UAE rejects reports it agreed to release frozen Iranian funds

DUBAI: The United Arab Emirates has denied reports that it agreed to release billions of dollars in frozen Iranian assets, with its foreign ministry saying claims that any such funds had been freed were false.

In a statement issued early on Saturday, the ministry categorically rejected reports of a transfer, including claims involving $3 billion. No frozen Iranian money had been released, transferred or facilitated through the UAE.

The ministry said the allegations were entirely baseless.

“The statement affirmed that these allegations are entirely false and unfounded, stressing that no frozen Iranian funds have been released, transferred or facilitated through the UAE”, the statement said.

The statement did not give further details.

Reuters report cited unnamed sources

The denial followed a Reuters report that said the UAE had agreed to unlock billions of dollars for Iran, citing four unnamed sources. According to that report, the move reflected what Reuters described as a tactical shift after weeks of Iranian attacks on the Gulf state during the US-Israeli war with Iran.

Reuters reported differing accounts of the amount involved. Two regional sources said the UAE had agreed to release $10 billion in total, and that more than $3 billion had already been delivered. Two other sources familiar with the arrangement put the figure at $20 billion and said the understanding was reached in exchange for a halt to Iranian attacks on the UAE. One of those sources also said an initial tranche of $3 billion had already been made available.

Reuters said it could not determine whether the funds slated for transfer belonged to the UAE or came from long-frozen Iranian accounts in the UAE banking system or elsewhere.

UAE position and wider diplomacy

Before the foreign ministry issued its denial, a UAE official told Reuters the country was working to calm tensions and encourage peace.

The official said “The UAE's foreign policy is guided by promoting de-escalation and reducing tensions across the region, while advancing lasting peace and stability. The UAE supports efforts, including those undertaken by the United States, to protect the peoples of the region from the repercussions of conflict.”

According to the Reuters report, news of the alleged move came as Tehran and Washington were in the final stages of broader negotiations aimed at ending the war. Diplomats cited by Reuters said those talks could involve the release of tens of billions of dollars in Iranian oil revenues frozen in foreign banks under US sanctions.

In Washington, Vice President JD Vance said on Friday that funds would not be released to Iran simply for signing a deal with the United States or attending a meeting, while adding that any potential agreement was designed so that economic benefits would reach Tehran if it met its obligations. The White House did not immediately comment on the reported arrangement, according to Reuters.

Reuters also said there was no immediate response from Iranian authorities to its request for comment.

Security backdrop and reported contacts

Reuters reported that the UAE had been heavily targeted by Iran during the war, but had not faced fresh strikes in the past month. Iran had instead aimed missiles and drones at Kuwait and Bahrain. The last known direct Iranian attack on the UAE was a May 4 strike on Fujairah port on the Gulf of Oman.

According to Reuters, one source familiar with the alleged arrangement said it was seen as a way to help resolve the conflict between the United States and Iran without either side crossing its red lines. Another source said the understanding would involve Iran halting missile and drone attacks on the UAE, alongside a rebuilding of bilateral relations that would include intelligence sharing and economic cooperation. The same source added that Iran had approached at least two other Gulf Arab states about a similar arrangement.

Reuters further reported that talks had begun several weeks earlier and accelerated after officials from Iran's Revolutionary Guards visited Abu Dhabi last week for meetings with Sheikh Tahnoun bin Zayed al Nahyan, the UAE national security adviser and deputy ruler of Abu Dhabi, and stayed at his guest house. That visit was followed, Reuters said, by a trip by UAE officials to Tehran to discuss the details of the mechanism.

Financial context

Reuters said the reported arrangement would unfold in a complicated financial environment involving Dubai, which it described as one of Tehran's most important economic lifelines. It reported that banks in Dubai have long held sizeable Iranian-linked deposits, much of them immobilised under US sanctions tied to the global dollar-clearing system.

The report also referred to an April 11 statement by a senior Iranian source who said the United States had agreed to release Iranian frozen assets held in Qatar and other foreign banks, although a US official quickly denied that claim. The Iranian source told Reuters that unfreezing the assets was directly connected to ensuring safe passage through the Strait of Hormuz during talks aimed at ending the conflict.