What are Iran’s $100bn in frozen assets and where are they held?

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As momentum builds for a second round of talks between the United States and Iran aimed at ending their war, one central issue has emerged as a bone of contention: Tehran’s frozen assets held in other countries.

Iran’s economy has been ailing for years due to sanctions imposed on the country by the US and other nations. These sanctions have been imposed since 1979, first over the US hostages held at the American embassy in Tehran following the Islamic revolution, and then amplified over Iran’s nuclear and ballistic missiles programmes. These measures have restricted Tehran’s ability to access its own assets, like revenues from oil sales, which have been frozen in foreign banks.

What’s the volume of Iran’s frozen assets?

While the exact amount of Iran’s frozen assets is unclear, official Iranian reports and experts have set the total amount of frozen Iranian assets overseas at more than $100bn.

Frederic Schneider, a nonresident senior fellow at the Middle East Council on Global Affairs told Al Jazeera that these assets are about four times what Iran earns annually from the sale of hydrocarbons.

“This is a very substantial sum, especially for a society that has been suffering under decades of US-led sanctions,” he said.

But he added that it remains unclear whether the US — even if it were to release these assets — would make that conditional on how they are used.

“Iran definitely has a dire need for the assets but given the very chaotic history of sanctions and the lack of specialists on the US side to negotiate the details, Iran is sceptical,” he said.

Jacob Lew, who was secretary of the Treasury under former US President Barack Obama, said in 2016 that Iran would not be able to access all of its assets frozen abroad even if all sanctions were lifted. At the time, Iran had agreed to a landmark deal with the US and other nations, capping its nuclear programme in exchange for sanctions relief.

Lew had told Congress that in reality, Iran would be able to access only about half of its frozen assets at best, because the rest were already committed to previously promised investments or for loan repayments.

Currently, Tehran’s key demand in the ceasefire talks is to release at least $6bn of its frozen assets, as a confidence-building measure.

What are frozen assets?

When the funds, property or securities of a person, company or country’s central bank are temporarily retained by another nation’s authorities or a global body, that constitutes the freezing of assets.

This restricts the owners’ ability to sell these assets due to sanctions, court orders or other regulatory reasons.

Assets could be frozen by a court, by another country or international body or a banking institution. Officially, countries say that they freeze the assets of another nation or company over accusations of criminal activities, money laundering or violations of international law.

But critics of the practice point to its selective use to target rivals of the West — Israel, for instance, has faced repeated accusations of carrying out rights abuses, waging illegal wars and perpetrating apartheid. Yet its overseas assets have not been frozen by any country.

By contrast, Iran, Russia, North Korea, Libya, Venezuela and Cuba are some of the countries whose assets have been frozen by foreign governments. The common thread that binds them all: they’re opposed — or have been opposed — to the US dominance of the international order.

Why does Iran have frozen assets?

According to US government archives, the first asset freeze took place in November 1979 when the US president at the time, Jimmy Carter, said that Iran “constitutes an unusual and extraordinary threat to the national security, foreign policy and economy of the United States”.

At the time, Iranian students were holding 66 American citizens hostage in the US embassy in Tehran.

The secretary of the Treasury at the time, William Miller, told reporters that Iran’s liquid assets back then amounted to less than $6bn, the largest component of which was $1.3bn in Treasury notes held by the Federal Reserve Bank of New York. In 1981, the Algiers Accords, brokered by Algeria between the US and Iran, resulted in the US unfreezing a significant portion of these assets in return for Iran releasing the 52 American captives who were still being held at that point in Tehran.

In the following years, however, relations between the US and Iran continued to sour, with Washington uneasy over Tehran’s nuclear programme.

Iran has always maintained that its uranium enrichment programme is for civilian energy purposes only, despite having enriched uranium far beyond the threshold required for that.

Israel and the US have repeatedly accused Iran of enriching uranium to develop nuclear weapons. The US and its allies, especially Europe, have slapped multiple rounds of sanctions on the country, even though Israel — the only Middle Eastern country widely believed to already hold nuclear weapons built through a clandestine programme — has faced no such scrutiny.

