The United Arab Emirates is currently mulling a freeze on Iranian assets worth billions of dollars after the Gulf region was hit by Iran’s missiles in the aftermath of Ali Khamenei’s assassination, The Wall Street Journal reports.

Iran launched missiles that damaged the UAE’s Dubai airport, parts of the Burj Al Arab hotel and the Palm Jumeirah artificial island, leaving a trail of chaos for a region known for its serenity and appeal to tourists.

The war has left tourists scared and stranded, with the government offering to cover hotel costs for those forced to extend their stays.

Iran’s economy, already battling raging inflation, will worsen should Emirati officials restrict Tehran’s access to foreign currency running into billions of dollars, according to  the publication.

Iranian government institutions have often circumvented Western financial sanctions by holding assets in the UAE, a financial haven for global players seeking to bypass official banking channels.

Tehran has also used oil sale proceeds held abroad to fund its arsenal and regional proxies without the red tape of formal bank bureaucracy.

The report said the UAE would target accounts linked to the Islamic Revolutionary Guard Corps in the intended financial crackdown aimed at choking the Iranian economy and its shadow-financing network.

Iran has created several front companies in the UAE, which mainly conduct its clandestine oil transactions and obfuscate the source of the funds. The publication cited data from The Treasury and analysts who monitor Tehran’s operations.

It reported that Emirati authorities were weighing the pros and cons of the asset freeze, particularly that Iran might retaliate with further kinetic attacks against its infrastructure.

Another concern is that such a move could erode trust among some UAE partners, including Russia, which has also been accused of conducting backdoor financial transactions through the Gulf state.

“This is the most important non-military lever the UAE have to play against the Iranians,” Andreas Krieg, a security studies expert, said.