Tehran pushes back on reported US plan for frozen assets

Reuters reported on Saturday, citing a source familiar with the matter, that Washington is considering making frozen Iranian assets available to Persian Gulf partners to help cover future damage allegedly caused by Iran.

The report said the US Treasury is also examining whether the funds could be used to compensate for past losses and has begun assessing costs incurred by Gulf allies. The report has not been confirmed by the Treasury Department.

The sums involved could be substantial. Estimates of frozen Iranian assets vary, but they are widely believed to amount to tens of billions of dollars held abroad, including in countries such as South Korea and Iraq.

President Donald Trump, however, told NBC on Sunday that he would not unfreeze Iranian assets or lift sanctions before a peace agreement is reached.

Al Arabiya reported last week that negotiations over frozen Iranian assets had made progress, though significant differences remained over the mechanism and timing of their release.

'Ridiculous, unacecptable'

Iranian officials reacted sharply to the Reuters report despite the absence of any formal US announcement.

Kazem Gharibabadi, Iran's deputy foreign minister for legal and international affairs, described the reported proposal as a "new act of insolence" in a post on X.

"Iran's assets are not Washington's war booty or a fund for paying its allies," he wrote.

He said any seizure, transfer or allocation of Iranian assets without Tehran's consent would constitute an internationally wrongful act and warned that Iran would respond proportionately.

Gharibabadi also argued that regional governments that allowed their territory and facilities to be used against Iran were themselves complicit and should compensate Iran for damages it has suffered.

Esmail Kowsari, a member of parliament's National Security and Foreign Policy Committee, also rejected the reported proposal.

"The idea is fundamentally ridiculous and unacceptable," he told the conservative website Tabnak. "The United States itself is the main cause of insecurity, tensions and damage in the region and cannot decide the fate of other countries by confiscating the assets of the Iranian nation."

"If compensation is to be paid," he added, "it is the United States that must answer for the heavy human and material losses inflicted on the Iranian people."

'Creditor turned debtor'

The Reuters report received extensive coverage in Iranian media, much of it focused on Tehran's insistence that any release of assets must be genuine, verifiable and free from political conditions.

The IRGC-affiliated Fars News Agency suggested the proposal could be linked to rebuilding US military facilities damaged in Iranian missile and drone attacks during the conflict.

"Iran has repeatedly stated that in its attacks it targeted only American bases and interests in Arab countries," the outlet wrote. "Therefore, it is not unlikely that the Treasury Department intends to use Iran's frozen assets to rebuild US bases that suffered billions of dollars in damage from Iranian missile and drone attacks."

Hardline website Raja News, which opposes negotiations with Washington, used the report to criticize Parliament Speaker Mohammad-Bagher Ghalibaf and supporters of diplomacy with the United States.

"The Iranian people have the right to ask: what kind of 'successful negotiations' were these?" the outlet wrote. "Not only was there no compensation, but the creditor was turned into the debtor, and the country's assets, instead of being released, now stand on the verge of being auctioned off and looted."

The Russian precedent

The debate has prompted comparisons with Western handling of frozen Russian assets following Moscow's 2022 invasion of Ukraine.

While Western governments have used profits generated by frozen Russian sovereign assets to support Ukraine and back international loan packages, they have largely avoided confiscating the underlying assets themselves.

The distinction has become a reference point in legal and political debates over the treatment of other countries' blocked funds, including those belonging to Iran.

Reactions online

Online reactions reflected widespread anger among many Iranian users, underscoring the political sensitivity of frozen assets.

One commenter on the Tabnak website wrote: "The Arabs should compensate Iran for the fighter jets and missiles launched from their territories, not the other way around."

For many Iranians following the negotiations, the prospect that frozen assets could be used to compensate other countries touches a particularly sensitive nerve: money that Tehran sees as its own may ultimately become another battlefield in its dispute with Washington.

In Tehran, the episode triggered a noticeable shift in tone across much of the media landscape. Hardline outlets portrayed Iran's missile strike as proof that its warnings carried weight, while moderates questioned whether diplomacy can survive repeated cycles of escalation.

The shift comes as US President Donald Trump continues to project confidence in negotiations.

After the exchange, Trump publicly urged restraint and sought to keep diplomatic channels alive, while reports emerged that he had warned Israeli Prime Minister Benjamin Netanyahu against steps that could further complicate negotiations.

Yet the events of recent days highlighted how narrow the path to a broader agreement remains.

The immediate trigger was Israel's decision to proceed with strikes in Beirut's southern suburbs despite repeated Iranian warnings that attacks on Dahiyeh would be viewed as a violation of the broader post-war understanding that emerged after the US-Iran ceasefire.

Tehran repeatedly linked stability in Lebanon to the durability of any future understanding with Washington and signalled that attacks on Hezbollah strongholds would not go unanswered.

When Iran responded with a missile strike on Israel, state-affiliated outlets portrayed the move less as an escalation than as the enforcement of a red line. Parliament Speaker Mohammad Bagher Ghalibaf, who has emerged as one of the central figures in Tehran's diplomacy and wartime decision-making, argued that the episode had created a "new reality" and warned that similar responses could follow future violations.

