STRUGGLE IN THE STRAIT: Iran, UAE reopen talks after six years as business hub feels the heat

STRUGGLE IN THE STRAIT: Iran, UAE reopen talks after six years as business hub feels the heat
Night pass by International Space Station. Nasa astronaut Tim Kopra tweeted this image with the message: "Passing over the Gulf of #Oman at night -- city lights of #Muscat #Dubai #AbuDhabi and #Doha in the distance."
By bne IntelliNews July 30, 2019

Foes Iran and the United Arab Emirates (UAE) were set to reopen talks in Tehran put off since 2013 on July 30 in what appeared to be a bid to calm tensions in the Gulf.

Gulf officials were briefing news agencies that the meeting was merely a routine encounter that would deal with technical maritime issues but recent incidents related to what Iran sees as the US “economic war” on the Islamic Republic—including limpet mine attacks on oil tankers, the seizure of a UK-flagged tanker by Iranian commandos and the shooting down of a sophisticated US drone by Iran, followed by claims from Washington that its forces had shot down an Iranian drone—have unsettled the UAE, which would like to retain its reputation as a safe business hub.

Sunni Arab UAE, allied with Iran’s regional arch-foe Saudi Arabia which, in turn, is a strong backer of the Trump administration’s policy of strangling Shi’ite Iran’s economy with sanctions to force concessions on the country’s role in the Middle East, noticeably did not endorse the US and Saudi line that the attacks on tankers were the work of Iran while it has lately scaled back its military presence in Yemen, where the Saudis are involved in a proxy war with Iran.

Dubai loses Iran trade
Another aspect to the Gulf stand-off is economic losses suffered by Dubai—home to more than 40% of the combined population of the seven emirates—with Iranian reports suggesting its legal and and black market exports to Iran’s economy of 81mn people have fallen more than 70% since the US in May last year announced its aggressive sanctions regime aimed at Tehran. No other emirate has taken such a hit.

Relations between the city-state and Tehran were actually seen as generally good, but the more powerful and richer Emirate of Abu Dhabi and its ruling family forced the traditionally friendly trading port of Dubai to cut ties with Iran to produce a united front.

Much of the trade lost to Dubai has moved over to Oman. It has used the opportunity to become the biggest re-exporter of goods from around the world to Iran.

In a report on an announcement of the bilateral talks, Iran’s semi-official Students News Agency (ISNA) said: “The 6th joint meeting will be held on Tuesday between a visiting seven-member delegation from the United Arab Emirates’ coast guard and Iranian officials in Tehran.” The news service did not give a source, but said issues from shared borders, mutual visits by citizens of each nation, illegal entries, and maritime connections would be discussed.

A Gulf official was quoted by Reuters as saying “it is a technical meeting that was organised a long time ago to discuss routine maritime issues”.

Iran’s bids for better relations
Iran has several times in recent months made a point of saying it wants to improve relations with its regional rivals Saudi Arabia and the UAE, despite the economic aggression and incremental military expansion in the Gulf of the US, and the news agency also quoted an unnamed Iranian official, who said: “Iran has always given extreme importance to the security of the Persian Gulf and it needs cooperation among all Persian Gulf states.”

Since Iran seized the British-flagged Stena Impero oil tanker on July 19, nervousness over the security of the Strait of Hormuz—the world’s busiest chokepoint for shipped energy exports—has grown. Some hardliners in Iran have warned that if the US goes too far with its economic assault on Iran, such as via its attempt at driving all Iranian oil exports off world markets, Tehran might move to block all exports from passing through the strait.

July 30 also saw the US formally ask Germany to join France and Britain in a mission to secure the Strait of Hormuz and combat Iranian aggression, according to the US Embassy in Berlin.

“We’ve formally asked Germany to join France and the UK to help secure the Straits of Hormuz and combat Iranian aggression. Members of the German government have been clear that freedom of navigation should be protected... Our question is, protected by whom,” an embassy spokeswoman was quoted as saying by Germany’s DPA news agency.

However, there is substantial opposition among Germany’s Social Democrats (SPD), junior partners in conservative Chancellor Angela Merkel’s ruling coalition, to getting involved in a US-led mission to escort tankers.

Risk of being dragged into war”
“The German government has already rejected participation in the US military mission, Operation Sentinel, to protect Strait of Hormuz shipping,” Nils Schmid, a foreign affairs spokesman for the SPD parliamentary party, said in an interview with the Stuttgarter Zeitung. “Things should stay like that. Otherwise, there’s a risk of being dragged into a war against Iran on the side of the United States.”

BP, meanwhile, said on July 30 that it has not sent any of its oil tankers through the Strait of Hormuz since a July 10 attempt by Iran to seize one of its vessels. For now, the company added, BP would stick to shipping oil out of the region using chartered tankers.