UAE reportedly unlocks billions for Iran amid efforts to halt Gulf attacks

The United Arab Emirates has agreed to unlock billions of dollars for Iran, according to a report by Reuters citing four sources, marking a tactical shift after weeks of Iranian attacks on the Gulf state.

The exclusive report coincided with the final stages of broader negotiations between Tehran and Washington to end their ongoing war. Diplomats say those talks involve the release of tens of billions of dollars in Iranian oil revenues frozen in foreign banks under United States sanctions.

Two regional sources told Reuters that the UAE had agreed to release a total of US$10 billion, more than US$3 billion of which had already been delivered. Two other sources with knowledge of the arrangement put the total funds involved at US$20 billion.

These sources said the larger figure had been agreed in return for a halt to Iranian attacks on the UAE. One source said a first tranche of US$3 billion had already been made available.

UAE denial

Shortly after the Reuters report was published, the UAE Foreign Affairs Ministry issued a statement denying the claims.

The ministry said the UAE had "categorically denied reports circulating in some international media outlets regarding the transfer or conversion of any funds from the UAE to the Islamic Republic of Iran, including claims concerning US$3 billion".

It added that "no frozen Iranian funds have been released, transferred, or moved through the UAE".

The ministry also urged media outlets to "exercise accuracy and obtain information from official sources", and to refrain from circulating "unsubstantiated information or claims lacking credibility".

Reuters said it could not establish whether the funds earmarked for the transfers belonged to the UAE or originated from long-blocked Iranian accounts within the UAE banking system, or elsewhere.

A UAE official, asked to comment on the transfer, said the country was seeking to ease tensions and foster peace. The official said the UAE's foreign policy was "guided by promoting de-escalation and reducing tensions across the region, while advancing lasting peace and stability".

The official added that the UAE "supports efforts, including those undertaken by the United States, to protect the peoples of the region from the repercussions of conflict".

The White House did not immediately respond to a request for comment on the move. Iranian authorities also did not immediately respond to a similar request.

None of the sources cited by Reuters agreed to be identified, citing the sensitivity of the matter.

A "red line" workaround

Earlier on Friday, Vice President JD Vance said that frozen funds would not be immediately released to Iran upon the signing of a deal with the United States.

He said any potential deal was structured to ensure economic benefits would flow to Tehran only if it met its obligations.

According to one source with knowledge of the arrangement, the move offered a way to resolve the conflict between Washington and Tehran without either side crossing its declared red lines.

The source said Iran could claim it had extracted compensation for war damages, while Washington could maintain it had paid nothing directly.

For Abu Dhabi, the source said, the arrangement secures its own safety and protects Dubai's status as a regional hub, while presenting the move as an investment in rebuilding regional trust.

Shift from open hostility

The arrangement marks a striking pivot from the open animosity that characterised UAE-Iran relations through much of the war.

During that period, Iranian attacks emptied hotels in Dubai and prompted some expatriates to leave, unsettling the emirate's reputation for safety, which underpins its role as a premier business hub.

The last known direct attack by Iran on the UAE took place more than a month ago, on 4 May 2026, when a strike hit the Gulf state's Fujairah port on the Gulf of Oman.

A second source with knowledge of the arrangement said that, in return for the disbursement, Iran would halt missile and drone attacks on the UAE.

The source said the agreement also envisaged a rebuilding of bilateral ties, including intelligence sharing and economic cooperation. Iran had reportedly approached at least two other Gulf Arab countries with similar proposals.

Talks accelerate after Abu Dhabi visit

According to the first source with knowledge of the arrangement, talks had begun several weeks earlier but gathered pace after officials from Iran's Revolutionary Guard visited Abu Dhabi the previous week.

The source said the Revolutionary Guard officials met Sheikh Tahnoon bin Zayed Al Nahyan, the UAE's national security adviser and deputy ruler of Abu Dhabi, and stayed at his guest house.

That visit was followed by a trip by UAE officials to Tehran to negotiate the details of the mechanism, the source said.

Frozen funds and the Strait of Hormuz

Dubai's banks have long held substantial Iranian-linked deposits, much of which remain immobilised under US sanctions governing the global dollar-clearing system.

Foreign banks dealing with blacklisted Iranian entities risk being cut off from the US financial network under these measures.

On 11 April 2026, a senior Iranian source told Reuters that the United States had agreed to release Iranian frozen assets held in Qatar and other foreign banks, although a US official swiftly denied this assertion.

That source, who also declined to be named, said unfreezing the assets was "directly linked to ensuring safe passage through the Strait of Hormuz", a key issue in talks aimed at ending the conflict.