Israel's retaliation the following day reinforced a different lesson: that it was prepared to respond militarily regardless of diplomatic considerations. The result was a brief but significant exchange that left both sides claiming deterrence while simultaneously exposing the fragility of the ceasefire framework.

The media reaction inside Iran reflected these competing interpretations.

Hardline outlets such as Kayhan, Tasnim and state broadcaster IRIB framed the exchange as evidence that Iran's deterrence strategy remained intact despite military pressure and economic sanctions.

Their coverage emphasised resolve, resistance and the need to resist what they described as attempts to impose new realities on Iran and its allies.

Even more moderate publications supported the response to Israel's actions in Lebanon, although their commentary often focused on the risks of miscalculation and the possibility that another cycle of escalation could rapidly overwhelm diplomatic efforts.

This more anxious mood had already been building in recent weeks. Even before the exchange, moderate outlets increasingly reflected concerns about economic exhaustion, public frustration and the country's ability to absorb further instability.

The latest confrontation appeared to reinforce those fears rather than dispel them.

What was striking was the degree to which most voices in Tehran appeared to share a concern: that the current diplomatic opening is far more fragile than many had assumed.

The exchange lasted less than a day. Yet it altered perceptions in Tehran.

For hardliners, it demonstrated that threats still carry weight and that Iran remains willing to defend what it sees as its core regional interests. For more pragmatic voices, it underscored how quickly months of diplomacy can be placed at risk by events on the ground.

The result is a political atmosphere that is simultaneously more defiant and more anxious than it was a week ago—one in which support for negotiations persists, but confidence in their staying power has visibly weakened.

The debate emerged after Iran launched missiles at Israel following Israeli strikes in Beirut's southern suburbs, at a time when negotiations between Tehran and Washington were widely described as nearing an agreement.

Although Iran's Khatam al-Anbiya Central Headquarters announced on Monday that it was halting further strikes, it warned that attacks would resume if Israel targeted either Iran or Lebanon again.

US President Donald Trump called on both sides to halt retaliatory attacks, while Foreign Ministry spokesman Esmail Baghaei said Washington bore "direct responsibility" for any action taken by Israel against Iran.

Speaking to the Revolutionary Guards (IRGC)-linked Tasnim News Agency, an unnamed military source dismissed Washington's lack of public endorsement for Israeli attacks as a "purely propagandistic and deceptive act."

"If the Israelis and Americans believe they can, through 'controlled escalation,' make Iran and the Resistance Front predictable or limit the nature of Iran's response, they are making a foolish mistake," he said.

A new strategic doctrine?

Among the most notable reactions came from Sadegh Larijani, chairman of Iran's Expediency Council.

In a post on X, Larijani described the strike carried out in defense of Lebanon as "the official declaration of a strategic doctrine" and the opening of "a new chapter in defense policy," in which Iran would pursue its regional power through initiative and offensive capability.

Parliament Speaker Mohammad Bagher Ghalibaf, who also heads Iran's negotiating team in talks with Washington, argued that Iran had "overturned the equation of a ceasefire on paper and its repeated violation on the battlefield."

"As long as there is no genuine will for confidence-building, Iran's response will remain the same," he wrote on X.

President Masoud Pezeshkian struck a more measured tone, arguing that diplomacy and deterrence remained complementary rather than contradictory.

"We will firmly defend the rights of the nation and retreat before no threat," he wrote. "Diplomacy and defense are the two wings of national power; we have abandoned neither the battlefield nor the negotiating table."

Media echo the new strategy

Iranian media quickly expanded on that interpretation, arguing that the strike reflected a broader shift in Tehran's deterrence strategy.

Farda News, a website close to Ghalibaf, argued that attacks on Lebanon would no longer be cost-free and that Israeli actions on one front could trigger responses on another. The outlet also interpreted the reported targeting of the Haifa refinery—described by the IRGC as retaliation for attacks on Iran's petrochemical industry—as an example of "strategic symmetry."

"The era of cost-free attacks on the Resistance Front has ended," it wrote.

Other conservative outlets advanced similar arguments. Tabnak, which is considered close to Mohsen Rezaei, an adviser to Iran's supreme leader, argued that Tehran had for the first time retaliated militarily for an Israeli attack on a country other than Iran itself.

Khabar Online described the strike as a redefinition of deterrence equations in the Middle East, while Rouydad24 argued that Tehran was signalling a willingness to expand both the geography and scope of future confrontations.

Several commentators framed the issue not simply as support for Hezbollah but as a test of Iran's credibility with its regional allies. Allowing Hezbollah to be weakened or destroyed without a response, they argued, would undermine decades of Iranian regional strategy and raise questions about the reliability of Tehran's support for its partners.

Mixed reactions online

Public reactions on social media were more divided.

Some users criticized Iran's involvement on behalf of Hezbollah. One commenter wrote that Iran had effectively become "the proxy force of a foreign group called Hezbollah," arguing that resources intended to strengthen Iran's own security were instead being spent defending an ally.

