President Donald Trump has pledged to use frozen Iranian assets controlled by the United States to pay for potential damages to ships and cargo in the Strait of Hormuz, according to statements published on his Truth Social platform. The move has drawn swift condemnation from Tehran, as regional military engagements between the two nations extend into July, including Washington completing its 13th consecutive night of strikes on Iran.
Financial Stakes and the $100bn Frozen Assets Dispute
The total value of Iran’s frozen assets is estimated at about $100bn, though the exact sum remains publicly unverified, according to historical financial estimates. Washington first froze these funds in 1979 following the seizure of US citizens as hostages at the embassy in Tehran. According to the reporting, this pool of capital became a central point of discussion during negotiations for a memorandum of understanding (MoU) signed between Tehran and Washington in June. That agreement was intended as a pathway to end the war before collapsing.
President Trump asserted on his Truth Social platform that utilizing these controlled funds to cover property and cargo losses is “the fair and equitable thing to do,” despite acknowledging that the resulting damages could be very substantial. In contrast, Iranian Foreign Minister Abbas Araghchi rejected the policy in a post on X, characterizing the seizure of another nation’s assets for unrelated future claims as an “incendiary precedent.” Araghchi warned that normalising asset confiscation would leave no one’s assets safe from ensuing chaos.
Did you know?
The US government first froze Iranian financial holdings back in 1979 in response to the US embassy hostage crisis in Tehran, creating a decades-long financial impasse that remains central to current geopolitical friction.
Strait of Hormuz Shipping Disruptions and Regional Escalation
Maritime traffic through the Strait of Hormuz has dropped sharply amid the hostilities. According to ship tracking data reviewed by the Reuters news agency, the number of tankers crossing the crucial waterway fell to just one on Thursday, marking the lowest level recorded since May 7. This sharp decline follows weeks of escalating retaliatory actions between US forces and Iranian military assets in the region.
On Thursday, President Trump warned of potential major military punishment directed at Iran and its Houthi allies following a strike by Yemeni fighters against two Saudi oil tankers in the Red Sea. Concurrently, the Iranian army announced through a statement carried by the state Mehr News Agency that it launched a fresh wave of drone attacks targeting US military installations in Bahrain and Jordan. These developments occur as Washington weighs what Trump described as a “massive attack” on Iran, potentially “bigger than ever before.”
Frequently Asked Questions
How much money has the US frozen from Iran?
While the exact verified amount is not publicly known, estimates from various assessments place the total value of Iran’s frozen assets at approximately $100bn.
Why did the United States initially freeze Iranian funds?
Washington first froze Iranian financial accounts in 1979 after US citizens were taken hostage at the American embassy in Tehran.
What is happening to shipping in the Strait of Hormuz?
Tanker traffic dropped to a single vessel on Thursday, according to Reuters ship tracking data, marking the lowest volume since May 7 amid escalating military strikes.
How has Tehran responded to the proposal to use frozen assets for damages?
Iranian Foreign Minister Abbas Araghchi condemned the plan on X, describing the confiscation of state assets for future claims as an incendiary precedent that threatens global financial security.
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