Oil producers in the Middle East would typically rejoice at oil prices of $100 per barrel as they would see windfall revenues from their exports. But since the Iran war trapped most oil and gas shipments at the Strait of Hormuz, the Gulf economies have lost billions of dollars in oil revenues and haven\u2019t seen any upside from the oil price spike.<\/p>\n
The United Arab Emirates, one of the richest Gulf countries, hasn\u2019t been spared from crashing revenues from oil, and tourism, too, as airlines have cut routes to avoid the war zone, which the entire Middle East has been for eight weeks.<\/p>\n
The Trump Administration would help the UAE, one of its closest allies in the region, with liquidity via a currency swap line, if needed, various U.S. officials, including President Donald Trump, have signaled in recent days.<\/p>\n
The UAE has not formally requested any financial assistance and says<\/a> that \u201cAny suggestion that the UAE requires external financial backing misreads the facts.\u201d<\/p>\n Yet, a White House official told CNBC<\/a> that a currency swap, aimed at boosting the U.S. dollar liquidity in the UAE, is \u201csomething we\u2019re thinking about considering.\u201d Related: Japan\u2019s Japex To Quadruple Oil and Gas Production, Eyes U.S. Expansion<\/a><\/p>\n There isn\u2019t any official consideration in Washington and no official request from the UAE, either, but the Trump Administration signals it is ready to help if necessary.<\/p>\n \u201cIf I could help them, I would,\u201d President Trump told CNBC\u2019s \u201cSquawk Box\u201d on Tuesday.<\/p>\n \u201cIt\u2019s been a good country. It\u2019s been a good ally of ours,\u201d the President added.<\/p>\n Reports emerged earlier this week that the UAE has informally raised the idea with senior U.S. officials.<\/p>\n UAE\u2019s Central Bank Governor, Khaled Mohamed Balama, raised the idea of a currency-swap line with U.S. Treasury Secretary Scott Bessent and Treasury and Federal Reserve officials in meetings in Washington last week, the Wall Street Journal reported<\/a> this week, quoting U.S. officials.<\/p>\n The idea has been only pitched as a preliminary and precautionary idea of potential moves, according to the officials who spoke to the Journal.<\/p>\n The UAE on Tuesday dismissed talk that it is in need of financial assistance.<\/p>\n Yousef Al Otaiba, UAE Ambassador to the United States, said<\/a> that \u201cAny suggestion that the UAE requires external financial backing misreads the facts.\u201d<\/p>\n \u201cThe UAE is one of the world\u2019s most financially resilient economies, underpinned by more than $2T in sovereign investment assets, more than $300 billion in foreign currency reserves held by the UAE’s central bank, and a banking sector with approximately $1.5 trillion in deposits,\u201d a statement by Al Otaiba on X says.<\/p>\n Any financial assistance by the U.S. Administration to one of the richest petrostates would not sit well with Trump\u2019s political base at home, as the President would be effectively helping fund a foreign country while U.S. gasoline prices surge to over $4 per gallon.<\/p>\n The UAE may not need any aid at all, but it has been hit \u2013 directly \u2013 by the Middle East war, which has crashed the Gulf petrostates\u2019 oil revenues and damaged energy assets that would need billions of dollars and months, and even years, to repair.<\/p>\n The UAE last month suspended operations<\/a> at a key natural gas field in Abu Dhabi, the Shah gas plant, following the first direct attack on a producing field in the country.<\/p>\n The Shah gas field is operated by\u00a0ADNOC Sour Gas<\/a>, a joint venture between Abu Dhabi\u2019s national oil company ADNOC with 60%, and U.S. firm Occidental Petroleum, which holds a 40% share. The Shah gas plant accounts for about 20% of the UAE\u2019s total gas supply and 5% of the world’s granulated sulfur.<\/p>\n The missed oil and gas revenues for the Gulf producers have been piling up over the past eight weeks.<\/p>\n Two weeks into the war, oil producers in the Arab Gulf were estimated to have already lost at least $15.1 billion<\/a> in oil and gas revenues.<\/p>\n At the end of week seven, the world had already lost 500 million barrels of oil supply, equal to around $50 billion<\/a> of oil revenues at an average price of $100 per barrel, around which futures prices have been hovering since February 28.<\/p>\n By Tsvetana Paraskova for Oilprice.com<\/p>\n