The United Arab Emirates has requested financial assurances from Washington in the form of a dollar swap line, threatening to shift to Chinese yuan for oil trade settlements if its request is denied. Abu Dhabi aims to protect its national economy from liquidity shortages caused by the protracted military conflict with Iran and the risk of depleting its foreign currency reserves.

UAE Central Bank Governor Khaled Mohamed Balama proposed that US Treasury Secretary Scott Bessen establish an emergency credit line to prevent investor flight from the region. Emirati officials warned their American counterparts of their readiness to switch export transactions to Chinese yuan if the available volumes of US currency face critical reductions. Meanwhile, Federal Reserve officials have expressed skepticism about the need for such a facility, citing a lack of systemic risks to the US financial system.

The UAE’s national currency remains pegged to the US dollar, supported by reserves of $270 billion. However, frequent attacks on infrastructure pose a long-term stability threat. The UAE Ministry of Defense has reported more than 2,800 launches of Iranian missiles and drones targeting Gulf states since the escalation began. To address its funding shortfalls, Abu Dhabi has already raised $4 billion through a bond issuance facilitated by Goldman Sachs.

During a meeting with the IMF, Saudi Finance Minister Mohammed Al-Jadaan ruled out a quick recovery for the regional energy sector. It would take time to restore normal oil logistics, at least until the end of June, Al-Jadaan noted. The significant supply shock and geopolitical uncertainty are pushing major oil exporters to seek new mechanisms to protect their assets and diversify currency risks.