Staff Reports
The Treasury is quietly asking a big question: can frozen Iranian assets be used to rebuild our Gulf allies after Iran’s missile and drone attacks? Reports say Treasury Secretary Scott Bessent ordered a review to see what legal tools exist and asked Gulf partners for damage estimates. This is a major move while talks with Tehran over a ceasefire and a possible interim deal still hang in the balance.
What the Treasury review would actually do
Here’s the simple version. Treasury staff are collecting numbers on damage to Gulf states. They are also looking at which Iranian assets the United States controls and whether those funds can be used to pay for repairs and reconstruction. Officials reportedly told staff to “use all tools available.” That sounds decisive. It also sounds like a way to help allies who were hit while refusing to hand cash back to Tehran — unless the White House decides otherwise.
Legal and diplomatic land mines
Don’t get carried away celebrating yet. Moving frozen sovereign assets is not like moving money between bank accounts. Some funds are tied up in courts, some are in third-country banks, and many are claimed by victims of past attacks or by contract judgments. There are real legal limits on what the executive branch can do alone. Congress and the courts may want a say. Gulf partners will also want a clear, secure plan before they sign off. In short: this looks smart on paper, but it needs airtight legal work and ironclad diplomacy to avoid a lawsuit or a nasty surprise in the middle of a ceasefire.
How this affects talks with Tehran
Tehran is already demanding billions as a test of “trust.” Mohsen Rezaei, a senior adviser to Iran’s Supreme Leader Mojtaba Khamenei, has been blunt about the price he wants. If the U.S. starts redirecting funds away from Iran to pay for Gulf repairs, Tehran will howl. That could stall talks or spark more attacks. Or, used wisely, it could be leverage: make any release of Iranian money contingent on verifiable steps and on reparations to the victims Iran has harmed. We should not be giving Iran a victory lap or a cash prize for aggression.
What President Donald Trump and allies should do next
If the goal is to help our Gulf partners, then do it openly and smartly. The administration should complete the legal review, bring Congress into the loop, and coordinate with Gulf states on a joint plan. Any repurposed funds should go into a transparent escrow for repairs and for families who suffered losses — not into vague accounts that Iran or its proxies could claim later. And if Treasury finds a lawful path, use it to rebuild, not to sweeten a deal for Tehran. That’s common sense, not weakness.
This is a test of will and of brains. Helping Gulf allies rebuild is the right thing to do. But it must be done in a way that punishes bad actors, protects U.S. legal standing, and strengthens our hand at the negotiating table. If we are going to touch frozen Iranian assets, let it be to fix what Iran broke — not to bankroll a deal that lets Tehran walk away with the spoils.
