US, Qatar explore release of $6 billion in frozen Iranian funds, claims report

The U.S. is coordinating with Qatar on a plan that could unlock billions of dollars in frozen Iranian assets for use in humanitarian needs, according to people familiar with the matter. The move is being described as an early financial component of a recently reached agreement aimed at ending the conflict, as reported by Wall Street Journal.

The plan, which isn’t yet completed, is aimed at giving Iran access to the spending power of some of its estimated $100 billion in cash frozen worldwide, beginning with $6 billion held in Qatar. Under the deal, Qatar would allow purchases of food, medicine and other humanitarian goods ordered by Iran’s central bank with money drawn from frozen Iranian assets, mainly cash from oil sales that has been locked up overseas by sanctions, the people said, as reported by WSJ.

The facility could provide a template for dealing with other pools of frozen Iranian cash around the world and a start on the first tranche of the $24 billion in blocked funds that Tehran wants released as soon as possible, some of the people said.

Iran still needs to agree to the mechanism. It is one of many ideas Washington is expected to raise over the next two months of nuclear discussions with Tehran following a deal to pause the war and reopen the Strait of Hormuz, the people said.

“Even limited asset releases function as both economic lifelines and political signals of de-escalation,” said Sanam Vakil, Middle East director at Chatham House, a London think tank, as reported by the Wall Street Journal.

“They are one of the few concrete incentives Iran can secure with Washington to stabilize its currency and ease domestic economic pressure.”

However, the situation remains uncertain, as Iranian Supreme Leader Mojtaba Khamenei stated on X on Thursday that U.S. President Donald Trump agreed to suspend hostilities “out of desperation,” suggesting that the decision reflected pressure rather than goodwill.

This appeared to prompt Trump to hit back with his own social-media post: “We didn’t meet out of desperation, Iran did. They are FINISHED! We’ll play out the 60 days. They get no money, not ten cents!”

Under the deal signed Wednesday by Trump, the U.S. is committed to making Iran’s frozen assets “fully available for use” and negotiating a mechanism for doing so. A U.S. official said this week the funds will flow as long as Iran is engaging productively in talks.

The arrangement with Qatar would be in addition to the billions of dollars Iran is expected to earn from oil sales, which Washington agreed to allow immediately upon signing the agreement on Wednesday. In both cases, the U.S. agreed to waive sanctions and issue authorisations as needed to facilitate the transactions.

Critics of the deal say it gives Iran big payoffs before requiring it to make concessions on its nuclear program. Vice President JD Vance and other defenders of the agreement say it will ease pressure on the global economy by opening the strategic waterway and head off further conflict while limiting Iran’s financial benefits until it makes progress on U.S. demands.

The arrangement under discussion with Qatar would give the U.S. more visibility over Iran’s purchases and more leverage over Tehran’s ability to keep using its frozen cash.

“We have taken their money, it isn’t our money, it is their money, and we froze it,” Trump told reporters Wednesday at the Group of Seven meeting in France. “At a certain point in time I guess we’re going to have to give it back.”

The money, which is largely from oil sales, is locked up by sanctions in countries like China, India, Iraq and Qatar.

In 2023, the Biden administration issued a sanctions waiver that allowed $6 billion in Iranian oil revenue to be transferred from South Korea, which had bought the oil, to Qatar as part of a deal for Iran to free five American citizens it was holding as prisoners. The funds were to be spent on humanitarian goods for Iran, but Biden froze them in Qatar after Iranian ally Hamas launched the Oct. 7, 2023, attacks on southern Israel.

The talks to arrange the release of the Qatar funds started in late May when Iran’s parliament speaker and chief negotiator, Mohammad Bagher Ghalibaf, led a delegation to Doha to discuss arrangements, the people familiar with the matter said. The discussions helped restore momentum in the talks toward the memorandum of understanding, the people said.

Iran is facing a severe shortage of foreign currency needed to pay for imports, as its economy continues to deteriorate under a mix of sanctions, high inflation, and a sharply weakened local currency, WSJ reported.

While releasing frozen funds may provide some relief, analysts believe that meaningful recovery of Iran’s economy would depend on substantial sanctions relief, which U.S. President Donald Trump and other senior officials have said will only be granted if Iran meets American demands regarding its nuclear program.

The United States has indicated it is prepared to show greater flexibility on access to Iran’s blocked assets. The U.S. is willing to be more flexible on access to Iran’s frozen assets. A senior administration official said Wednesday that Iran would get access to the assets if it implements the memorandum of understanding and will get more for what he called good behaviour, such as turning over enriched uranium, as reported by WSJ.