United States Treasury

The UAE's central bank governor pitched a currency swap arrangement with Treasury Secretary Bessent and Fed officials in Washington, framing it as insurance against worst-case scenarios rather than an immediate bailout. The Strait of Hormuz closure has hammered the country's dollar revenue streams from oil exports, forcing Abu Dhabi to raise $10 billion through private bond placements last month. UAE officials warned they could be forced to use yuan for oil sales if facing dollar shortages, threatening the petrodollar system's stability. Trump indicated Washington was considering the arrangement, which would mark a notable departure from the Fed's traditionally selective swap line policy.

Treasury sanctioned Hengli Petrochemical's Dalian refinery plus 40 shipping companies as part of Trump's 'Economic Fury' campaign to choke off Iran's oil revenue. The move targets one of Iran's largest customers, which bought billions of dollars worth of Iranian crude alongside other Chinese 'teapot' refiners that represent a quarter of China's refinery capacity. China criticized the US for 'abusing' unilateral sanctions, but smaller teapots have limited US financial exposure and may prove somewhat immune. The bigger risk is forcing these marginal operators to close entirely, potentially disrupting a quarter of China's refining capacity and hurting local Shandong communities dependent on the facilities.