Iran insists on release of frozen foreign assets

Intensive negotiations have been underway between the USA and Iran for days on a framework agreement to extend the ceasefire in place since April 8 and further negotiations. According to reports, an agreement is imminent. On Friday, US President Donald Trump even announced a "final decision" - but then made no further announcements.

The Iranian news agency Tasnim reported on Friday that Iran has repeatedly emphasized that the status of the frozen Iranian assets must first be clarified before any agreement can be reached. The Fars news agency also wrote that Trump had ignored the fact that twelve billion US dollars in frozen Iranian foreign accounts would have to be released immediately after a preliminary agreement was signed. This contradicted the US President's statements on the framework agreement.

Without this release, Iran would not enter the next phase of negotiations, according to Fars. At a meeting with economic officials in the middle of the week, Iranian President Massud Peseschkian declared that the "central battleground" was currently the economic war with the USA.

Money is very important for Tehran

According to experts, financial issues are of great importance to the Islamic Republic in view of the massive economic crisis in the country and the costly war. It is estimated that more than 100 billion US dollars of Iranian money is held in accounts abroad, some or all of which have been blocked as a result of sanctions.

Extensive sanctions have been imposed on Iran over the years - by the United Nations as well as by the USA and the European Union. One of the reasons for this is Iran's nuclear program, which some opponents regard as a cloak for building a nuclear bomb, despite Tehran's assurances to the contrary.

According to the spokesperson for the Iranian parliament's budget commission, the initial aim is to release a total of at least 24 billion US dollars, which Iran is to receive in two tranches. As part of an agreement with the Emir of Qatar, it was agreed that half of this sum - 12 billion dollars - would be made available to the Iranians via a special mechanism, Mohsen Sanganeh told the news portal "Icana" on Saturday. Alongside the cessation of hostilities and the end of the US naval blockade, this release of funds is the key prerequisite for an agreement, according to Sanganeh.

"Bitter pill for Trump"

There have been no details from the US side so far. It remains to be seen whether the USA will go along with this. Granting Iran access to this money, especially before a comprehensive agreement has been concluded, would be a bitter pill for Trump, the New York Times recently wrote. Also because Trump had repeatedly criticized former US President Barack Obama for easing sanctions and releasing payments to Iran as part of the 2015 Vienna nuclear deal negotiated under him.

When asked by a journalist at a cabinet meeting on Wednesday, Trump said that neither the easing of sanctions nor money for Iran was currently being discussed. The USA had control over assets that the Iranians claimed for themselves. "If they behave decently and do the right thing, they can have their money." But that is not yet the case.

In the eyes of John Bolton, Trump's former National Security Advisor, releasing the money is contrary to the interests of the USA. "It would only strengthen the position of the religious fanatics who run the Revolutionary Guard," he told CNN with regard to the Iranian elite force. With the money, they would regain power and be able to rebuild their nuclear programme, their missile arsenal and their terrorist organizations. "What's the point?" asked Bolton.

Tehran as a "city of empty pockets"

The already desolate economic situation in the country, exacerbated by the war, was also the subject of a report published on Saturday by the renowned Iranian daily newspaper "Shargh". Under the title "Tehran: The city of empty pockets", the paper described the economic plight of the middle class, which has now been plunged into poverty. According to the report, it is precisely this educated class of academics, which "was once the engine of the national economy", that is increasingly crumbling under the rapid inflation.

In the face of almost one hundred percent inflation, which has doubled the prices of almost all goods, many Iranians have already run out of money by the middle of the month. According to "Shargh", they are therefore forced to ask supermarkets to write them off again and only pay their debts the following month. Many are also increasingly turning to bread for meals because they can no longer afford meat, fish or even rice. "These are the hidden dimensions of poverty in the capital," concludes the report.

It remains unclear whether there will be restrictions on what Iranian money can be used for if it is released - for example, only for food or medicine imports. It is also questionable whether Iran will receive the funds directly or through an intermediary. Above all, however, the flow of money could also have a psychological effect, calm the Iranian market and drive down the exchange rate.

US military stops ship in the Gulf of Oman

Meanwhile, the US continues to enforce its naval blockade against Iran. US forces reportedly fired on a ship in the Gulf of Oman that had approached an Iranian port despite the blockade and disregarded instructions despite numerous warnings, the responsible regional command (Centcom) announced on Platform X. A US armed forces aircraft then fired a missile at the ship, rendering it unable to maneuver. The incident reportedly occurred on Friday. According to Centcom, the ship, named "M/V Lian Star", was sailing under the flag of the small West African state of Gambia.

The US government wants to increase economic pressure on Tehran with the naval blockade. It is directed against ships heading to or leaving Iranian ports. The aim is to cut off the Islamic Republic from important revenues from oil exports.