Why the UAE may release billions of dollars to Iran, a month after the Dubai attacks | Today’s news
The United Arab Emirates has agreed to release billions of dollars to Iran, four sources said, in a tactical shift after weeks of Iranian attacks on the wealthy Gulf Arab state during the US-Israeli war with the Islamic republic.
News of the move, which was not previously reported, coincides with the final stages of broader talks between Tehran and Washington to end the war, talks that diplomats say could include the release of tens of billions of dollars in Iranian oil revenue frozen in foreign banks under US sanctions.
Two regional sources told Reuters that the UAE had agreed to release a total of $10 billion, of which more than $3 billion had already been delivered.
Two other sources with knowledge of the arrangement put the total funding at $20 billion, adding that the move was agreed in exchange for an end to Iranian attacks on the UAE.
One of the sources with knowledge of the arrangements also said that the first tranche of US$3 billion has already been made available.
Reuters was unable to determine whether the funds intended for the transfers belonged to the UAE or came from long-blocked Iranian accounts in the UAE banking system or elsewhere.
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The UAE denies this
The UAE Foreign Ministry issued a statement early Saturday categorically denying reports of the transfer “including allegations involving $3 billion”.
The UAE statement “confirmed that these allegations are completely false and baseless and emphasized that no frozen Iranian funds have been released, transferred or brokered through the UAE”.
The UAE statement did not provide any further details.
Earlier, when asked by Reuters for comment on the transfer, a UAE official said the country was trying to ease tensions and promote peace.
“The UAE’s foreign policy is guided by promoting de-escalation and reducing tensions throughout the region while promoting lasting peace and stability,” the official said. “The UAE supports efforts, including those undertaken by the United States, to protect the nations of the region from the consequences of the conflict.”
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Iran last directly attacked the UAE on May 4
The White House did not immediately respond to a request for comment on the move.
In Washington, Vice President JD Vance said on Friday that funds would not be released to Iran for signing the deal with the US or attending the meeting, adding that the potential deal was structured to ensure that economic benefits would flow to Tehran if it met its commitments.
Iranian authorities did not immediately respond to Reuters’ request for comment on the move.
None of the sources cited in this article would agree to be identified due to the sensitivity of the matter.
The arrangement signals a sharp departure from the open hostility of relations between the UAE and Iran during much of the war, when Iranian attacks emptied Dubai’s hotels, sent some expatriates fleeing and shook a reputation for security crucial to the country’s position as a leading commercial hub.
One of the sources familiar with the deal said the move offers a way to help resolve the U.S.-Iran conflict without either side crossing its red line: Iran can demand compensation for war damages, Washington can insist it paid nothing, and Abu Dhabi gets its own security and status as a Dubai hub, framing the move as an investment in rebuilding regional trust.
A second source with knowledge of the arrangement said that in return for the payment, Iran would halt missile and drone attacks on the UAE and restore bilateral ties, including intelligence sharing and economic cooperation.
The source added that Iran had approached at least two other Gulf Arab countries about entering into a similar agreement.
Iran’s last known direct attack on the UAE was more than a month ago – a May 4 strike on the Gulf state’s Fujairah port in the Gulf of Oman.
The first source with knowledge of the arrangement said the talks began several weeks ago but picked up pace when officials from Iran’s powerful Revolutionary Guards visited Abu Dhabi last week to meet Sheikh Tahnoun bin Zayed al Nahyan, the UAE’s national security adviser and deputy ruler of Abu Dhabi, and stay at his guest house.
This trip was followed by a visit by UAE officials to Tehran to discuss the details of the mechanism.
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Extensive Iranian assets in Dubai
The UAE-Iran deal is set to unfold against a complex financial backdrop that potentially involves Dubai, the UAE’s main commercial hub and one of Tehran’s most important economic lifelines.
Dubai banks have long held significant deposits linked to Iran, most of which are now frozen under US sanctions that oversee the global dollar settlement system and blacklist any foreign bank dealing with Iranian entities to be cut off from the US financial network.
On April 11, a senior Iranian source said the US had agreed to release Iran’s frozen assets held in Qatar and other foreign banks, although a US official quickly denied the claim.
The source, who declined to be named because of the sensitivity of the matter, told Reuters that the unfreezing of assets was “directly linked to ensuring safe passage through the Strait of Hormuz”, a key issue in talks aimed at ending the conflict.
