The acceptance of an official visit to Tehran by the UAE Vice-President and Prime Minister and Dubai Ruler Sheikh Mohammed bin Rashid al-Maktoum comes as a sign of thawing relations between the two countries.

The emirate of Dubai has historically held strong trade links with Iran and is a major re-exporter of goods to the Islamic Republic. In contrast, Abu Dhabi, the UAE’s capital, most powerful emirate and a staunch US ally, has had a strained relationship with Iran.

Iran and the UAE have long disagreed on the occupancy of three islands in the Gulf, with the UAE accusing the Islamic Republic of illegally occupying the territories. While there have been reports of an historic agreement on the disputed islands in the pipeline, it is unclear whether there is any real possibility of a transfer of ownership.

But Sheikh Mohammed has shown signs that he is willing to break the diplomatic standoff. In an interview with the BBC in January, he said he supports lifting the international sanctions against Iran’s financial and energy sectors. If Dubai’s ruler goes ahead with his plan to visit Tehran, it will represent a long-term high in relations between the two countries and could help pave the way for a revival in trade ties.

However, renewed cooperation with Tehran would put the UAE at odds with GCC powerhouse Saudi Arabia, which considers Iran its main rival for political influence in the Gulf.