Iran’s frozen assets worth up to $100 billion
A key issue in the recent peace agreement between the United States and Iran concerns Iran’s frozen assets. Iran has long been trying to gain access to funds, most of which are out of reach due to sanctions and banking restrictions. Although most of these assets are not located in the United States, the United States plays a key role in determining whether Iran will be able to access them. Exactly how much of this money is there, and how easily can Iran access it? There is no official figure available on the total value of Iran’s frozen assets.
However, various estimates suggest the amount could range between $27 billion and $100 billion. This includes oil revenue, revenue from oil, gas, and electricity exports, foreign exchange reserves held in foreign banks, and assets embroiled in legal disputes. When Iran exports oil abroad, payments are typically deposited in the banks of the buyer countries. But due to US sanctions, Iran is often unable to repatriate this money. As sanctions on Iran increased, more of its revenue ended up stuck in foreign accounts. According to Frederik Schneider, an economist at the Middle East Council on Global Affairs, Iran’s assets are restricted in several ways. These include formally frozen funds, revenue that cannot be repatriated, and assets embroiled in legal disputes.
The majority of Iran’s restricted funds are held outside the US. The largest portion is in China, Iran’s largest oil buyer. It is estimated that between $20 billion and $50 billion of Iran’s assets are stuck in China. The second-largest amount is held in Iraq, where Iran is estimated to have between $10 billion and $15 billion. According to US Congressional data, South Korea held approximately $6 billion in Iranian oil exports, which were transferred to Qatari accounts in 2023.
However, the US later indicated that Iran would not be able to access these funds in the near future and the amount would remain frozen for the time being. Iran also holds assets in several other countries, including India, Japan, and Luxembourg. According to estimates by Iranian officials and the U.S. Congressional Research Service, Iran’s restricted assets in India could be worth approximately $7 billion. Although most of the funds are outside the United States, the United States still exerts considerable influence over them. This is because U.S. sanctions apply not only to Iran but also to foreign banks, companies, and governments that conduct financial transactions with Iran.
Banks or financial institutions that facilitate any financial transactions with Iran risk losing access to the U.S. financial system or facing U.S. sanctions. This is why countries that hold Iranian funds are hesitant to release or transfer them without explicit U.S. approval. The Memorandum of Understanding between the US and Iran states that Iran may be granted some access to its frozen or restricted funds, giving Iran’s Central Bank greater authority to decide how these funds are used. The agreement also mentions a comprehensive reconstruction plan worth at least $300 billion.
This will work to rebuild and develop Iran’s economy in cooperation with regional partner countries. The implementation of this plan will be determined within the framework of the final agreement. The US has clarified that it will not directly transfer any cash to Iran. The Donald Trump administration states that this arrangement is completely different from the 2015 Iran nuclear deal, which was reached during the Barack Obama administration. Instead, the US will focus on investments in infrastructure, energy, transportation, and other sectors.
However, in practice, Iran’s access to these funds may still be limited. Esfandyar Batmanghelidj, founder of the UK-based think tank Bourse & Bazaar Foundation, says there are many complex challenges in implementing such arrangements. According to him, while Iran could use these funds within a particular country, transferring them internationally would still be extremely difficult. There is also uncertainty about whether the US will use some of Iran’s assets to compensate Gulf countries for war losses.
US Treasury Secretary Scott Bessent said in early June that war losses could be compensated from Iran’s frozen assets. However, Iran flatly rejected this suggestion. Iran’s Deputy Foreign Minister Kazem Gharibabadi said that Iran’s assets are not “war booty” for Washington nor are they a fund to cover the expenses of its allies.