The United States is weighing a new proposal to use Iranian assets to compensate Gulf allies for damage caused by attacks linked to Iran, according to a Reuters report. The plan could allow funds to be redirected not only for future rebuilding efforts but also to cover losses already suffered by partner countries.

US Treasury Secretary Scott Bessent has reportedly asked officials to assess the financial cost of past damage in Gulf nations and explore whether Iranian assets could be used to pay for it. While details remain unclear, the proposal may go beyond assets currently frozen by Washington, potentially widening its scope.

The development comes soon after Iran launched attacks targeting Kuwait and Bahrain, adding fresh strain to already tense relations. Tehran has long demanded access to billions of dollars in funds held abroad, making this proposal a sensitive issue that could complicate ongoing diplomatic talks.

Why is the US considering using Iranian assets?

The idea is aimed at supporting Gulf allies that have faced damage from attacks allegedly linked to Iran. By using Iranian funds, Washington may try to shift the financial burden away from its partners while increasing pressure on Tehran.

What triggered the latest escalation between the US and Iran?

Tensions escalated after US forces carried out strikes on Iranian radar sites in Goruk and Qeshm Island, located along the strategic Strait of Hormuz. The US said the action followed the interception of Iranian drones seen as a threat to maritime traffic.

In response, Iran fired missiles toward US bases in Kuwait and Bahrain. Kuwaiti officials reported that several ballistic missiles passed over populated areas, causing damage but no casualties. Bahrain activated emergency sirens and urged residents to take shelter. The US military said most of the missiles were intercepted.

First published on: Jun 07, 2026 09:59 AM IST

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