If the precise details of a ceasefire agreement between Iran and the United States – or even a long-term agreement – are still uncertain, Tehran should prioritize demanding the return of its frozen Iranian assets abroad. Information on ongoing negotiations, as well as past incidents where Tehran conditioned its approval on the release of funds held outside the country, suggest that this demand will be added to a broader request by Washington for the lifting of all primary and secondary sanctions imposed on Iran.
The exact value of Iran’s frozen assets remains unknown, but several estimates put it at over 100 billion dollars (86.5 billion euros). In the past, the Tehran regime opened currency accounts with major international banks to build up reserves to support the country’s official currency, the rial.
Successive rounds of sanctions cut the regime off from these funds, leading to a plummeting rial value and hindering Iranian businesses that pay for goods and services from foreign suppliers in euros, yen, or other currencies. Access to foreign currency is so crucial that during a congressional hearing in February, Treasury Secretary Scott Bessent acknowledged that the United States deliberately caused a dollar shortage in Iran, serving as a catalyst for protests.
Before the outbreak of war, Iran was in a state of economic urgency, with inflation rates reaching record highs since World War II. This explains why the issue of frozen assets is at the center of current negotiations.
The U.S. has long used sanctions to restrict Iran’s access to its foreign exchange reserves, but the country has obtained partial access to some of its frozen assets on several occasions. For example, after the interim nuclear agreement in 2014, Iran was allowed to repatriate 4.2 billion dollars (3.6 billion euros) of oil revenues held abroad.
In light of the reinstatement of American secondary sanctions in 2018, Iranian diplomacy has focused largely on bilateral negotiations with various countries to secure the release of these funds. The last major transfer occurred in September 2023 when around 6 billion dollars (5.1 billion euros) of Iranian oil revenue were transferred to restricted accounts in Qatar under a U.S. waiver related to a prisoner exchange.
Given the complex history of frozen Iranian assets dating back to the 1979 crisis, the upcoming discussions on the release of Iranian funds will be crucial for both parties involved. Efforts to understand the nuances of these negotiations as they unfold are essential for assessing the potential implications on the global economic landscape.
