UAE turns to U.S for financial lifeline as Iran war shows no end – Report

The United Arab Emirates has begun preliminary talks with the U.S. about securing a potential financial safety net if the Iran war worsens its economy, Wall Street Journal (WSJ) reported today . Emirati officials discussed the idea of a dollar currency-swap line with U.S. Treasury and Federal Reserve leaders, stressing it is a precaution rather than a formal request , the WSJ reported .

The concern stems from war-related damage to oil infrastructure and disruptions in tanker routes through the Strait of Hormuz, which threaten the UAE’s key source of dollar revenue and its status as a global financial hub. Officials warned that in a severe dollar shortage, the UAE might turn to alternative currencies like China’s yuan—posing a potential challenge to the U.S. dollar’s dominance in global oil trade, the report further added. .

While the UAE still has strong reserves and economic buffers, risks include capital flight, market volatility, and prolonged export disruptions. The Federal Reserve is seen as unlikely to approve a swap line, though the U.S. Treasury could consider alternatives, the WSJ report states.