US and Iranian negotiators are exploring a ceasefire that would unfreeze up to $130 billion in Iranian assets held worldwide, Foreign Policy reported on May 30. The deal could end a months-long blockade that has shut the Strait of Hormuz and driven US gasoline prices above $5 a gallon. “The Americans appear to be offering to unsanction Iran’s oil,” said economist Adam Tooze.
The frozen funds are scattered across South Korea, India, Qatar, and other nations—not primarily in the United States. They represent uncompleted oil and gas sales, plus military orders dating back to the Shah’s era. The Americans never delivered those weapons.
The money sat frozen. Tooze, a columnist at Foreign Policy and director of the European Institute at Columbia University, said the assets could total $120 to $130 billion. That is roughly one-third of Iran’s severely diminished GDP.
The US blocked these funds through secondary sanctions—threatening any bank or company worldwide that did business with Iran. Lifting those sanctions would release a flood of hard currency. But the more immediate prize is Iran’s oil.
The Trump administration wants Iranian crude back on global markets before midterm elections. US petrol prices have topped $5 per gallon. The Strait of Hormuz closure has choked off roughly 20% of the world’s oil supply.
Iran’s economy has been shattered by the war. The Iranian labor ministry estimates 2 million jobs lost. Labor unionists put the figure closer to 3 or 4 million—about 10% of the workforce.
Israel has systematically bombed Iranian steel plants and petrochemical facilities. The goal, Tooze explained, is “attritting Iran’s military-industrial complex.”
Iranian officials say the damage has reached $270 billion. That is more than half of Iran’s GDP. The destruction is not widely reported in Western media.
But it mirrors Russia’s campaign in eastern Ukraine. Israel makes no secret of its strategy. The war has also triggered the longest internet blackout in history.
For 88 consecutive days, Iran has cut off most online access. An estimated 10 million Iranians rely on digital transactions for their livelihoods. Global consultancies calculate a daily loss of $23 million per 10 million inhabitants.
Scaled to Iran’s 90 million people, that is $180 million per day. Over 88 days, the total loss exceeds $15 billion. The blackout has crippled supply chains and e-commerce.
A black market has emerged. Wealthier Iranians can buy a special SIM card that bypasses the restrictions. But it requires registering all personal details with the authorities.
For crypto traders and dissidents, that is a non-starter. The internet was once a zone of relative freedom in Iran. Now it is a tool of surveillance.
The blackout began shortly after a wave of protests rocked the regime. The government’s dual strategy—shut down access, then offer monitored reconnection—has deepened public distrust. Diplomatic talks are chaotic.
Iran launched a barrage of drones toward the US even as negotiations progressed. Israel wants to continue its bombing campaign in Lebanon. Trump has at times suggested a broader regional deal is necessary.
The confusion is immense. Tooze described the situation as “very confused, but we are really exploring the boundary and the envelope of what might be possible.” A few years ago, such talks were unthinkable. Now they are the only path out of a war.
The Strait of Hormuz remains the central bargaining chip. Iran has effectively controlled the waterway since the war began. It has imposed tolls on passing tankers.
In ceasefire talks, Iran will likely rebrand these as “fees.” The distinction matters. A toll implies highway robbery. A fee sounds administrative.
The sums involved are trivial for tanker operators. A single large tanker can carry oil worth 100 times the proposed fee. So a modus vivendi is likely.
But the precedent is dangerous. Since the 1970s Carter Doctrine, the US has vowed that no hostile power would control Hormuz. That red line has been crossed.
Tooze said it is “very hard to imagine anything going back to normal any time soon.” Iran has tasted the power of blocking the strait. The experience will not be forgotten. Any deal will be deeply embarrassing for Washington if it looks like a capitulation.
The economic toll extends far beyond Iran. Global supply chains have been disrupted for months. Energy prices have spiked.
The World Bank has warned of a potential recession if the strait remains closed. The ceasefire talks are not just about Iran—they are about the global economy. Here is what they are not telling you.
The frozen assets are not a gift. They are Iran’s own money, blocked by US financial warfare. The sanctions relief is not generosity.
It is a recognition that maximum pressure has failed. The math does not add up. Iran’s economy is in ruins, but it has not surrendered.
Follow the leverage, not the rhetoric. Why It Matters: A US-Iran deal would reshape the Middle East’s power balance and reopen the world’s most critical oil chokepoint. For ordinary Americans, it could mean lower gas prices before the midterms.
For Iranians, it could end an economic siege that has cost millions of jobs and billions in damage. The stakes are measured in blood and treasure. Key Takeaways: - Up to $130 billion in frozen Iranian assets could be released under a ceasefire deal, mostly held in South Korea, India, and Qatar. - Israel’s bombing campaign has inflicted $270 billion in damage on Iran’s industrial base, while an 88-day internet blackout costs the economy $180 million daily. - Iran’s de facto control of the Strait of Hormuz gives it lasting leverage, making a return to the prewar status quo unlikely. - The Trump administration faces midterm pressure to lower US gasoline prices, which have surpassed $5 a gallon due to the strait’s closure.
The next weeks will be decisive. Negotiators must bridge gaps between Iran’s demand for full sanctions relief and Israel’s insistence on continuing military operations. The US midterm elections loom.
Oil markets are watching. A deal could come suddenly—or the war could grind on for months. The Strait of Hormuz will not reopen without a political breakthrough.
And that breakthrough remains elusive.
Key Takeaways
— - Up to $130 billion in frozen Iranian assets could be released under a ceasefire deal, mostly held in South Korea, India, and Qatar.
— - Israel’s bombing campaign has inflicted $270 billion in damage on Iran’s industrial base, while an 88-day internet blackout costs the economy $180 million daily.
— - Iran’s de facto control of the Strait of Hormuz gives it lasting leverage, making a return to the prewar status quo unlikely.
— - The Trump administration faces midterm pressure to lower US gasoline prices, which have surpassed $5 a gallon due to the strait’s closure.
Source: Foreign Policy
