September 11, 2015 | Memo

Iran’s Mysterious Shrinking Reserves: Estimating the Value of Tehran’s Foreign Assets

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A close review of the Iran nuclear agreement, the Joint Comprehensive Plan of Action (JCPOA), has exposed a major divergence between estimates of the Iranian government’s assets held abroad. A clear valuation of these assets is critical to understanding some of the short-term and long-term economic implications of the agreement and the resources Iran’s government might have available to support the domestic economy, its regional partners like Syria, and its terrorist proxies like Hezbollah. We estimate that the Iranian government has about $90-$120 billion in foreign assets, of which $40-$60 billion is held in oil escrow accounts.

Despite prior estimates that Iran had foreign reserves of well over $100 billion that could be unlocked by sanctions relief,[1] U.S. and Iranian officials now suggest that these assets are much smaller in volume, and that many are already allocated to international projects or belong to private companies and banks. The implication of this lower valuation is that the value of new funds available to support Iran’s regional or domestic priorities is much smaller. We believe that an accurate and objective understanding of the value of Tehran’s assets held abroad is useful for policymakers to assess the deal and the economic benefits to Iran that will arise from it.

In this piece, we review estimates of Iran’s foreign assets, try to identify their key owners, assess some of the liabilities Iran may have accrued, and highlight how the release of funds from escrow accounts and other frozen accounts is likely to affect Iranian economic growth and resilience. We have focused our analysis on oil revenues held in escrow as a result of the “February 6” provision of the Iran Threat Reduction Act of 2012, which requires purchasers of Iranian oil to deposit revenues owed to Tehran as payment in escrow accounts starting on February 6, 2013. We also update our estimate of the impact of sanctions relief and other economic consequences of the agreement.

[1] For example, “Iran to Have Access to Over $100 Billion When Deal Implemented: U.S. Officials,” Reuters, July 14, 2015. (

Mark Dubowitz is executive director of the Foundation for Defense of Democracies, where Annie Fixler works as a policy analyst for FDD's Center on Sanctions and Illicit Finance. Follow Mark on Twitter, Facebook, and LinkedIn

Rachel Ziemba leads Roubini Global Economics' Emerging Markets coverage. She has a particular interest in the macroeconomics of oil-exporting nations.