Jakarta. The Iran war — which is now on a fragile ceasefire — does not erode the confidence the United Arab Emirates (UAE) has in the $10 billion annual bilateral trade ambition with Indonesia.

Talks are even underway to raise the target by almost fourfold, according to an Emirati diplomat. Indonesia and the UAE agreed to beef up yearly bilateral trade to $10 billion. They already forged a tariff-slashing free trade agreement, which could have given the much-needed boost for export-import activities. However, the Iran war has upended global trade, even more so with the blockade of the strategic Strait of Hormuz. The narrow waterway handles crude and product exports from Gulf nations, including the UAE.

The Jakarta Globe asked UAE Ambassador to Indonesia Abdulla Salem AlDhaheri whether the fighting had repercussions for the $10-billion-target. For Abu Dhabi, trade with Jakarta is limitless.

“We have already seen what is in the pipeline. We are already discussing somewhere within the range of $36 billion. And now you are talking about only $10 billion,” AlDhaheri told a press briefing in Jakarta on Wednesday evening.

“The sky is the limit.”

The UAE had been a target of Iranian rockets, as the country claimed to have detected and intercepted nearly 2,800 missiles and drones. Tehran has been targeting Gulf Arab states that host the US military bases. AlDhaheri warned that the conflict — which the diplomat said had morphed from a regional issue into a “global concern” — had caused shipping costs and energy prices to skyrocket. 

“Indonesia is not immune. … It is directly impacted through higher fuel prices, increased costs of goods, and supply chain disruptions.”

Indonesia’s trade with the UAE has been on a positive trajectory. Bilateral trade soared from $5 billion in 2024 to $6.4 billion the following year. In January-February 2026, trade rose to $1.5 billion, marking an almost 100% growth year-on-year (yoy) from $751.7 million. Indonesia’s surplus, however, shrank from $155.8 million to $22.2 million, the Trade Ministry data showed. A free trade agreement that aims to gradually eliminate virtually all import duties came into effect in September 2023.

The fighting began after the US and Israel launched airstrikes on Tehran in late February. Iran retaliated by firing rockets at its Gulf neighbors and Israel. Iran recently clinched a last-minute ceasefire deal with Washington, although doubts loom whether the truce can really hold. The Strait of Hormuz also remains largely blocked. The UAE remains hopeful that the ceasefire can result in regional stability.

"We need to see the Strait of Hormuz moving. We don't want to see any disruptions of supply chains and price hikes. ... Disruptions will only take us backwards," AlDhaheri said.

Read More: Indonesia Wants Its Ships to Freely Navigate Hormuz Amid Fragile Iran Ceasefire

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