Treasury Secretary Scott Bessent said Thursday that the United States intends to apply frozen Iranian assets toward covering damages that Iran inflicts on its Gulf neighbors.
On the social platform X, Bessent wrote that "Any tolls paid to the Persian Gulf Strait Authority will be offset by funds extracted from their accounts." He added that "Every attack Iran launches will only deepen the economic and financial consequences it faces."
The remarks frame the administration’s approach as a direct financial response to damage attributed to Iran, linking reparations for Gulf allies to existing frozen balances held in U.S. control. The statement underscores a policy of using restrained financial levers - specifically frozen funds - to address wartime losses rather than waiting for alternative channels.
Tehran, however, has pushed back in parallel diplomatic discussions. Iran has sought the return of about $24 billion in frozen assets and compensation related to the conflict as part of ongoing peace negotiations, according to statements disclosed publicly. This demand remains an explicit element of the talks.
Iran’s Deputy Foreign Minister Kazem Gharibabadi responded earlier in the week on X, asserting that the United States lacks the authority to apply Tehran’s frozen assets toward reconstruction for regional partners. "Iran’s assets are neither Washington’s war spoils nor a fund for paying its allies," he wrote.
The exchange of statements highlights a point of contention in negotiations: Washington’s stated readiness to redirect frozen Iranian funds for Gulf damage relief versus Tehran’s insistence on recovering the assets and securing compensation. The two positions appear to be part of a broader, unresolved dialogue tied to the conflict and to efforts at reaching any settlement.
The public comments by both officials leave the outcome of that dialogue unclear. Bessent’s message emphasizes a policy of financial consequences for further attacks, while Iranian officials reaffirm ownership claims over the frozen balances and reject their use by the United States.
Summary
The U.S. Treasury has declared it will use frozen Iranian assets to offset payments for damage Iran causes to Gulf allies. Tehran demands the return of roughly $24 billion in frozen funds and has rejected U.S. plans to divert those assets to pay for reconstruction or reparations.
Key points
- U.S. Treasury Secretary Scott Bessent said frozen Iranian assets will be used to cover damage attributed to Iran, and warned that further attacks will increase Tehran’s economic and financial burden.
- Tehran has formally requested the return of about $24 billion in frozen assets and war-related compensation as part of ongoing peace negotiations.
- Iranian Deputy Foreign Minister Kazem Gharibabadi publicly rejected the U.S. position, stating that Iran’s frozen assets are not a resource for Washington to distribute to its allies.
Risks and uncertainties
- Diplomatic impasse - Iran’s public rejection of U.S. plans to use frozen funds creates uncertainty over whether a negotiated return or settlement can be reached; this affects negotiations tied to the frozen assets.
- Escalation risk - Bessent’s warning that additional attacks will deepen economic consequences implies potential for greater financial penalties if hostilities continue, which could affect financial relations related to the frozen assets.
- Unclear implementation - While the U.S. position is publicly stated, the article does not detail the legal or operational steps for extracting and transferring the frozen funds, leaving questions about timelines and mechanisms.