The American media reported on Friday that Treasury Secretary Scot Bessent is “weighing plans to use Iranian assets to pay for the rebuilding of Gulf countries hit by retaliation from Tehran”. A senior Trump administration official told the Financial Times (FT), “the treasury will utilise all tools available to allow Iranian assets to be made available to our Gulf allies to support rebuilding and repairs for any future [or past] damage caused by Iran.” Bessent asked his team to assess conditions among Gulf allies and request comprehensive estimates of the costs associated with repairing damage Iran has inflicted since the start of the conflict.
According to different estimates, damages to American assets in the Gulf Cooperation Council (GCC) costs around five billion dollars. These are US bases and military sites, not including either radar systems or interception rocket batteries or damages to local interests in the Gulf countries. Some analysts noted that the American move could be a bid to limit the war’s fallout on allies in the Gulf, who are increasingly wary of Trump’s “erratic outbursts” since the start of the American-Israeli war on Iran.
In a CNN-aired interview, the Military Adviser to the Supreme Leader and former Islamic Revolutionary Guards Corps (IRGC) Commander, Major General Mohsen Rezaei said on Thursday that any potential US-Iran peace deal depends on the United States agreeing to release 24 billion dollars in frozen Iranian assets. Iranian assets, along with sanctions, have been a stumbling block in the negotiations between Iran and US since the ceasefire started weeks ago.
A London-based economist who worked for years in the Gulf says that this is a thorny issue that could blow up prospects of a final deal between Washington and Tehran. He disputes the analogy with frozen Russian assets being used to compensate Ukraine: “I think it is more of a negotiating card than a serious viable step to achieve.” The US Treasury measure might serve a dual purpose: countering compensation claims by Iran and its stipulation for financial relief as part of a deal; and placating GCC allies who might have had the feeling that the US is more interested in Israel’s well-being than theirs.
It is not the case that the Gulf countries are in need of financial help, which is how some observers interpreted the UAE asking for a currency swap deal – a precautionary fiscal measure many countries resort to – earlier in the war. In fact the UAE is probably the wealthiest among the GCC countries, as a Gulf commentator told Al-Ahram Weekly. “But it needs Iran to be punished for its aggression.”
There is no definite figure for Iran’s frozen assets, but many estimates put it at $100 billion. The irony is that US only controls two billion, with the rest blocked in other countries, mainly China, which holds more than $20 billion. For the US to use these assets to compensate GCC countries, it would need the consent of those countries holding them, which might be forthcoming where Japan, the EU, Iraq or Qatar is concerned but not elsewhere. Of course, Washington can also use “secondary sanctions” to appropriate those funds, but the legal hurdles are enormous.
The Institute for the Study of War (ISW) reported that Iranian officials and media continue to demand US concessions ahead of any US-Iran deal, probably to reduce US leverage before any negotiations over points of key disagreement between the United States and Iran, particularly Iran’s nuclear programme and the Strait of Hormuz. Tehran is seeking immediate economic relief as one of those preconditions. If the window of compensation and war repatriation is opened, that is likely to jeopardise efforts to reach an agreement to end the war as all parties wish. Earlier in the conflict, the Iranian government estimated damages and losses of the country from Israeli and American strikes at $270 billion. Iranian officials have called for Israel, the US and the GCC countries to shoulder that cost.
Any financial relief or reparation depends on the leverage each party of the conflict has. There is no doubt that the Americans have the upper hand, but as things stand the Trump administration wants to end the war. It is unclear what concessions Washington is ready to make to reach a deal. Trump insists that his “deal” should be better than “Obama’s deal”, referring to the Joint Comprehensive Plan of Action (JCPOA) in 2015. The JCPOA included financial relief for Tehran as it agreed to curb its nuclear programme to the minimum uranium enrichment level, but the amount of Iranian assets unfrozen as part of JCPOA was only 1.7 billion dollars.
This was nothing compared to what the Iranians are asking for now. According to Rezaei’s CNN interview, Tehran wants 12 billion freed immediately on signing and the remainder later. Now, Bessent’s move is countering this as Iran might be needed to repair billions’ worth of damages in the GCC countries; Kuwait’s airport restoration alone might cost more than JCPOA relief, not to mention damages and losses in the UAE, which bore the brunt of Iranian retaliation strikes. This escalation regarding compensation and counter-compensation might indicate that negotiations to reach a deal to stop the war are far away and more complicated than first thought. There is also a possibility that each side is raising its bargaining demands in preparation for a final compromise.
* A version of this article appears in print in the 11 June, 2026 edition of Al-Ahram Weekly.
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