WASHINGTON (Realist English). Against the backdrop of escalating military action in the Persian Gulf, the administration of Donald Trump is considering using frozen Iranian assets to compensate US allies in the region for damage inflicted by Iran. Reuters reports this, citing informed sources.
The initiative, which would redirect funds without Tehran’s consent, threatens to completely undermine an already shaky ceasefire between Washington and Tehran.
How the US Plans to Compensate Allies for Iranian Attacks
According to a source familiar with the discussions, US Treasury Secretary Scott Bessent has authorized his team to assess the scale of damage caused by Iran to the infrastructure of Middle Eastern partners.
The fundamental difference of the new approach is that it would allow reconstruction and repair work to be funded without Tehran’s prior approval. As a senior administration official told the Financial Times, “the Treasury is using all available tools to make Iranian assets available to our Gulf allies to support reconstruction and repair of any future damage caused by Iran.”
The department is also considering using these funds to compensate for past damage, including the consequences of years of attacks by Tehran or its proxies against the energy infrastructure of the Arab monarchies. Such a scheme would not only support those affected but also deliver a powerful financial blow to the Iranian economy, which is counting on the unfreezing of its assets.
Scale of Assets and Architecture of Interests
The funds in question are those that have become inaccessible due to US sanctions. According to expert estimates, the total amount of frozen Iranian assets worldwide is about $100 billion; in one interview, the head of the US delegation at the forum put the figure at $120 billion.
They mainly consist of oil export revenues accumulated in accounts in various countries. The largest pools of such funds as of the beginning of the month were in China ($15 billion in oil revenues), Iraq ($15 billion), Qatar ($6 billion) and Oman ($1 billion).
The US establishment is well aware that these reserves are critically important for Tehran given its acute budget deficit and the need to rebuild damaged infrastructure. That is why Washington is betting on intercepting them, seeking to deprive the Iranian regime of its main source of foreign currency while simultaneously demonstrating loyalty to Arab allies that have suffered from the war.
Trump’s Ultimatum and Uncertainty
Although the initiative comes from the US Treasury, its political significance can hardly be overstated. Experts are already warning that the announced plan could signal to Tehran that the US side has decided to go on the offensive on the economic front, making frozen reserves a permanent bargaining chip.
At present, neither the White House nor the Treasury Department has officially commented on the mechanism and sources of payments, nor on the list of countries that could qualify for compensation.
Nevertheless, the very fact that such information has leaked to leading global media (including Reuters, Bloomberg, the FT, ABC News and CNN) indicates that the administration is already actively working on this scenario.
Thus, Washington is sending an unmistakable hint to the Iranian leadership: either you make serious concessions on key issues (the nuclear program, regional influence, the fate of frozen assets), or you risk losing your reserves entirely.
Escalation After Strikes on Kuwait and Bahrain
The idea of redirecting Iranian assets arose against the backdrop of a new escalation in the Persian Gulf. The most recent attack, which occurred on June 5, played a role: Iranian forces struck US bases in Kuwait and Bahrain. In Kuwait, air raid sirens sounded five times overnight, and at least seven ballistic missiles were recorded flying over residential areas.
The kingdom’s authorities reported that air defenses worked normally and there were no casualties, but material damage was significant. Air raid alerts were also declared in Bahrain, and residents were told to take shelter.
The attack was preceded by a series of battles for control of the strategic Strait of Hormuz. US Central Command confirmed that its forces had shot down several Iranian attack drones that posed an “immediate threat to regional maritime traffic.” In response, aircraft struck Iranian ground radar stations on Qeshm Island and in the Goruk area.
All this is happening against the backdrop of complex negotiation processes mediated by Pakistan. Another round of consultations was expected in the coming days, but the mutual shelling has set the process back.
On June 6, a Pakistani delegation headed by the interior minister visited Tehran to deliver a new message to Iran’s Supreme Leader Ayatollah Mojtaba Khamenei, but again no concrete agreements were reached.
Iran’s Response: Demands for $24 Billion and Warning of a “Dark Corridor”
Against this background, Tehran has in turn firmly stated its position: Supreme Leader’s military adviser Mohsen Rezaei made it clear in a CNN interview that progress in negotiations is impossible without the release of $24 billion in frozen Iranian assets.
The arrangement acceptable to the Iranian side would see Tehran receive $12 billion immediately after the signing of an interim agreement and the remaining half within the next two months.
At the same time, Rezaei warned that if the US decides on a new strike, Tehran will immediately move military operations far beyond the Persian Gulf. According to him, Iranian forces are capable of hitting targets in the Indian Ocean, near the Bab el-Mandeb Strait, the Red Sea and even the Mediterranean Sea.
In summary, he stressed that any attempt at an American invasion would lead Washington into the “dark corridor” of inevitable defeat.
Differences Among Allies and Other Demands
At the same time, the positions of other members of the anti‑Iran coalition have become clearer. According to Israeli sources, Tel Aviv continues to insist that the negotiation agenda include the complete dismantling of Iran’s nuclear infrastructure, the removal of its enriched uranium stockpiles and a revision of the military doctrine of the Islamic Revolutionary Guard Corps.
Israel’s demands are supported by the US, but there is no unity among the Gulf Arab states: Saudi Arabia and the UAE fear further destabilization and lean toward a “freeze” of the status quo, while Bahrain and Kuwait, which have suffered most from Iranian attacks, demand security guarantees and compensation for damages.
Risks for the Ceasefire
Thus, the status of frozen Iranian assets is becoming a key point of contention around which US‑Iranian relations are structured. The White House refuses to give Tehran “pallets of cash” as it did under the Obama administration, rightly fearing that an injection of $100 billion would only strengthen the ayatollahs’ regime and allow it to continue its aggressive foreign policy.
Instead, the Americans propose to use these funds to rebuild the infrastructure of Arab allies that have borne the brunt of Iranian retaliation.
For Tehran, however, such a plan is a double blow: Iran simultaneously loses access to its own assets and sees them go toward rebuilding countries that are part of the military coalition against it.
The situation surrounding frozen Iranian assets is becoming a litmus test for the long‑term prospects of the US‑Iran confrontation. The Trump administration has bet on economic strangulation: unable to end the war quickly, Washington intends to cut off Tehran’s access to financial resources while simultaneously channeling them to support its Arab allies. In turn, Tehran, realizing that its reserves are shrinking by the day, is setting tough preconditions for continuing dialogue.
The fate of the ceasefire now depends on which side is willing to make concessions first. However, the current exchange of threats and mutual strikes makes the prospect of a swift peace increasingly illusory.
