A major turning point in the Gulf situation? The UAE is reportedly set to unfreeze ten billion dollars for Iran in exchange for a pledge to stop attacks.

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Media reports from Friday, June 12th Eastern Time indicated that the UAE and Iran are secretly advancing a multi-billion dollar funding arrangement.

Citing sources, the media reported that the UAE had agreed to unlock large-scale funds for Iran, with the first tranche of about $3 billion already transferred. This move is seen as a signal of a major turning point in the Gulf region's situation.

According to the report, two sources from the Gulf region said the total amount of funds the UAE agreed to unlock is $10 billion. Another two people familiar with the arrangements put the total at $20 billion, adding that the background for this move is Iran's promise to stop armed attacks against the UAE. One insider said the initial $3 billion has already arrived.

The media was unable to verify whether these funds belonged to UAE state assets or were Iranian deposits that had been frozen in the UAE banking system for years. UAE officials did not deny the arrangement when responding to the media, stating that their country's foreign policy centers on promoting regional de-escalation and easing tensions, and supports efforts by all parties, including the United States, to protect people in the region from conflict.

Also on Friday, US Vice President Vance stated on social media that the Trump administration would not unfreeze Iranian funds due to any agreements signed between Iran and the US, and any economic benefit must be based on Iran fulfilling its obligations. Neither the White House nor the Iranian government responded to the UAE's arrangement. However, news from the previous day indeed reflected progress in Middle Eastern countries seeking to ease relations with Iran.

According to Thursday's report, this week, senior national security officials from the UAE and Iran held their first high-level talks since the US-Israeli military operation against Iran at the end of February, discussing ways to ease tensions and restore senior communication. Friday's report further uncovered the substantive financial arrangements behind the UAE-Iran contacts.

Origin of Negotiations: Visit by Iranian Military Officials to Abu Dhabi Marks Key Turning Point

According to Friday's report, negotiations between the UAE and Iran have been underway for several weeks but sped up significantly after a high-level meeting.

Last week, officials from Iran's Islamic Revolutionary Guard Corps visited Abu Dhabi, met with the UAE National Security Advisor and Abu Dhabi's Deputy Ruler Sheikh Tahnoun bin Zayed al Nahyan, and stayed at his residence. Afterwards, UAE officials went to Tehran to negotiate the specific mechanism for fund transfers.

A source familiar with the arrangements described the strategic logic: Iran can claim it received compensation for war losses, Washington can insist it did not directly pay, Abu Dhabi can secure its safety, and Dubai can preserve its status as a global business hub. The entire arrangement is packaged as an investment to rebuild regional trust.

The source also pointed out that Iran has proposed similar arrangements to at least two other Gulf Arab countries.

Dubai's Financial System: Complex Funding Background

Behind this funding arrangement lies Dubai’s unique role as Iran’s important economic lifeline.

The media noted that Dubai’s banking system has long held large amounts of Iranian-related deposits, most of which were frozen under the US sanctions regime. US control of the global dollar clearing system means any foreign bank dealing with sanctioned Iranian entities faces the risk of being cut off from the dollar network.

The media still cannot determine whether the funds involved in this arrangement come from the UAE’s own assets or originally frozen Iranian assets in the UAE or other banks.

Previously, broader US-Iran negotiations also involved unfreezing billions of dollars in Iranian oil revenues. In April this year, a senior Iranian source told the media that the US had agreed to release Iranian frozen assets in Qatar and other foreign banks, but US officials quickly denied it.

Shadow of Attacks: The Price Paid by the UAE

This arrangement was reached in the context of ongoing Iranian attacks on the UAE, making the turnaround particularly notable.

According to reports, Iran’s last known direct attack on the UAE occurred on May 4, targeting the port of Fujairah in the Gulf of Oman. During the war, Iran’s missile and drone attacks caused Dubai hotel occupancy rates to plummet, forced foreign nationals to leave, and severely damaged the city's security reputation upon which it relies.

An article by Wall Street CN on Thursday mentioned that Iranian attacks put pressure on the UAE’s energy, tourism, and financial sectors. After the Barakah nuclear power station in the UAE was attacked by pro-Iranian armed forces, the UAE government once took the most hardline stance among Gulf nations against Iran, even trying to rally Gulf countries for a joint counterattack but failed to get support from Saudi Arabia and Qatar.

As ongoing conflict continuously harms economic and commercial reputation, the UAE’s strategy shifted from applying pressure to damage control.

Gulf Countries' Collective Adjustment: Accelerated Regional Reshaping

The UAE is not the only Gulf country adjusting its Iran policy; the diplomatic landscape in the Gulf is being rapidly reconstructed.

Thursday's report noted that Saudi Arabia resumed foreign minister-level contact with Tehran in early April, while Qatar is increasingly playing the mediator between Washington and Tehran. Reuters also confirmed this trend—Iran has contacted at least two other Gulf Arab countries regarding similar arrangements, indicating that Tehran is systematically seeking to mend post-war relations with its Gulf neighbors.

The UAE's prior diplomatic contacts have laid groundwork. In mid-April, UAE Vice President Sheikh Mansour bin Zayed discussed easing regional tensions with Iranian parliament speaker Qalibaf. Subsequently, UAE Crown Prince Sheikh Khaled bin Mohammed visited Beijing, met with Chinese leaders, and established new communication channels.

All these developments are set against the backdrop of US-Iran negotiations entering a crucial stage. Trump announced on Thursday the cancellation of a planned military strike against Iran for that day and stated that the US-Iran agreement text was basically finalized and could be signed in Europe this weekend.

Analysts believe that as the war comes to an end, regional countries are accelerating their plans for post-war order, and the funding arrangement between the UAE and Iran could become an important element in reshaping the regional landscape.

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