U.S. floats steering frozen Iran assets to Gulf allies for repairs

Treasury Secretary Scott Bessent has directed his team to assess conditions among US allies in the region and request comprehensive estimates.

The Trump administration is seeking to steer Iranian assets toward helping US allies in the Persian Gulf rebuild from damage inflicted by Tehran, and to repair any future destruction. 

The effort, which was described by a senior administration official who wasn’t authorized to speak publicly, is unfolding alongside fitful talks between Washington and Tehran on a potential agreement to extend a truce in the Iran war. Negotiations appear to have bogged down over Tehran’s insistence on the release of some $24 billion in frozen Iranian financial assets.

The Trump administration’s approach would put some of the assets on a different path. The Treasury Department will use all tools available to allow Iranian assets to be used by Gulf allies to support rebuilding, the official said.

The initiative risks further chilling negotiations on a truce extension, reopening the Strait of Hormuz and paving the way for more detailed talks over Iran’s nuclear program. 

Reuters reported earlier on the effort.

An initial step is already underway, as the US government looks to calculate cost estimates for the repairs. 

Treasury Secretary Scott Bessent has directed his team to assess conditions among US allies in the region and request comprehensive estimates of the costs associated with repairing damage inflicted by Tehran since the start of the conflict, the official said. 

Since the US and Israel began striking Iran on Feb. 28, Tehran and its proxies have launched missile and drone attacks on oil infrastructure, industrial sites and US military facilities throughout the region. Saudi Arabia, the United Arab Emirates, Kuwait and Bahrain have all sustained damage. 

The Treasury Department also will consider whether Iranian assets could be used to support repairs for past damages, the official said. That opens the possibility of reimbursement for costs associated with restoring oil infrastructure targeted by Tehran and Iran-backed groups years ago.

US President Donald Trump has mused that Tehran’s strikes on its Persian Gulf neighbors have further alienated US allies in the region against Iran. 

Trump also has frequently criticized former President Barack Obama for transferring funds to Iran and indicated an unwillingness to cede leverage by relinquishing the assets, insisting instead that no money will be exchanged.

This story was originally featured on Fortune.com