Iran has demanded the release of nearly $24 billion in frozen assets as a shaky ceasefire takes effect across the Gulf Region. Top US officials have insisted that relief measures will be “performance-based” — even as the newly signed peace deal commits the United States to unfreezing Iranian funds held abroad. A new report suggests that America is mulling the possibility of releasing $6 billion through the purchase of humanitarian aid for Iran using its frozen assets.

According to a report by the Wall Street Journal, the United States is mulling the possibility of working with Qatar to chart a plan for releasing billions of dollars in frozen funds. The early financial incentive comes as a part of the recently inked peace pact between Tehran and Washington. Details have not yet been finalised, but the funds will reportedly be used for humanitarian spending in Iran. 

There is an estimated $100 billion in Iranian funds, including cash from oil sales that have been locked up overseas by sanctions. WSJ reported that the plan would start by giving Tehran access to $6 billion held in Qatar. Under the deal, Doha will reportedly purchase humanitarian goods such as food and medicines ordered by the Iranian central bank by utilising the money drawn from Tehran’s frozen assets.

‘Pay-for-performance’ deal?

The US has committed to unfreezing Iranian funds held abroad, but Vice President JD Vance said recently that sanctions relief would be “performance-based.” 

Iranian state media reported on Monday that Washington had agreed to release half of this amount before the final negotiations were started. A US official did not immediately dismiss the Iranian claims on Monday — telling Axios that it was a “pay-for-performance deal”. The unnamed official insisted that no frozen funds will be released without Iran implementing its commitments.

Subsequent reports suggest that efforts remain underway for the release of Iranian assets worth several billion dollars. But the exact timing and pre-conditions have not been formalised or publicly announced.  It remains unclear whether Tehran would acquiesce to such an arrangement. 

$300 billion investment fund for reconstruction

The amount is separate from the reconstruction plans for Iran worth at least $300 billion. It was one of 14 points in the final memorandum and calls for the United States and its regional allies to develop a $300 billion reconstruction fund for Iran. But it does not say who would pay for it. 

Trump has said the US won’t contribute, and Vance has said it would be up to wealthy Gulf countries to fund it. But they are unlikely to want to help Iran at a time when their own economies are suffering from the war’s fallout and the destruction of their infrastructure in Iranian attacks.