A "truce" between the UAE and Iran, agreed after direct contacts between senior officials in mid-June, is helping both countries manage the fallout of the wider Gulf war and undermining Washington's strategy of economic pressure, Esfandyar Batmanghelidj, founder of the Bourse & Bazaar Foundation, wrote in a note published August 7.

The de-escalation has spared Emirati cities and critical infrastructure from the direct attacks Iran has continued to level at other Gulf states, Batmanghelidj notes, citing a Financial Times report on the truce. The UAE exported more crude through the Strait of Hormuz than any other Gulf producer in July, with supertankers loading from secondary terminals at Zirku and Das islands and smaller vessels conducting ship-to-ship transfers off Fujairah before crossing the strait - a sign, he writes, that the FT's characterisation of the truce as a "bold gamble" is paying off.

Emirati officials deny making direct financial transfers to Iran, and Batmanghelidj is sceptical of reports the UAE paid Tehran "billions of dollars" to halt attacks, arguing any such inflow would show up immediately in Iran's foreign-exchange markets. What Iran needed, he argues, was not cash but the logistical and financial channels to procure goods.

Over 50 container ships crossed between the UAE and Iran in July, according to shipping-data provider Kpler, approaching pre-war levels - feeder services between the Iranian ports of Bandar Lengeh and Bandar Abbas and the Emirati ports of Port Rashid and Jebel Ali, carrying fruit and vegetables out and industrial intermediate goods back. At least eight bulk carriers crossed the strait in the past week to call at Bandar Imam Khomeini, delivering grain and animal feed to a country reliant on imports to cover its food-consumption shortfall; Iranian importers regained the dollar liquidity needed to pay for those cargoes through the UAE's financial system, reversing a block Emirati authorities imposed in early March after the first wave of Iranian strikes on Dubai and Abu Dhabi.

Not appeasement, but interdependence

Batmanghelidj pushes back on Western commentary that frames the UAE's continued economic engagement as a form of appeasement.

"It is a reflection of the deep and long-standing interdependence between the two countries," he writes. "As the war dragged on, Emirati officials needed to mitigate harm to key parts of the economy, ranging from the oil industry to the tourism sector. Likewise, Iranian officials needed to restore critical supply chains, sustaining manufacturing output and safeguarding food security to maintain stability during the war."

He argues the dynamic also explains why a reported Israeli push for a "land blockade" of Iran - convincing regional states to shut border crossings and ports to Tehran - has gone nowhere: neighbouring states' own economic engagement with Iran is what lets them manage the instability created, in his telling, by the Trump administration's oscillation between offering a deal and threatening further strikes.

"Six months on, it is clear that the war has no military solution, only a diplomatic one," Batmanghelidj concludes, framing the UAE's restored trade with Iran as evidence that regional actors, not Washington, are setting the terms of how the conflict actually winds down.