Understand where the US$120 billion in Iranian assets blocked by the US are

At the center of negotiations for an interim agreement between the United States and Iran is the issue of releasing at least part of the US$120 billion belonging to Tehran that is frozen in banks in different parts of the world.

There are still disagreements about what the text of the agreement will address exactly, but the release of these resources is one of the most relevant points in the process. This is money that Iran obtained from the sale of oil and natural gas to different countries, but which is retained in international banks.

International editor Diego Pavão explained to Live CNN this Monday (15) how this blocking mechanism, called secondary sanction, works.

"Iran sells natural gas or oil to a country other than the USA. That country pays, but it uses banks that use the American financial system. Every bank that uses dollars in its transactions must use this system", stated the journalist.

When identifying a payment to Iran, Washington warns foreign banks that if they process this transaction, they will be excluded from the American financial system. "No bank wants to lose access to this system, as transactions are mostly carried out in dollars," said Pavão.

The release of at least part of the US$120 billion in assets is one of Iran's main demands for the interim agreement with the United States, signed by Donald Trump and JD Vance early this Monday afternoon.

Where are Iranian resources blocked
China is the largest buyer of Iranian oil and continues to acquire this product despite international sanctions. For the Chinese, this is an advantageous deal, as sanctioned oil is sold at discounts of US$10 to US$15 per barrel. There is around US$20 billion held in Chinese territory.

"As Iran and China have a closer relationship, this money ends up not going to Iran, because Chinese banks also do not want to be expelled from the American system, but there is an agreement for this money to be used as collateral for the purchase of Chinese products. Iran has a line of credit with China", explained Pavão.

Qatar, in turn, does not buy Iranian oil, but has taken on the role of storing resources that were in other countries, under the supervision of American authorities. The country retains around US$12 billion. Japan, a close ally of the United States, retains approximately US$1 billion.

India ($7 billion) and Luxembourg ($1 billion) are also among the countries that keep Iranian assets blocked, for the same reason: neither of these countries wants to antagonize the United States or be excluded from the international financial system.

Pavão also highlighted that there is an important distinction between the types of frozen assets. This US$120 billion is considered liquid, meaning if it is unlocked, the money could return to Iran in a matter of hours.

Another part of the money, however, is tied up in forms such as real estate and investment funds, assets that have been sitting idle for decades and are much more difficult to recover.

The issue is of direct interest to the leaders gathered at the G7 summit, as part of these resources are held in banks in countries that make up the group.

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Source: CNN