UAE banks squeeze Iranian goodies

Strategy Page

In the United Arab Emirates (UAE), where much of Iran's foreign trade is handled, local banks are refusing to do business with the 10,000 Iranian trading firms based there. This has caused delays and cancellations of Iranian imports (over $9 billion worth from the UAE last year) and exports. This is being felt by the rule elite in Iran. There, the large extended families of the clerical leadership live the good life, and the goodies come in via the UAE. The sudden shortages of iPods, flat screen TVs, automobiles and bling in general, has been noticed in Iran, and is not appreciated.

The falling price of oil is producing another problem, national bankruptcy.

The problems would seem to be directly connected. If the UAE banks fear that the Iranian traders will be unable to repay loans due to a high risk of national Iranian bankruptcy, that gives them good reason to cut off the Iranian trading companies.