The United Arab Emirates paid Iran billions of dollars in exchange for a halt to Iranian strikes on the Gulf state, Reuters reported on Friday, June 12 — a dramatic reversal for Abu Dhabi, which had been among the most vocal Arab governments pushing for continued military pressure on Tehran.
The UAE has already delivered $3 billion to Iran as part of the agreement. Two regional sources told Reuters the deal could reach as high as $10 billion, while two other sources said the final figure could climb to $20 billion.
The payment came after senior officials from Iran’s Islamic Revolutionary Guard Corps travelled to Abu Dhabi for direct talks. Last week, the UAE hosted IRGC members for a meeting with Sheikh Tahnoun bin Zayed al-Nahyan, the UAE’s national security adviser and deputy ruler of Abu Dhabi. The IRGC officials, who are sanctioned by the United States, stayed at Sheikh Tahnoun’s guest house.
The UAE also dispatched diplomats this week to engage in face-to-face talks with senior Iranian officials to de-escalate tensions, Bloomberg reported.
A Striking Reversal
The deal marks a sharp departure from the position Abu Dhabi held throughout the conflict. The UAE had staked out the most hawkish position on Iran among Gulf Arab states, actively lobbying the United States to continue waging war on the Islamic Republic. The UAE also joined the US and Israel in conducting dozens of strikes on Iran during the war and tried to prevent Pakistan from mediating an end to the conflict.
Saudi Arabia had to supply a fresh loan to Islamabad after the UAE called in Pakistan’s debt obligations as punishment for hosting peace talks.
Israeli Prime Minister Benjamin Netanyahu made a wartime visit to the UAE, according to Israeli authorities, after which Israel and the UAE sealed a deal to develop a joint defence acquisition fund, Middle East Eye reported.
The speed of Abu Dhabi’s pivot — from co-belligerent to paymaster of a bilateral ceasefire deal — has few modern precedents in Gulf diplomacy.
Why the UAE Moved
The calculation behind the payment appears straightforward: self-preservation. The UAE noticeably avoided strikes in recent days that have hit smaller and poorer Arab states. Iran attacked Bahrain, Kuwait, and Jordan in retaliation for US strikes as a fragile ceasefire between Washington and Tehran was tested.
Abu Dhabi, home to one of the world’s busiest airports, a major global financial centre, and the bulk of the UAE’s oil infrastructure, faced severe economic consequences from any direct Iranian strike. The reported payment appears to have bought it out of that exposure.
One source told Reuters that the agreement would serve as a way for Iran to obtain the payoff it sought in exchange for a ceasefire, while allowing the Trump administration to claim it had not paid Tehran directly.
Given the US’s deep intelligence networks in the Gulf, it would be unlikely for Washington not to know that the UAE’s national security adviser was hosting IRGC officials in his guest house, one former US intelligence official told Middle East Eye.
Economic Logic
Analysts note that the payment is not purely political — it reflects longstanding financial ties between the two countries that survived years of geopolitical hostility.
The UAE has been a financial hub for Iran for decades, underscoring how business between the two states transcended their geopolitical rivalries. Iranians are major players in the UAE’s real estate market.
After the US and Israel launched their war on Iran, the UAE considered freezing billions of dollars linked to Iran, but there was never public confirmation that it followed through on the threat.
Esfandyar Batmanghelidj, Chief Executive Officer of the Bourse & Bazaar Foundation, said the deal signals the start of a broader economic reset between the two neighbours. “Everyone needs to remember that the UAE is Iran’s most important trading partner. By ‘releasing’ funds to Iran, the UAE ensures those funds will be spent in the Emirates,” he wrote on X.
“Both countries will double down on economic interdependence and the multiplier effects of bilateral trade,” he added.
Reuters did not specify whether the billions delivered to Iran came from accounts linked to Tehran that Abu Dhabi had weighed freezing, or from Emirati sovereign wealth funds.
Regional Ripple Effects
The UAE deal is not the only arrangement of its kind emerging from the conflict’s winding-down phase. The Washington Post reported that Qatar agreed to close its Ras Laffan refinery in exchange for Iran not launching further strikes on it. Qatar denied coordinating the shutdown with Iran.
Taken together, the UAE and Qatar episodes suggest a pattern: Gulf states, unable to rely fully on US protection during active fighting, sought individual arrangements with Tehran to protect their own territory and infrastructure. That dynamic shifts the regional balance in ways that will outlast any formal ceasefire agreement.
A Gulf diplomat told Middle East Eye that their government believed the UAE-Iran meeting had also been held in Tehran as part of an effort to ensure the UAE was not attacked.
Background
The US-Israel military campaign against Iran triggered a series of retaliatory strikes by Tehran across the Gulf region. Iran’s Islamic Revolutionary Guard Corps carried out attacks on Bahrain, Kuwait, and Jordan — three states seen as aligned with or permissive of the US-led operation. The UAE, despite its direct participation in strikes on Iran, escaped similar retaliation — a gap that now has a reported financial explanation. The IRGC remains designated as a terrorist organisation by the United States, making any formal financial dealings with its officials legally fraught for third parties.
What Happens Next
The US and Iran appear to be on the cusp of striking a 60-day memorandum of understanding to negotiate over the Strait of Hormuz and Iran’s nuclear programme. If formalised, that framework would provide a broader diplomatic structure within which the UAE-Iran financial arrangement could be consolidated. Reuters has not reported a timeline for the remaining instalments of the reported $10–20 billion agreement. The IRGC’s participation in the Abu Dhabi talks — and its officials’ stay at a UAE government guest house — will likely draw scrutiny from US lawmakers monitoring Gulf compliance with existing Iran sanctions.
