UAE to unlock frozen Iranian funds amid US ceasefire push

The United Arab Emirates has agreed to unlock billions of dollars for Iran, pursuing a tactical shift after weeks of Iranian attacks on the wealthy Gulf Arab state amid its ongoing war with the United States and Israel, four sources told the Reuters news agency.

The report on the move coincided with the final stages of broader negotiations between Tehran and Washington to end the war. Diplomats say those talks involve the release of tens of billions of dollars in Iranian oil revenues frozen in foreign banks under US sanctions.

Two regional sources told Reuters that the UAE had agreed to release a total of $10bn, more than $3bn of which had already been delivered.

Two other sources with knowledge of the ⁠arrangement put the total funds involved at $20bn, adding that the move had been agreed in return for a halt to Iranian attacks on the UAE.

One of the sources with knowledge of the arrangement also said a first tranche of $3bn had already been made available.

Reuters could not establish whether the funds earmarked for the transfers belong to the UAE or originate in long-blocked Iranian accounts in the UAE banking system, or elsewhere.

But a UAE official, asked to comment on the transfer, said the country was trying to ease tension and foster peace.

“The UAE’s foreign policy is guided by promoting de-escalation and reducing tensions across ‌the region, while advancing lasting peace and stability,” the official said.

“The UAE supports efforts, including those undertaken by the United States, to protect the peoples of the region from the repercussions of conflict.”

The White House did not immediately respond to Reuters’s request for comment on the move.

‘Red line’ workaround

Earlier on Friday, Vice President JD Vance said that frozen funds would not immediately be released to Iran upon signing a deal with the US.

He said the potential deal is structured to ensure that economic benefits would flow to Tehran if it meets its obligations.

There was no immediate response from Iranian authorities to a Reuters request for comment on the move.

None of the sources cited by Reuters would agree to be identified due to the sensitivity of the matter.

The arrangement signals a striking pivot from the open animosity of UAE-Iran relations through much of the war, when Iranian attacks emptied Dubai’s hotels, ⁠drove some expatriates to flee and shook the reputation for safety that is central to the country’s position as a premier business hub.

One of the ⁠sources with knowledge of the arrangement said the move offered a way to help solve the conflict between the US and Iran without either side crossing its red line. Iran can claim it extracted compensation for war damages. Washington can insist it paid nothing.