- UAE warns prolonged Middle East war could push oil trade away from US dollar.
- UAE explores yuan or swap line amid dollar liquidity concerns and conflict risk.
- Iran already uses Bitcoin and yuan for Strait of Hormuz oil transit fees.
The United Arab Emirates has raised concerns with the United States over a potential dollar shortage if the Middle East conflict drags on. It warns that it could turn to alternative currencies, such as the Chinese yuan, for oil transactions.
At the same time, Iran is already moving in that direction. It accepts Bitcoin and other currencies for shipping access through the Strait of Hormuz.
UAE Seeks Financial Lifeline From the US
According to a Wall Street Journal report, UAE officials recently held talks in Washington with Treasury Secretary Scott Bessent and other US financial authorities. The discussions focused on the possibility of a currency swap line, a mechanism that would allow the UAE to access US dollars quickly if liquidity dries up.
The proposal is still at an early stage. UAE Central Bank Governor Khaled Mohamed Balama described it as a precautionary measure rather than an urgent request. However, the message behind the talks is that the country is preparing for a worst-case scenario.
The UAE has so far avoided the most severe economic damage from the conflict. But officials warned that prolonged disruptions could weaken its position as a global financial hub, drain foreign reserves, and scare away investors.
Oil Exports and Dollar Flows Under Pressure
A major concern is the disruption to oil exports. The conflict has damaged parts of the UAE’s oil and gas infrastructure and limited tanker movement through the Strait of Hormuz.
This has reduced the country’s ability to earn dollars, which are central to global oil transactions. The UAE dirham is also pegged to the US dollar, making steady access to the US dollar critical for maintaining economic stability.
Officials warned that if dollar access becomes constrained, the UAE may be forced to conduct oil sales and other transactions in alternative currencies such as the Chinese yuan. Such a move would challenge the long-standing dominance of the US dollar in global oil markets.
Limits to US Support
Despite the discussions, approval of a swap line is uncertain. The US Federal Reserve typically reserves such arrangements for countries with deep financial ties to the US or during severe global crises.
While the US Treasury has provided alternative support in the past, such as a $20 billion swap arrangement for Argentina, there is no guarantee the UAE would receive similar treatment.
Meanwhile, Gulf nations are already taking steps to strengthen liquidity. Abu Dhabi recently raised about $4 billion from investors, while Bahrain secured a $5 billion swap line with the UAE.
Iran Turns to Bitcoin and Yuan for Oil Transit
While the UAE is preparing for potential currency shifts, Iran has already implemented one.
Since mid-March 2026, Iran’s Islamic Revolutionary Guard Corps has been charging vessels up to $2 million to pass through the Strait of Hormuz. Payments are accepted in Chinese yuan and Bitcoin.
The system was formally approved at the end of March under a new “Strait of Hormuz Management Plan.”
Fees are roughly $0.50 to $1 per barrel, meaning a fully loaded supertanker carrying around 2 million barrels could pay close to $2 million per transit. Ship operators are required to submit cargo details, after which they are given a short window to pay, often in Bitcoin.
Related: Iran Restricts Hormuz Again as Trump Maintains Blockade
Crypto Emerges as a Strategic Tool
Iran’s use of cryptocurrency highlights a growing shift in global finance under geopolitical pressure. By accepting Bitcoin and other digital assets, Iran can bypass traditional dollar-based systems and Western sanctions.
The country’s crypto ecosystem has expanded rapidly, reaching an estimated $7.8 billion in 2025. Activity linked to the IRGC alone has reportedly handled billions of dollars in transactions.
Bitcoin offers censorship resistance, while stablecoins provide price stability. Both serve as alternatives to the US dollar.
Shift in Global Finance
The developments highlight how geopolitical tensions are accelerating moves away from dollar dominance.
The UAE’s warning about switching currencies, combined with Iran’s active use of Bitcoin and yuan, shows how quickly global financial systems can adapt under pressure. If the conflict continues, more countries could explore alternatives, reshaping not just oil markets but also the role of the US dollar in global trade.
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