In case tensions between the West and Iran might escalate into war, the emirate of Abu Dhabi might benefit from rising oil prices, while the trade-focused sheikhdom of Dubai is on the risk to face an economic setback, Citigroup's Chief Economist Middle East said Tuesday.

While Iran has frequently threatened to close the strategically important Strait of Hormuz, "we do not expect that the strait will be closed in case of a war," Dr. Farouk Soussa, Chief Economist Middle East at Citigroup in Dubai said in an interview with Xinhua.

"Oil prices will certainly rise sharply and we expect that the UAE capital sheikhdom Abu Dhabi, home of some seven percent of the world's oil reserves, would benefit," Soussa explained. Oil prices surged seven percent year-to-date due to fears of a war in the Gulf region.

Abu Dhabi's neighboring emirate Dubai, on the other hand, would suffer, as only about two percent of Dubai's GDP is based on oil while the bulk is based on trade, logistics and tourism. Dubai is based on confidence, and that confidence might be shaken if a war at its doorstep happened, he said.

At a two-day summit aimed at tackling nuclear proliferation and nuclear terrorism in Seoul, South Korea, U.S. President Barack Obama warned Iran and DPRK on Monday to reduce their 'atomic Dubai's ports are considered Iran's gateways to Western goods, and the sheikhdom has seen a significant decline in trade with Tehran since the U.S. and its allies have imposed new sanctions against Iran's central bank at the start of 2012.

The spillover effects from a possible Iran war on the UAE will be limited in relation to an oil price spike, Soussa forecasted, " but on most other sectors the effect will be slightly negative."