UAE Agrees to Unfreeze Billions in Iranian Oil Revenues Amid De-escalation Efforts
The potential unblocking of Iranian assets in UAE banks signals easing Middle East tensions, impacting sterling and London markets.
According to multiple sources cited by Reuters, the United Arab Emirates (UAE) has agreed to unfreeze billions of dollars in Iranian oil revenues held in foreign banks, a move aimed at halting direct Iranian attacks against the country. However, the UAE Foreign Ministry later denied these reports.
The sources indicated that the UAE's decision involves the release of tens of billions of dollars of Iranian oil income currently frozen due to American sanctions. The move appears motivated by a desire to de-escalate regional tensions and secure lasting peace and stability.
Implications for UK and European Markets
The unfreezing of Iranian assets could have significant repercussions for British and European interests, particularly in London’s financial sector, which closely monitors geopolitical developments that influence oil prices and sterling exchange rates. The potential thaw in US-Iran relations and reduced Middle Eastern hostilities may ease volatility in energy markets, thereby affecting sterling's strength and investor sentiment across European markets.
"The UAE’s foreign policy is guided by principles of promoting de-escalation and reducing regional tensions," one source told Reuters.
Estimates on the amount to be released vary, with some sources citing $10 billion, while others suggest up to $20 billion. The initial tranche, reportedly exceeding $3 billion (around €2.5 billion), has allegedly already been transferred to Tehran. In return, Iran is said to have committed to ceasing missile and drone attacks against the UAE, with the last such attack recorded on May 4, when the port of Fujairah in the Gulf of Oman was targeted.
Despite the initial reports, the UAE’s Ministry of Foreign Affairs categorically denied any unfreezing of Iranian funds. Afra Al-Hameli, Director of the Strategic Communications Department at the UAE Foreign Ministry, stated that the claims are "completely false and unfounded," emphasizing that no Iranian assets have been released or transferred via the UAE.
Reuters clarified that it remains unclear whether these assets belong to the UAE itself or represent Iranian funds frozen in the UAE banking system or elsewhere.
Parallel to these developments, the United States and Iran reportedly agreed on the final text of a peace agreement, according to Pakistan’s Prime Minister Shehbaz Sharif, acting as the main intermediary. US sources indicated an 80-85% likelihood that a peace deal would be signed imminently.
The draft memorandum between the US and Iran, published by the Iranian Mehr news agency, contains 14 points, including an immediate and comprehensive cessation of hostilities, withdrawal of US forces from territories bordering Iran, lifting of the blockade on Iranian ports, and reopening of the Strait of Hormuz within 30 days. Iranian Foreign Minister Abbas Araghchi noted that discussions on Iran’s nuclear program and the lifting of US sanctions would occur in a second, final phase after a 60-day negotiation period focused on ending the conflict.
These developments could impact European and UK energy markets, reducing the risk premium on oil prices associated with Middle East conflicts. The London market, with its significant exposure to commodity trading and financial services, may see improved investor confidence and a potential strengthening of sterling as geopolitical uncertainties diminish.
