UAE Releases Frozen Iranian Funds to Ease Tensions Amid US Ceasefire Push

The United Arab Emirates (UAE) has agreed to release frozen funds to Iran, estimated between $10 billion and $20 billion, in a tactical shift aimed at reducing tensions after weeks of Iranian attacks, according to four sources who spoke to Reuters. The move coincides with the final stages of broader ceasefire negotiations between Tehran and Washington.

Over $3 billion has already been transferred, two regional sources told Reuters. Other sources with knowledge of the arrangement put the total at $20 billion and said the deal was reached in return for a halt to Iranian missile and drone strikes on the UAE. The agreement also includes rebuilding bilateral ties, including intelligence sharing and economic cooperation.

A UAE official said the country's foreign policy focuses on de-escalation and promoting peace. The White House did not immediately comment. US Vice President JD Vance said on Friday that frozen funds would not be released immediately upon signing a deal with Iran, but would be structured to provide economic benefits as Iran meets its obligations.

The arrangement is seen as a workaround for both sides to avoid crossing their red lines. Iran can claim it received compensation for war damages, while the US can insist it paid nothing. For Abu Dhabi, the move secures its own safety and protects Dubai's status as a premier business hub, which suffered during the conflict.

The last direct Iranian attack on the UAE was on May 4, targeting the Fujairah port. Talks began weeks ago but accelerated after a visit by Iranian Revolutionary Guard officials to Abu Dhabi last week, where they met Sheikh Tahnoun bin Zayed al Nahyan. This was followed by a UAE delegation to Tehran to finalize the mechanism.

Dubai's banks have long held substantial Iranian-linked deposits, most of which are frozen under US sanctions. Any foreign bank dealing with blacklisted Iranian entities risks being cut off from the US financial network.