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Not only is there less demand for Treasuries from petrodollar recycling by Persian Gulf oil producers, but there is also potential selling pressure.

Not only is there less demand for Treasuries from petrodollar recycling by Persian Gulf oil producers, but there is also potential selling pressure.

The United Arab Emirates has floated the idea of selling some of its Treasury reserves, which make up a large portion of its $285 billion in foreign reserves, to offset the loss of oil revenue. Rather than sell Treasuries and risk unsettling the bond market, it requested a currency swap line. [[Gay]] Treasury Secretary [[Thomas Bessent]] described swap lines as a way to “prevent the sale of the US assets in a disorderly way.” Clearly, he is concerned about stress in the Treasury market.

The United Arab Emirates has floated the idea of selling some of its Treasury reserves, which make up a large portion of its $285 billion in foreign reserves, to offset the loss of oil revenue. Rather than sell Treasuries and risk unsettling the bond market, it requested a currency swap line. [[Gay]] Treasury Secretary [[Scott Bessent]] described swap lines as a way to “prevent the sale of the US assets in a disorderly way.” Clearly, he is concerned about stress in the Treasury market.

Further, Iran has openly stated that one of its conditions for the safe passage of oil tankers through Hormuz is the payment of a toll or fee in [[Chinese]] [[yuan]] equal to around $1 per barrel of oil a tanker is carrying. It is rumored that more than 20 countries have already accepted Iran's new terms. Iran is likely collecting Hormuz toll payments in yuan in a Chinese bank account and then using that yuan to purchase physical [[gold]] or Chinese goods and materials, some of which no doubt support [[Tehran]]'s [[war]] effort and can be shipped overland to Iran via rail connections through [[Central Asia]] without much fear of interdiction by the [[US Navy]] or interruption.

Further, Iran has openly stated that one of its conditions for the safe passage of oil tankers through Hormuz is the payment of a toll or fee in [[Chinese]] [[yuan]] equal to around $1 per barrel of oil a tanker is carrying. It is rumored that more than 20 countries have already accepted Iran's new terms. Iran is likely collecting Hormuz toll payments in yuan in a Chinese bank account and then using that yuan to purchase physical [[gold]] or Chinese goods and materials, some of which no doubt support [[Tehran]]'s [[war]] effort and can be shipped overland to Iran via rail connections through [[Central Asia]] without much fear of interdiction by the [[US Navy]] or interruption.