UAE Agreed to Unlock Up to $20 Billion for Iran to Halt Attacks, Sources Tell Reuters; Abu Dhabi Denies Report
The United Arab Emirates has agreed to release billions of dollars for Iran in exchange for a halt to Iranian missile and drone attacks on the Gulf state, four sources told Reuters in an exclusive report published on Friday, June 12 — a move Abu Dhabi categorically denied within hours of publication. Two regional sources told Reuters the UAE had agreed to release a total of $10 billion, with more than $3 billion already delivered. Two other sources with knowledge of the arrangement put the total figure at $20 billion.
The UAE Ministry of Foreign Affairs issued a statement on X on Saturday, June 13, saying: “The allegations are entirely false and unfounded,” adding that no frozen Iranian funds had been released, transferred, or facilitated through the UAE.
What the Sources Described
None of the four sources cited by Reuters agreed to be identified, citing the sensitivity of the matter. Reuters said it could not establish whether the funds earmarked for the transfers belong to the UAE or originate in long-blocked Iranian accounts in the UAE banking system or elsewhere.
A UAE official, asked directly by Reuters before the Foreign Ministry denial was issued, did not deny that the transfer had taken place. The official said: “The UAE’s foreign policy is guided by promoting de-escalation and reducing tensions across the region, while advancing lasting peace and stability.”
According to one source with knowledge of the arrangement, talks began several weeks ago but quickened pace when officials of Iran’s powerful Islamic Revolutionary Guard Corps became involved. The other source with knowledge of the arrangement said that in exchange for the disbursement, Iran would halt missile and drone attacks on the UAE, and the two countries would rebuild bilateral ties — including intelligence sharing and economic cooperation.
One source described the arrangement as a political solution designed to allow all parties to avoid crossing their stated red lines. Iran could claim it extracted compensation for war damages, Washington could insist it paid nothing, and Abu Dhabi would obtain its own security and preserve Dubai’s position as a regional business hub, framing the move as an investment in rebuilding regional trust, that source said.
Washington’s Position
The White House did not respond to a Reuters request for comment on the reported move. US Vice President JD Vance said on Friday that funds would not be released to Iran simply for signing a deal with Washington or attending a meeting, and that any economic benefits were structured to flow to Tehran only if it met its obligations. Vance dismissed reports that Iran would receive financial incentives for signing a peace deal as “fake information.”
Iran had not responded to a Reuters request for comment as of publication.
A Striking Pivot After Months of Hostility
The report — regardless of whether Abu Dhabi’s denial is accepted at face value — captures the depth of the transformation in UAE-Iran relations since the war began. When the US and Israel launched what the US called Operation Epic Fury in late February 2026, Iran focused significant retaliatory firepower on the UAE, viewing it as both a symbol of Gulf Arab collaboration with Washington and a financially exposed target.
Iranian attacks emptied Dubai’s hotels, drove some expatriates to flee, and shook the reputation for safety that is central to the UAE’s position as a premier international business hub. The UAE reacted with fury in the war’s early weeks, cutting off all relations with Tehran and emerging as the most hawkish voice in the Gulf — urging President Donald Trump to pursue maximalist aims against Iran. Reports published after the April 8 ceasefire revealed that the UAE secretly launched airstrikes against Iranian targets during the conflict.
Iran had long been the UAE’s primary security threat, though a degree of bilateral economic cooperation had persisted before the war. Dubai’s banks have long held substantial Iranian-linked deposits, much of them immobilised under US sanctions that expose any foreign bank participating in dollar-clearing to secondary sanctions risk.
One source told Reuters that Iran had approached two other Gulf countries with the same arrangement, though the source did not identify them.
The Broader Sanctions Dimension
The reported UAE-Iran arrangement arrives as broader US-Iran peace negotiations are entering what sources describe as their final stage. Diplomats told Reuters that those talks could involve the release of tens of billions of dollars in Iranian oil revenues frozen in foreign banks under US sanctions — a figure dwarfing the bilateral UAE transfer described in the exclusive.
One Iranian official has previously said there has been approximately $270 billion in direct and indirect damages within Iran from the conflict, and that the issue of compensation from Gulf states had been raised with mediators. Iranian President Masoud Pezeshkian has described reparations as the “only way” to end the conflict. The Trump administration has not formally responded to those demands, though Trump has said that under a conditional ceasefire, “Iran can start the reconstruction process” and “big money will be made.”
US Treasury Secretary Scott Bessent stated that sanctions relief would not occur until Iran agreed to hand over its stockpile of highly enriched uranium — a precondition Tehran has repeatedly rejected. Iran insists its nuclear programme is for peaceful purposes and has refused demands to halt enrichment.
Regional and Global Impact
The UAE’s position in the broader regional architecture gives any financial transfer between Abu Dhabi and Tehran significance well beyond its bilateral value. As a financial hub with deep integration into the global dollar system, any release of Iranian funds via UAE channels — if confirmed — would represent a workaround to US sanctions that Washington would need to address directly.
The arrangement as described by Reuters sources would provide Iran with immediate liquidity at a moment when its economy has been severely damaged by the war and existing sanctions. It would simultaneously provide the UAE with a bilateral security guarantee — a halt to missile and drone attacks — that Abu Dhabi has been unable to secure through any other means. The combination of the bilateral UAE-Iran arrangement and the broader US-Iran memorandum of understanding under discussion represents a multilayered financial and diplomatic architecture around any eventual peace settlement.
Background
The US and Israeli governments launched military operations against Iran on February 28, 2026, leading to the killing of Supreme Leader Ali Khamenei and triggering the effective closure of the Strait of Hormuz. A fragile two-week ceasefire took effect on April 8, 2026, following mediation by Pakistani Prime Minister Shehbaz Sharif, and has been extended with intermittent skirmishes since then. The UAE normalised relations with Israel in 2020 under the Abraham Accords and had long been a close security partner of Washington in the Gulf. The Strait of Hormuz closure, which disrupted approximately 20% of global oil supply, sent Brent crude above $130 per barrel in March 2026 before falling back toward $90 as peace deal prospects improved in June.
What Happens Next
Neither Iran nor the UAE’s Foreign Ministry had offered any substantive comment on the reported arrangement’s terms by the time of publication. Whether any further tranches of the reported $10 billion to $20 billion transfer proceed — and whether they are disclosed or continue to be denied — will depend in large part on the outcome of the broader US-Iran memorandum of understanding negotiations, which Trump and Araghchi both described on June 12 as being in their final stages. If a formal US-Iran peace deal is signed, the financial architecture supporting it — including any Gulf state payments — will become a central issue in congressional oversight hearings and US Treasury sanctions enforcement decisions in the weeks that follow.
