Can Frozen Iranian Assets Unlock an American Agreement?

If the precise details of a ceasefire agreement between Iran and the United States – or even a long-term agreement – remain highly uncertain, Tehran should prioritize the return of its frozen Iranian assets abroad.

The available information on ongoing negotiations, as well as past instances where Tehran conditioned its approval on the release of funds held outside the country, suggests that this demand will be added to a broader request from 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 reserves to support the value of the country’s official currency, the rial.

Successive rounds of sanctions have deprived the regime of these funds, leading to a sharp decline in the value of the rial on several occasions and complicating Iranian enterprises’ ability to settle payments in euros, yen, or other currencies with foreign suppliers.

Access to currency is so critical that during a Congressional hearing in February, Treasury Secretary Scott Bessent went as far as to admit that the United States deliberately caused a shortage of dollars in Iran to act as a catalyst for protests.

“We created a shortage of dollars in the country… which peaked in December when one of Iran’s largest banks went bankrupt: there was a run on its branches, the central bank had to print money, the Iranian currency collapsed, inflation surged, and as a result, we saw the Iranians take to the streets,” said Bessent.

Prior to the outbreak of the war, Iran was already facing an economic crisis. The Iranian Statistical Center estimated annual inflation at 68.1% in February – its highest level since World War II – while the Central Bank of Iran reported a slightly lower rate, at 62.2%.

This helps explain why the issue of frozen assets is at the core of current negotiations.