriving in Tehran last week after a spate of visits to Turkey, Qatar, , and Jordan, the UAE’s top national security adviser Sheikh Tahnoon bin Zayed Al Nahyan recently held high-level talks with President Ebrahim Raisi and other top officials.

Though Abu Dhabi has been with other countries in the region, this was its first major overture towards Iran in many years.

It has been a successful venture, with President telling Tahnoon that, “improving ties with the regional countries is my government’s priority, therefore we welcome improving ties with the UAE. The security of the regional countries is intertwined, and Iran supports the security of the Persian Gulf states.”

While meeting his counterpart Ali Shamkhani, the secretary of Iran’s Supreme National Security Council (SNSC), Tahnoon  that the UAE wanted “warm and brotherly” ties with Iran as a geopolitical power and proposed the formation of working groups for identifying potential areas to boost economic ties and remove any impediments.

In response, Shamkhani said that developing relations with neighbours was also Iran’s top priority in foreign policy and efforts should be made to end military and security crises with dialogue. A diplomatic process has been initiated which could potentially become a turning point in UAE-Iran relations.

“Sheikh Tahnoon ’s visit to Tehran is particularly important,” a senior European diplomat who previously served in Iran, and is currently posted in Islamabad, told ������, on condition of anonymity.

“By being the highest-level UAE official to visit Iran in more than a decade, it can be seen as confirmation of the willingness of both countries to overcome the problems which affected a historically close relationship, including, seen as such from Tehran, the UAE -Israel deal.”

After Iran and the UAE had backed opposite camps in the Yemen war, Abu Dhabi’s participation in the had become another major point of divergence with Tehran. With Iran willing to re-engage with the UAE, some analysts believe it shows that Tehran is prepared to overlook warming ties with Israel.

However, Tel Aviv is wary about this newfound bonhomie between Abu Dhabi and Tehran, and it has conveyed in no uncertain terms its concerns with the UAE’s warming ties with Iran.

Laying it out clearly, a senior Israeli official the Yedioth Ahronoth newspaper that, “(UAE) parallel rapprochement with Iran and Israel is not acceptable.”

Meanwhile, Saudi Arabia has had four rounds of talks with Iran in Baghdad without any solid results. The Kingdom had severed ties with Tehran in 2016 after the Joint Comprehensive Plan of Action (JCPOA) nuclear pact was derailed.

In September, both foreign ministers met at the UN General Assembly meeting in New York, but without any breakthrough. Saudi Foreign Minister Prince Faisal bin Farhan al-Saud had to later  at a presser in Riyadh that, “these talks are still in the exploratory phase.”

Considering that Riyadh’s have proceeded somewhat slowly, and cautiously, what has prompted Abu Dhabi and Tehran’s sudden rapprochement?

Firstly, the timing of the UAE minister’s visit coincided with the . Interestingly, Abu Dhabi reached out at a time when efforts to save the JCPOA were on the edge and Riyadh had already failed to make headway in bilateral meetings with Tehran.

“The visit, in addition to its geopolitical symbolism linked to the recent changing regional dynamics, is also strictly related to the ongoing JCPOA talks in Vienna and to the perspectives of its revival,” the European diplomat told ������.

From the Iranian side, it is likely seen as an opportunity - provided the JCPOA can be saved - to “revive” the “good old financial channels” in Dubai which helped support the Iranian economy, when a large export trade of other countries’ goods, including from Europe, came from Dubai’s ports and airports.

Soon after Tahnoon’s visit, the Biden administration announced to send a senior delegation to Abu Dhabi to “ramp up pressure on entities doing business with Iran.” Being a regional business centre, Dubai’s banks are under observation for non-compliance with American sanctions on Iran.

In particular, these US officials will meet UAE-based petrochemicals companies, private firms, and banks engaged in business worth billions of dollars with Iran. Therefore, the revival of the JCPOA is in the wider interest and it is possible that Riyadh and Abu Dhabi are urging Tehran to “” and bring the Vienna talks to a successful conclusion.

Bringing back the JCPOA is essential, the diplomat says. “It has to be added that in addition to the official trade between the UAE and Iran, there have been in recent years, significant smuggling flows; illegal imports from Dubai have been estimated in Iran in the old days at nearly 40% of official imports,” they said.

“However, I think that Tehran is aware that without significant progress in the JCPOA talks, there would not be any comeback of Dubai as a trade route, adding an element of complexity to the overall scenario.”

Secondly, Iran and the UAE have had thriving trade ties for nearly a century as the emirate of Dubai lies just 150 kilometres across the Gulf and is one of Tehran’s closest links with the rest of the world.

“I believe that the most important aspect of their relationship is economic,” , a non-resident fellow at the Middle East Programs at the Atlantic Council in Washington and PhD candidate in International Relations, told ������.

While Iran and UAE already have good commercial relations, especially through Dubai, this economic cooperation can further be advanced. Indeed, if their trade ties are stable, the UAE-Iran equation becomes sustainable, Azodi says.

“If these two economies are interconnected and tightened to each other very closely, political tensions can be navigated much easier. In essence, I am arguing for further economic inter-dependence of the two countries especially through Dubai where many Iranian merchants live and do business.”

And they seem to be moving in this direction. According to , Turkey, Iran, and the UAE have recently clinched an important economic agreement under which goods can be sent from the UAE to Iran and then to Turkey and beyond.

Finally, the safety of trade routes remains a major concern for Abu Dhabi.

Diplomatic ties with Tehran ended as the UAE backed the Yemeni government against Houthi rebels, to whom Iran extended support. Even then, Abu Dhabi reached out to Tehran with a military cooperation agreement to protect its shipping.

The UAE scaled down its role in Yemen soon after tankers in the Gulf and Saudi energy infrastructure was targeted in 2019.

“Another aspect that helps stabilise their relations is maritime security,” Azodi says. “Both countries are dependent on the Persian Gulf for imports and exports. A forum where Iranian and UAE officials can discuss and cooperate over maritime security is another avenue of cooperation.”

In his opinion, joint security efforts can bring Abu Dhabi and Tehran even closer. “Additionally, both countries see ISIS and extremists as a threat to their security and cooperation on these mutual sources of interest are beneficial to both and as a result can stabilise their relations.”

However, business ties would remain the main priority, adds Azodi, with trade and economic cooperation the most effective means of stabilising their relations.

Indeed, hit by sanctions, Iran did not completely cut off ties with the UAE as it needed an outlet for business, especially as its oil exports and international trade were drastically reduced due to US economic sanctions.

Since then, Dubai has become a valuable trade hub for Iran, helping it work around the hurdles.

Sabena Siddiqui is a foreign affairs journalist, lawyer, and geopolitical analyst specialising in modern China, the Belt and Road Initiative, the Middle East, and South Asia. 

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