Iran dealIran’s frozen funds: how much is really there and how will they be used?

By Nader Habibi

Published 13 August 2015

The value and planned release of Iran’s frozen foreign assets have become hot political topics in both Tehran and Western capitals. Authoritative studies of the issue have concluded that as of July 2015, Iran’s frozen assets totaled $89.6 billion — excluding the $12 billion in the United States froze in 1979 (and which now, with interest, may be worth more than $30 billion), the status of which will not change as a result of the agreement. Of the $89.6 billion, only $29 billion would become available to Iran in the short run as a result of the nuclear deal. The rest may remain blocked for much longer because of legal disputes and ongoing tensions between Iran and the United States over other issues. The most important question for U.S. policymakers and the public is how Iran plans to spend the cash it gets back. How much if any will be spent on arms and economic resources for Iran’s allies in the region, such as the ruling regime in Syria and Hezbollah in Lebanon? Ever since the Arab Spring uprisings of 2011, Saudi Arabia has demonstrated a willingness to confront Iran in every proxy conflict with tens of billions of dollars of financial and military support. As a result, it is unlikely that Iran’s additional resources will be able to generate a decisive victory for any of its proxies. What these resources can achieve at best is to prevent the defeat of Iran’s allies and help them endure longer in the ongoing conflicts.

Professor Nader Habibi of Brandeis University // Source:

The value and planned release of Iran’s frozen foreign assets have become hot political topics in both Tehran and Western capitals.

Yet few observers, it seems, have a clear idea how much is likely to be released as a result of the nuclear deal, and political motivations of one kind or another seem to be behind the varying estimates.

Conflicting accounts
Inside Iran, there have been several conflicting statements about the total volume of these funds ever since the historic nuclear deal with the West was announced on 14 July.

Estimates range anywhere from $20 billion to $180 billion. The larger figures generally come from conservative critics of the government in parliament. Rouhani government officials, on the other hand, have generally offered smaller estimates.

In the West, questions have also been raised about the total value of these funds but also about what Iran might do with them.

President Barack Obama initially offered an estimate of approximately $100 billion. More recently, he cut that in half, to between $50 and $60 billion.

Opponents have cited similar or larger estimates as they expressed concern that this money represents a large and undeserved gift to Iran that would be used to support its proxy wars in the Middle East. They have argued, in other words, that as a result Iran is likely to become bolder in Iraq, Lebanon and Syria and cause more trouble for the United States and its allies.

How much is really there?
Iran’s portfolio of foreign assets is diverse, and the segment that has been frozen as a result of Western and international economic sanctions is spread among several countries and dates from different times. The freeze date for some goes as far back as the 1979 Islamic Revolution.

The conflicting estimates about the value of assets to be released within a year of the deal’s implementation are partly due to the fact that there are different types of assets: some will be very easy to recover, while others will likely remain tied up. Details are murky.

In general, the value of all Iranian assets blocked since 1979 most likely exceeds $100 billion. However, the assets that will be released in the aftermath of the current deal are those that were blocked more recently because of Iran’s nuclear program. These represent only a fraction of Iran’s total frozen assets and probably won’t include any of those in the United States.