The United States and Iran have sent conflicting signals about what it would take to reach a deal to end the war. But amid competing demands from both sides, Tehran has not wavered from one condition: getting access to billions of its own money now frozen in foreign banks.
The funds have become a sticking point in talks, with Iran insisting that meaningful negotiations cannot begin without the money’s release, Iranian state media reported on Tuesday.
But a senior U.S. administration official who declined to be named told reporters on Sunday that while the question of Iran’s frozen funds could potentially be part of a deal down the line, Iran would have to commit to giving up its highly enriched uranium first.
“No dust, no dollars,” the official said, referring to President Trump’s term for the highly enriched uranium, which he calls “nuclear dust.”
On Wednesday, Mr. Trump said at a cabinet meeting: “We have control of money that they claim is theirs. We’ll keep control of that money. When they behave properly, and when they do what’s right, we’ll let them have their money. But right now, we’re not doing that.”
The money has become a key request for the Iranian government, which has been economically hobbled by decades of Western sanctions and recent wars with the United States and Israel. The conflicting views on the frozen funds suggest that Tehran and Washington are far apart on a peace agreement.
Iran is seeking $12 billion out of $24 billion frozen abroad, according to the Tasnim news agency, which is affiliated with Iran’s Islamic Revolutionary Guards Corps. Qatar, where some of the funds are held, is a mediator in the discussions, and Iranian and Qatari officials met on Monday.
On Wednesday, Tasnim said that there had been progress toward the release of the $12 billion but that details had not been finalized.
Allowing Iran access to the funds, especially before a deal is sealed, could be a tough pill for Mr. Trump to swallow. In a flurry of recent social media posts, he has been critical of the Obama administration’s 2015 deal with Iran, which involved sanctions relief in exchange for Iran’s limiting its nuclear ambitions.
In January 2016, as the deal was being carried out, Tehran released four detained Americans and the Obama government sent $1.7 billion to Iran to settle a decades-old financial dispute. The first installment, $400 million paid in stacks of foreign currency, was flown into Iran. Critics saw the arrangement as a scandal, which came to be known as “Pallets of Cash.”
On Monday, Mr. Trump posted two images side by side, one titled “Obama’s Iran Policy” and showing a pallet piled with money. The other was titled “Trump’s Iran policy” and was illustrated with a U.S.-flagged battleship firing at warplanes.
Though Mr. Trump remains fiercely critical of the Obama arrangement a decade later. It is not clear how his potential deal would be different.
Miad Maleki, a senior fellow at the Foundation for Defense of Democracies, a Washington research institute, says there is a workaround to allow the United States to make a key concession to Iran without taking a bigger step: lifting sanctions. Unfreezing the Iranian funds would be a “light lift” for the Trump administration, said Mr. Maleki, who oversaw sanctions campaigns at the Treasury’s Office of Global Targeting at the Office of Foreign Assets Control.
Some Iranian funds frozen in South Korea and Iraq were transferred to Oman and Qatar in 2023, when the U.S. government negotiated the release of hostages. Iranians were, for a time, allowed to use some of the money for humanitarian purposes, such as importing foodstuffs and agricultural commodities. But those funds had been released directly to exporters and bypassed Iran’s government.
Mr. Maleki suggested that the Trump administration could take the same approach — if Iran did not insist that the billions be deposited directly into its coffers. “If Iran is pushing for more funds to Iranian accounts, that would constitute sanctions relief,” he said.
That would be a more difficult decision for the Trump administration, as it would come at an initial stage of peace talks without Iran agreeing to limit its nuclear ambitions.
Allowing the Iranian government access to its frozen money would not only conflict with the Trump administration’s stated positions. It would also not align with the maximum pressure campaign the United States has been putting on Iran’s economy, said Alex Zerden, who worked on sanctions compliance and efforts to counteract Iran and the network of armed groups it supports. He did that work in various government roles, including in the Treasury Department’s Office of Terrorism and Financial Intelligence.
But throughout the war, the Trump administration has zigzagged on pressuring Iran economically. In March, it provided temporary authorization for the sale of Iranian oil already at sea in a bid to alleviate rising global energy prices. Then it clamped down in April, announcing a blockade on Iranian ports and Iran-linked ships globally.
Whether Iran is posturing and might be willing to take less than it is asking for is an open question, Mr. Zerden said. But it appears that, for the United States, he said, “the goal posts have shifted and what was unthinkable as a precondition during the first Trump administration and before this war started is now on the table.”
