Highlights

• Two sources say at least $10 billion to be unlocked under deal
• First $3 billion tranche already sent, sources say
• Deal includes revived economic ties, source says
• UAE official says Gulf state aims to ease regional tensions
• Iran sought similar pact with two other Gulf states, source says

The United Arab Emirates has agreed to unlock billions of dollars for Iran, four sources said, in a tactical shift after weeks of Iranian attacks on the wealthy Gulf Arab state during the US-Israeli war with the Islamic Republic.

Word of the move, which has not been previously reported, coincides with the final stages of broader negotiations between Tehran and Washington on ending the war, talks that diplomats say could involve the release of tens of billions of dollars in Iranian oil revenues frozen in foreign banks under US sanctions.

Two regional sources told Reuters the UAE had agreed to release a total of $10 billion, more than $3 billion of which had already been delivered.

Two other sources with knowledge of the arrangement put the total funds involved at $20 billion, adding that the move had been agreed in return for a halt to Iranian attacks on the UAE.

One of the sources with knowledge of the arrangement also said a first tranche of $3 billion had already been made available.

Reuters 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.

The UAE foreign ministry issued a statement early on Saturday categorically denying reports of the transfer “including allegations concerning $3 billion”.

The UAE statement affirmed that these allegations are entirely false and unfounded, stressing that no frozen Iranian funds have been released, transferred or facilitated through the UAE.

The UAE statement did not provide any further specifics.

Earlier, when asked by Reuters to comment on the transfer, a UAE official said the country was trying to ease tension and foster peace.

“The UAE’s foreign policy is guided by promoting de-escalation and reducing tensions across the region, while advancing lasting peace and stability,” the official said. “The UAE supports efforts, including those undertaken by the United States, to protect the peoples of the region from the repercussions of conflict.”

Iran last attacked the UAE directly on 4 May

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

In Washington, Vice President JD Vance said on Friday that funds would not be released to Iran for signing a deal with the US or attending a meeting, adding that the potential deal is structured to ensure that economic benefits would flow to Tehran if it meets its obligations.

There was no immediate response from Iranian authorities to a Reuters request for comment on the move.

None of the sources cited in this article would agree to be identified due to the sensitivity of the matter.

The arrangement signals a striking pivot from the open animosity of UAE-Iran relations through much of the war, when Iranian attacks emptied Dubai’s hotels, drove some expatriates to flee and shook the reputation for safety that is central to the country’s position as a premier business hub.

One of the sources with knowledge of the arrangement said the move offered a way to help solve the conflict between the US and Iran without either side crossing its red line: Iran can claim it extracted compensation for war damages, Washington can insist it paid nothing, and Abu Dhabi obtains its own security and Dubai’s hub status, while framing the move as an investment in rebuilding regional trust.

The other source with knowledge of the arrangement said that in return for the disbursement, Iran would halt missile and drone attacks on the UAE, and there would be a rebuilding of bilateral ties, including intelligence sharing and economic cooperation.

The source added that Iran had approached at least two other Gulf Arab countries to make a similar arrangement.

The last known direct attack by Iran on the UAE was more than a month ago – a 4 May strike on the Gulf state’s Fujairah port on the Gulf of Oman.

The first source with knowledge of the arrangement said talks had started several weeks ago but quickened pace when officials of Iran’s powerful Revolutionary Guards visited Abu Dhabi last week to meet Sheikh Tahnoun bin Zayed al Nahyan, the UAE’s national security adviser and deputy ruler of Abu Dhabi, and stayed at his guest house.

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

Sizeable Iranian assets in Dubai

The UAE-Iranian arrangement is set to unfold against a complex financial backdrop potentially involving Dubai, the UAE’s main commercial hub and one of Tehran’s most critical economic lifelines.

Dubai’s banks have long held substantial Iranian-linked deposits, much of them now immobilised under US sanctions that police the global dollar-clearing system and expose any foreign bank dealing with blacklisted Iranian entities to being cut off from the American financial network.

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

The source, who declined to be named due to the sensitivity of the matter, told Reuters that 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.

Summary

• Washington expects initial deal in coming days, US official says
• Pakistan PM says text of a deal has been finalised
• Trump calls reports of terms that favour Iran ‘fake news’
• Deal as outlined by Western, Iranian, Pakistani sources appears to match terms originally proposed by Tehran
• Western source says deal could be signed as soon as Sunday
  

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The United States and Iran signalled yesterday (12 June) that an agreement to end their war was close, with a senior US administration official saying both sides had agreed on a ‌text and that Washington expects to sign an initial deal in the coming days.

