US Explores Use of Iranian Assets for Gulf Reconstruction Amid Ongoing Tensions

The US Treasury is exploring a program to utilize Iranian assets for the reconstruction of Gulf nations affected by Iranian military actions. This initiative comes amid ongoing negotiations between the US and Iran, with a focus on the release of frozen assets. As tensions escalate, the potential use of these funds raises questions about trust and leverage in diplomatic relations. The situation remains fluid, with implications for regional stability and future agreements. Read on to discover the latest developments in this complex geopolitical landscape.

By Narendra Chaudhary Jun 7, 2026, 05:31 IST

US Treasury's Initiative on Iranian Assets

According to a report, US Treasury Secretary Scott Bessent is contemplating a strategy that would utilize Iranian assets to assist Gulf nations in recovering from damages attributed to Iranian-linked attacks. A source cited in the report indicated that the Treasury Department is looking into ways to make Iranian assets accessible for reconstruction efforts in countries impacted by military actions from Iran. The source stated, "Treasury will employ all available tools to ensure that Iranian assets can be utilized by our Gulf allies for rebuilding and repairs related to any future damage caused by Iran." Furthermore, Bessent has directed officials to evaluate the situation in Gulf states and gather estimates on the costs of repairing damage linked to Iran since the onset of the conflict. The Treasury Department is also considering whether these assets could help cover expenses from prior attacks. However, no specific valuation for the program has been disclosed.

Frozen Assets Central to US-Iran Negotiations

This proposal emerges as discussions between Washington and Tehran continue regarding the resolution of a conflict that began on February 28. Although the source did not explicitly mention Iran's estimated $24 billion in frozen assets, these funds have reportedly been a significant topic in the ongoing negotiations. Iran's oil revenues have faced severe impacts due to a blockade imposed by the US under President Donald Trump, following disruptions in shipping through the Strait of Hormuz. The Treasury's reported initiative was revealed after US Central Command reported that Iran had launched seven ballistic missiles targeting Kuwait and Bahrain early Saturday morning. This announcement followed attacks last week that caused damage to Kuwait International Airport, resulting in one fatality and over 60 injuries. Mohsen Rezaei, a security advisor to Iran's Supreme Leader, Mojtaba Khamenei, stated on CNN that negotiations with the US have reached a "deadlock," emphasizing that progress hinges on the release of Iran's frozen assets.

Iran has suggested that $12 billion be released immediately upon signing an interim agreement, with the remaining $12 billion to be made available later. US officials have voiced concerns that releasing these funds prematurely could diminish a crucial leverage point over Tehran. President Trump has consistently stated that any agreement with Iran must surpass the 2015 nuclear deal and has criticized previous attempts that involved transferring funds to Iran.

'A Test of Trust'

Rezaei characterized the release of these assets as a measure to build trust. He remarked, "If Trump aims to reach an agreement with Iran, this $24 billion serves as a test of trust that Iran seeks to establish with him – this is a challenge that America must overcome to pave the way forward." He asserted, "This is our money, not America's money." Rezaei also cautioned that Iran might escalate military operations if hostilities resume, stating, "We will broaden the scope of the conflict by targeting additional American bases that we have previously attacked." He indicated that any escalation could extend beyond the Persian Gulf, potentially affecting the Indian Ocean, Bab al-Mandab Strait, Red Sea, and Mediterranean Sea. Despite these warnings, Rezaei concluded that "the likelihood of war is low."