Iran has vehemently rejected any notion of its frozen assets being used to compensate U.S. allies for war-related damages, with Deputy Foreign Minister Kazem Gharibabadi stating that regional governments are not in a position to demand such reparations.
Gharibabadi asserted via a post on X that Iran's assets are "neither war spoils for Washington nor a payment fund for its allies." This statement follows reports citing a source familiar with the matter indicating that the United States intended to make Iranian assets available to Gulf allies for rebuilding and repairs stemming from potential future damages, and also to consider compensation for past incidents.
The U.S. Treasury Secretary Scott Bessent has reportedly directed a team to assess the cost of damages already inflicted by Iran on its Gulf neighbors. Iran has claimed responsibility for missile and drone attacks on U.S. bases in Kuwait and Bahrain, stating these actions targeted U.S. and Israeli interests in the region. Kuwait reported material damage but no casualties following the intercepted missiles, while Bahrain urged its residents to seek shelter.
According to a report by Rystad Energy in April, the conflict in the Middle East could result in repair costs of up to $58 billion for energy-linked infrastructure alone. Gharibabadi warned that any seizure, transfer, or allocation of Iranian assets without Tehran's consent would constitute a "new internationally wrongful act," holding the U.S. responsible and prompting an "appropriate response" from Iran.
Iran has been seeking the release of a portion of its seized funds as part of ongoing negotiations with the U.S. aimed at ending the conflict. Gharibabadi further contended that certain regional governments, by placing their territories and facilities at the disposal of actions against Iran, have forfeited any right to claim reparations and should instead compensate Iran for damages it has sustained.
Tehran's demands to conclude the war reportedly include the release of billions of dollars in frozen assets, the lifting of U.S. and international sanctions, and recognition of its influence over the Strait of Hormuz.
