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(Bloomberg) — President Donald Trump said damage to ships and cargo would be paid for by Iranian funds frozen by the US after new strikes by Houthi rebels in Yemen further strained global energy flows.
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Trump in a social media post Thursday said that “from this point forth, any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls.”
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“These damages may be very substantial but, nevertheless, this is the fair and equitable thing to do,” he added.
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The president didn’t provide details on how such payments would work, including whether the US would pay shipping companies directly.
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Trump has been escalating threats against Iran in recent days after the two sides have clashed numerous times over the past two weeks. The Houthis, who are backed by Iran, struck two Saudi Arabian oil tankers in the Red Sea, further widening the conflict.
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Why Releasing Iranian Assets Is Politically Fraught: Explainer
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The US has about $2 billion worth of blocked Iranian funds inside its borders. A much larger portion resides in jurisdictions of other countries and is prevented from being transferred by US sanctions — estimates vary from $24 billion to more than $100 billion.
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The release of those funds, along with the lifting of US sanctions and the creation of a $300 billion effort to invest in Iran, were key elements of a so-called memorandum of understanding signed by President Trump and Iranian President Masoud Pezeshkian in June.
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Nevertheless, the use of the funds are heavily contested, with victims of terrorist attacks linked to Iran over the last several decades asking the American president to instead compensate them for their losses and injuries.
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The US-Iran memorandum was vague about when and under what circumstances Iran might gain access to the money. However, the subsequent resumption of warfare shattered the peace process called for by the memorandum.
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—With assistance from Daniel Flatley, Derek Wallbank and Kevin Whitelaw.
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(Updates with details on the Iranian funds, from fourth paragraph.)
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English (US)