Others focused on the domestic costs of escalation.

"If they hit our water, electricity, refineries and power plants tomorrow, remember that your Revolutionary Guard brothers dragged Iran into war because of Lebanon," one user wrote.

Several users expressed concern that prolonged conflict could make Iran resemble Lebanon, a country long marked by instability and recurring wars.

"I fear the Beirutization of Tehran," one commenter wrote. "I am terrified of the Beirutization of Iran."

Together, the reactions highlighted a widening debate over the costs and benefits of Tehran's regional strategy. While officials and conservative media presented the strike as the emergence of a new deterrence doctrine, many ordinary Iranians appeared more concerned about the risks that such a doctrine could bring at home.

Officials in Khuzestan province said the facility was hit during Israeli attacks, with reports indicating damage to chlorine-related units and storage facilities. Any prolonged disruption could affect both domestic supply chains and exports from one of Iran's most important petrochemical hubs.

Karoon is located in Mahshahr, home to a concentration of petrochemical facilities that form a major pillar of Iran's non-oil economy.

Links to the IRGC

Karoon is owned by Persian Gulf Petrochemical Industries Company (PGPIC), Iran's largest petrochemical holding group.

The United States sanctioned PGPIC and dozens of affiliated companies in 2019, saying the group generated billions of dollars that helped finance the Islamic Revolutionary Guards Corps and its construction arm, Khatam al-Anbiya.

According to the US Treasury, PGPIC subsidiaries worked with Khatam al-Anbiya through engineering, construction and financing contracts worth hundreds of millions of dollars. Washington said revenue from the petrochemical sector provided an important source of funding for the IRGC's military activities.

The Guards have long maintained a significant presence in Iran's energy and industrial sectors through a network of companies, contractors and affiliated organizations that oversee major infrastructure projects and benefit from export revenues.

Role in missile-related industries

Petrochemical facilities are primarily civilian enterprises, but some of their products can have military applications.

Chemical compounds produced in Mahshahr and other petrochemical centers such as Assaluyeh can be used as precursor materials in the production of propellants and other components associated with missile programs.

During previous operations targeting industrial facilities in the Mahshahr area, Israel said sites in the region were involved in producing materials used by Iran's missile program.

Israeli military officials said on Monday that one of their objectives was to destroy infrastructure used to manufacture raw materials essential for ballistic missile production.

The dual-use nature of petrochemical production means facilities can simultaneously support civilian industries while supplying materials that may have military applications.

Critical supplier for domestic industry

Despite scrutiny over military links, Karoon remains one of the most important suppliers to Iran's civilian manufacturing sector.

The company is the region's only producer of isocyanates, advanced chemical compounds used in the production of polyurethane materials.

These products serve as the foundation for a wide range of industrial and consumer goods, including insulation, adhesives, coatings, automotive components, footwear, furniture and household appliances.

Karoon receives feedstock such as benzene and toluene from neighboring petrochemical plants and combines them with chlorine, carbon monoxide and hydrogen to produce isocyanates and related products.

The facility's strategic importance increased after the implementation of the HYCO (Hydrogen and Carbon Monoxide) project, which enabled domestic production of carbon monoxide and hydrogen and reduced dependence on imported supplies.

Impact on supply chains and exports

Industry experts say damage to chlorine production units could have consequences beyond the immediate facility.

Chlorine is essential for the production of phosgene, a key intermediate chemical used in manufacturing isocyanates. Any interruption to chlorine supplies can halt downstream production, affecting multiple industries dependent on polyurethane products.

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  Strikes on petrochemical hubs leave Iran short of plastics

The effects could extend throughout the Mahshahr industrial zone, disrupting manufacturers that rely on Karoon's output.

Karoon also serves export markets. The company ships products including aniline to India and sells other chemical products to customers in Turkey, Russia and neighboring countries.

Those exports have helped Iran maintain a regional presence in specialty chemical markets while generating valuable foreign currency earnings.

A strategic target

The strike illustrates how Iran's petrochemical sector occupies a position at the intersection of economic and security concerns.

For Tehran, facilities such as Karoon support industrial self-sufficiency, exports and employment. For Israel and Western governments, parts of the sector are viewed as supporting broader military and missile-related capabilities through financial links to the IRGC and the production of dual-use materials.

As a result, major petrochemical complexes have become increasingly significant targets in a confrontation that extends well beyond the battlefield and into the infrastructure underpinning Iran's economy and defense industries.

The appearance of Iranian pop singer Gheysar, who has spent nearly four decades living in Los Angeles, at a state-backed religious celebration in Tehran has sparked widespread debate over politics, culture, and the possible return of exiled artists.

The performance took place on Thursday during Eid al-Ghadir celebrations at Imam Hossein Square in central Tehran. The event, which received extensive coverage from official and semi-official media outlets, featured Binesh Bolour, known professionally as Gheysar, who has lived outside Iran for nearly four decades.

In recent years, the Islamic Republic has sought to transform Eid al-Ghadir into a broader national celebration through large-scale public events held in city streets and squares.

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