In 2015, Iran struck a pact with world powers negotiated by the US under President Barack Obama, called the Joint Comprehensive Plan of Action (JCPOA). Under the pact, Tehran agreed to scale down its nuclear programme and, as a result, regained access to most of its assets abroad at the time.

But in 2018, during his first term as president, Donald Trump unilaterally pulled the US out of the pact, calling it “one-sided” and reimposing sanctions on Iran, freezing its foreign assets once again.

In 2023, the US and Iran agreed to a prisoner swap deal, which saw Tehran release five US-Iranian citizens in exchange for the US releasing several Iranians jailed in the country, and giving Iran access to billions of dollars in frozen funds. The funds in question were $6bn in oil revenue that was frozen in South Korea due to US sanctions.

Under the scheme, the money was transferred to Qatar to oversee. But the following year, United States President Joe Biden imposed new sanctions on Iran in response to its missile and drone attack on Israel, leading to Iran’s losing access to these assets in Doha yet again.

Besides the US, the European Union has also partially frozen Iran’s central bank assets on grounds of Iran allegedly committing human rights violations, and over accusations of nuclear-related noncompliance, terrorism and its drones programme supporting Russia’s war against Ukraine.

Which countries hold Iran’s frozen assets?

Iran’s frozen assets are held by multiple countries.

The exact amount each country currently holds is unclear, but Iranian media have previously reported that Japan, another important Iranian oil customer, holds about $1.5bn, Iraq holds around $6bn, China holds at least $20bn and India holds $7bn.

The US also holds approximately $2bn in directly frozen Iranian assets, while EU countries like Luxembourg hold about $1.6bn.

Qatar holds about $6bn — the amount that was moved from South Korea to pay Iran, but subsequently blocked by the US.

Why is unfreezing the assets important to Iran?

Iran’s economy is in crisis, with decades of sanctions limiting its oil exports and stalling its ability to attract investments and modernise its industry and technology.

A surge in inflation and a fall in the value of the currency, the rial, led to massive protests in December and January that then grew into a larger campaign challenging the ruling establishment. Thousands were killed amid a crackdown by security forces. Iranian officials claim that “terrorists” funded and armed by the US and Israel were responsible for the killings. Trump recently confirmed that the US had armed some protesters.

Against this backdrop, the frozen assets are locked cash that Iran could readily use: $100bn represents almost a quarter of the country’s GDP.

Roxane Farmanfarmaian, academic director and lecturer in international politics specialising in Iran at the University of Cambridge, told Al Jazeera that unfreezing Iran’s assets would be significant to the country.

“It would mean being able to repatriate its funds earned in hard currency from oil sales, for example, back into its own economy. It would also give it control over its currency fluctuations, and hence avoid the vulnerability to currency swings that, for example, set off the December 2025 protests,” she said.

She noted that significant industries, including its oil fields, water systems and electricity grids, are facing infrastructure decline and would all benefit from upgrades if the country gets free access to its assets. With the assets, Iran could pay foreign companies and its own industries to begin improving, she said.

“Obviously, it [Iran] will also have to rebuild after the war, and freed-up assets would immediately make that process quicker and more efficient,” she said.

“Having access to its frozen funds will also jump-start the economic growth it needs, improving the government’s relationship with the public and begin the long process of draining out the corruption that is the inevitable accompaniment to sanctions regimes,” she added.

The US decision on whether to unfreeze Iranian assets would also serve as a critical diplomatic message, Chris Featherstone, a political scientist at the University of York, told Al Jazeera.

“Internationally, unfreezing the assets could signal a lessening of the US pressure on the Iranian economy,” Featherstone said. “This could enable increased engagement from other international actors and regional neighbours, developing trade and integration.

“However, with the Trump administration’s unpredictable approach to international politics and the war with Iran, this could also be interpreted as further evidence of how difficult it is for allies and enemies of the US to predict the Trump administration’s next move.”

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