Iran’s decision-making bodies were meeting to discuss the memorandum, Iran’s foreign ministry spokesperson said.

The terms of the so-called memorandum of understanding include reopening the Strait of Hormuz and lifting the US blockade on Iranian ports, the US official told reporters, adding that the deal met President Donald Trump’s core objectives and put negotiations “in a very, very good place.”

Leaked terms of the proposed memorandum outlined by Western, Pakistani and Iranian sources earlier yesterday appeared ​to favour Iran, drawing criticism from Trump, who dismissed the reports as inaccurate.

While there were minor differences in the accounts, all appeared to offer Tehran much of what it has demanded so far, ​with Trump appearing to win little of what he has sought beyond the reopening of the strait, which Iran shut after the US and Israel launched attacks ⁠in February.

The US official, however, said the agreement would ultimately lead to the dismantling of Iran’s nuclear programme, with its stockpile of highly enriched uranium to be destroyed and removed – a key US demand.

Trump also reposted comments ​by Iranian Foreign Minister Abbas Araqchi, who said a memorandum to end the war had “never been closer.”

Pakistan, which has for weeks sought to broker a deal, said a final text had been settled upon. “Pakistan is now working ​closely with both sides to finalise the next steps,” Prime Minister Shehbaz Sharif said in a post on X.

WHAT’S IN THE DEAL?

Draft terms of the deal described to Reuters by multiple sources indicate that the US would immediately begin releasing billions of dollars in frozen Iranian assets and waive sanctions on its oil exports, in return for Iran opening the strait.

Discussion of Iran’s nuclear programme would be set aside for a 60-day period of talks on a final settlement, they said. The proposals include discussion of possible war ​reparations for Tehran and dropping longstanding US demands for limits on Iran’s missile programme, the sources said.

Washington has repeatedly demanded Iran give up its stockpile of highly enriched uranium. Another senior US official, describing the agreement, said the ​uranium stockpile “will be destroyed and removed” and Iran’s nuclear programme would be dismantled.

“None of their money released until they perform. Strait of Hormuz will be open. No Iran funding of terrorist groups,” the official said. “This is what they have agreed to. ‌This is ⁠a performance-based deal.”

Vice President JD Vance said on X: “First, the Iranians are not receiving any cash, and no funds are being released for simply signing a deal or attending a meeting.”

The deal ensures economic benefits would only flow to Iran if it meets its obligations under the agreement, he said.

ISRAEL NOT PARTY TO MEMORANDUM

A Western source said that if language can be agreed, the memorandum could be signed as soon as Sunday by Vance and Iran’s parliament speaker, Mohammad Baqer Qalibaf, with Geneva seen as the likeliest venue.

The US administration official said Europe had been discussed as a venue for signing but no decision had been made.

Israel, which launched the war alongside the United ​States, has not been part of the negotiations. Prime ​Minister Benjamin Netanyahu said his country would not ⁠be party to the memorandum.

Netanyahu has clashed with Trump in recent weeks over US demands that Israel curb military action in Lebanon to let Washington reach a deal with Tehran.

Israel’s defence minister said Israel would not withdraw from territory in Lebanon. A senior Israeli official said Israel expects under any deal to retain its freedom to act against ​what it deems threats in areas under its control.

OIL PRICE FALLS

The progress towards an agreement has emerged at the end of a week that brought a sharp escalation ​in hostilities in the Gulf, including Israeli-Iranian ⁠exchanges of fire and US strikes on Iranian targets, followed by retaliation against US bases.

Indications of a potential deal prompted global shares to rally and oil prices to slip. Brent crude prices were down more than 3% at their lowest in nearly two months.

The conflict has become a political headache for the White House, amid rising fuel prices and slipping approval ratings for Trump.

Some Republicans worry that the war’s unpopularity could cost them control of Congress in November’s midterm elections. But ⁠many Republicans hold ​hawkish positions on Iran and could have difficulty endorsing an agreement viewed as yielding concessions.

Tehran has always said its nuclear programme ​is peaceful and accepted tight curbs on it in return for the lifting of sanctions under a 2015 agreement with the administration of then-US President Barack Obama.

Trump abandoned that deal during his first term in 2018 and Iran responded by ramping up its enrichment of uranium, ​producing more than 400 kg (around 900 pounds) of material at close to the purity needed to make a bomb.