WASHINGTON: US Treasury Secretary Scott Bessent said on Wednesday that a number of allies in the Gulf region and Asia have requested currency swap lines from the United States to help it deal with energy shocks and other consequences of the war in the Middle East.
Bessent told U.S. senators that the United States and the United Arab Emirates would benefit from a proposed trade line that President Donald Trump said Tuesday he was considering.
Bessent did not name the countries that have made such requests, but told a budget hearing of the U.S. Senate Appropriations Subcommittee that such facilities would help stabilize financial markets amid turmoil caused by the war in Iran.
“And swap lines, whether from the Federal Reserve or the Treasury, are intended to maintain order in dollar funding markets and prevent disorderly selling of U.S. assets,” Bessent said. “So the trade line would benefit both the UAE and the United States, and as I said, many other countries, including some of our Asian allies, have also requested it.”
Last October, the U.S. Treasury 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.
That swap line, backed by the Treasury’s $219 billion Foreign Exchange Stabilization Fund, provided Argentina with a dollar safety net that the central bank could use to help prop up the value of the peso and prevent a devaluation before the vote. It has since been refunded.
Russian oil demands
Bessent also said he had extended sanctions relief on Russian maritime oil for another 30 days, following requests from a number of countries most vulnerable to shortages of oil from the closed Strait of Hormuz.
The demands were made last week at the spring meetings of the International Monetary Fund and the World Bank, he said.
The action reversed his comments last week that he would not renew expiring sanctions waivers. A separate waiver allowing countries to buy Iranian oil stuck at sea lapsed on April 19.
Bessent said estimates that Iran earned more than $14 billion from the aid were “a myth,” but he did not provide another figure.
The two waivers allowed the Treasury to supply the market with some 250 million barrels of oil stored in tankers, helping to drive down prices, Bessent said.
Asian economies, in particular, have been grappling with a lack of physical oil supplies from the Gulf region since early March, after the launch of US and Israeli strikes.
He said that for benchmark oil prices of $100 a barrel, “if we hadn’t eased sanctions, they could have been at 150.”
