WASHINGTON: US Treasury Secretary Scott Bessent said on Wednesday that a number of allies in the Gulf region and in Asia have asked the US for currency swap lines to help deal with energy shocks and other fallout from the war in the Middle East.
Bessent told US senators that both the United States and the United Arab Emirates would benefit from a proposed trade line that President Donald Trump said he was considering on Tuesday.
Bessent did not name the countries making such requests, but told a budget hearing of the US Senate Appropriations Subcommittee that such facilities would help stabilize financial markets amid the turmoil of the Iran war.
“And swap lines, whether from the Federal Reserve or the Treasury Department, are to maintain order in the dollar funding markets and prevent the sale of U.S. assets in a disorderly manner,” Bessent said. “So the barter line would benefit both the UAE and the US, and as I said, several other countries, including some of our Asian allies, have also requested them.”
The U.S. Treasury last October provided Argentina with a $20 billion currency swap to help stabilize the country’s peso during a tumultuous election period that helped strengthen the position of President Javier Milei’s party.
The swap line, backed by the Treasury Department’s $219 billion Exchange Stabilization Fund, gave Argentina a safety net of dollars that the central bank could use to prop up the value of the peso and prevent a devaluation ahead of the vote. It has since been refunded.
Requests for Russian oil
Bessent also said he extended sanctions on Russian seaborne oil for another 30 days at the request of a number of countries most vulnerable to oil shortages from the closed Strait of Hormuz.
The requests came during last week’s International Monetary Fund and World Bank spring meetings, he said.
The action reversed his comments last week that he would not renew expiring sanctions waivers. A separate waiver to allow countries to buy Iranian oil stranded at sea lapsed on April 19.
Bessent said estimates that Iran has received more than $14 billion in aid are “a myth,” but he did not provide an alternative figure.
Both waivers allowed the Treasury Department to supply the market with about 250 million barrels of oil stored in tankers, which helped bring down prices, Bessent said.
Asian economies in particular have been struggling with a shortage of physical oil supplies from the Gulf region since early March after the US and Israel launched strikes.
He said that for benchmark oil prices of $100 per barrel, “if we hadn’t done that easing of sanctions, they could have been at 150.”
