UAE Exports to Iraq Fall 25% in First Half as Iran War Hits Re-Export Trade

Re-exports accounted for much of the drop. These are goods brought into the UAE and shipped on to Iraq, including vehicles, electronics and machinery, and they fell by a third, according to the figures.

Experts told AGBI that a large share of the UAE's re-exports to Iraq start in Dubai, the region's main non-oil trading centre. Dubai has been hit repeatedly by Iranian drones and missiles during Tehran's conflict with the United States.

"The UAE is a key gateway for Iraqi supply chains, and any disruption there affects the availability of goods, their prices and delivery times, especially after the disruption of regional shipping," Manar Al-Obaidi, manager of the Iraqi think tank Iraq Future, told AGBI.

Iraq is one of the region's largest consumer markets. It has long imported heavily from Turkey, which offers proximity, relatively cheap goods and close political and economic ties. That makes Turkey a ready alternative supplier if UAE routes stay disrupted.

Why It Matters

Re-exports are central to Dubai's trading model, and Iraq is one of its most important nearby markets. A sustained loss of that trade would affect logistics operators, distributors and free-zone companies that serve Iraqi buyers, and could push Iraqi importers toward overland routes through Turkey. The figures also show that the war's economic damage to the UAE goes beyond energy and shipping insurance into its non-oil trade.

The decline is unusual for the UAE, whose overall non-oil trade has kept growing. Earlier this week the country reported that non-oil trade with Organisation of Islamic Cooperation member states rose 20.2% to $194.8 billion in the first half. That suggests the problem lies in particular routes rather than in demand for UAE trade overall.