Can US pressure stem cash flows to Iran?

Vessels in the Strait of Hormuz are visible near the beach of Bandar Abbas, Iran. Majid Asgaripour/WANA via REUTERS Purchase Licensing Rights , opens new tab Aug 26 - With temperatures hovering between 45 and 50 degrees Celsius this week, many in the Gulf are looking for signs that relief is on the way. T he Suhail season has officially begun – the annual sighting of the star that traditionally heralds the slow retreat of peak summer heat. But with humidity levels running at 80-90% overnight and in the early mornings along the Gulf ​coast, the star reportedly couldn't even be spotted through the UAE's haze. It's a fitting metaphor for the regional security situation right now — change may be coming, but it's ‌murky, gradual, and hard to pin down. Slow, uncertain movement defines this week's negotiations over the Strait of Hormuz, where Iran and Oman seem to be inching toward a temporary navigational corridor after nearly six months of blockade. Washington, meanwhile, is showing its own tentative signs of de-escalation, quietly returning diplomatic staff to embassies across the Middle East. Below, we break down what these shifting signals mean for the region's economy and security — from Riyadh's nuclear ambitions to Dubai's battered aviation sector — ​and take a deep dive into the shadow-banking networks that might be keeping Iran's economy afloat despite U.S. plans for economic isolation. NEWS BRIEFING Trump has sent Congress a proposed deal with Saudi Arabia ​on civil nuclear energy , insisting it will only take effect if Riyadh normalizes ties with Israel. Congress has 90 session days to review the pact, which ⁠would let Riyadh build AP1000 reactors. Critics say the deal lacks nonproliferation safeguards barring uranium enrichment. Dubai International Airport's passenger traffic fell 31.3% in the first half of 2026 to 31.5 million, as the Iran war ​disrupted Gulf travel, operator Dubai Airports said. Major carriers like Lufthansa and British Airways remain cautious and have suspended routes in the region, though Emirates is flying at 90% capacity. Before the war, DXB ​had forecast nearly 100 million passengers this year. The Trump administration is returning staff to Middle East embassies evacuated during the Iran war , including in Lebanon, Israel, Saudi Arabia and Iraq, sources said. Some posts will initially cap staffing at 85%. The move signals lower near-term escalation risk, though the Strait of Hormuz remains shut and diplomacy seems stalled. CAN WASHINGTON CLOSE IRAN’S FINANCIAL BACK DOORS? At the event on Monday launching the U.S. effort to boost sanctions against Iran and its trade ​partners called “Operation Economic Outcast”, U.S. Treasury Secretary Scott Bessent singled out the UAE for praise: "The UAE have been very good partners and have taken the brunt of the Iranian attacks in the Gulf." The compliment ​came days after Abu Dhabi announced a halt to all trade, commercial exchange and financial transactions with Iran. The UAE is one of Iran’s largest commercial partners, ranking second only to China. The move looked bold, but the deeper ‌problem may lie ⁠untouched: a shadow-banking architecture that Washington’s own investigators have spent years mapping. An October 2025 report by the U.S. Treasury's Financial Crimes Enforcement Network quantified the scale: Iranian shadow-banking networks span continents — most prominently the UAE, Hong Kong, and Singapore — through a web of front companies. A Reuters investigation published last month showed how this works in practice, identifying Dubai-based exchange Shelbit as the hub of a $4 billion Iranian sanctions-evasion scheme, moving crypto tied to Iran’s central bank and Revolutionary Guards-linked addresses. Treasury sanctioned the exchange’s founder only after that reporting emerged. The UAE’s foreign ministry said in a statement to Reuters at the time that it “adheres to the ​highest international standards, maintains strict oversight across all sectors, ​and works closely with international partners to ⁠disrupt and deter all forms of illicit financial flows.” The UAE's new ban may have a critical gap: it covers direct dealings but leaves unclear whether it reaches money routed through third countries on the kind of pathways the U.S. Treasury has mapped. The new American rules appear to offer no fix for that ​gap – Bessent issued only vague warnings, no timeline for penalties, and no naming of countries in focus. The question is now whether Washington will ​press Gulf regulators on beneficial ⁠ownership and third-country shell networks or treat headline embargoes like the UAE’s as sufficient – leaving Iran’s financial lung open regardless. LAST WAVE: QATARI GAS STRANDED Six months into the U.S.-Iran war, Qatar has emerged as one of the conflict's biggest economic casualties , with its liquefied natural gas exports down 96%, according to Reuters data. Saudi Arabia, the UAE, Iraq and Kuwait have seen their oil exports hit, but by nowhere near as much. Qatar has lost $24 billion ⁠in gas sales, ​about five months' worth of income for the country, based on 2025 data. While neighbouring Gulf exporters have managed to ​sneak oil out of the Strait of Hormuz, Qatar has exported just 18 LNG cargoes, down from 509 in the same period last year, according to data intelligence firm ICIS. Two tankers have been attacked. Before the war, Qatar supplied about one-fifth of ​the world's LNG, and U.S. exports have offset some of the lost supply. Still, European gas storage has fallen to a historic low for the time of year, raising winter price-spike risks. Editing by Aidan Lewis Our Standards: The Thomson Reuters Trust Principles. , opens new tab Suggested Topics: Middle East X Facebook Linkedin Email Link Purchase Licensing Rights