U.S. Must Pressure Qatar Not to Release Frozen Iranian Oil Revenues

Iranian Supreme Leader Ayatollah Khamenei thrust a long-simmering hostage controversy into the headlines on February 19. Speaking with Qatari Emir Sheikh Tamim bin Hamad Al Thani in Tehran, Khamenei requested that Doha release $6 billion frozen in a Qatari bank that the Biden administration unblocked in 2023 as ransom in exchange for American citizens imprisoned in Iran. After extolling Qatar as “a friendly and brotherly country” despite “unresolved issues,” the supreme leader encouraged Sheikh Tamim to sidestep the Trump administration’s maximum pressure campaign and open the faucet.

Hamas’s October 7 Atrocities Led to the Deal’s Suspension

The previous Trump administration froze approximately $6 billion of South Korean payments for Iranian oil in 2018 as part of its maximum pressure campaign. The payments remained frozen in Seoul until 2023, when the Biden administration agreed to release the money in exchange for five American citizens incarcerated in Iran on spurious charges. The Qatari-brokered arrangement involved moving the funds from South Korea to the Qatar Central Bank, from where Iran could tap the money solely for humanitarian purchases. The money was deposited in euros into six bank accounts in Qatar. 

Despite Tehran’s history of exploiting humanitarian funds to finance its illicit activities, in September 2023, the U.S. Treasury established a humanitarian channel “designed to support the Iranian people’s access to food, agricultural goods, medicine, and medical devices under stringent due diligence measures that guard against money laundering, misuse, and evasion of U.S. sanctions.” However, the United States and Qatar suspended this financial arrangement after Iran’s Palestinian proxy, Hamas, carried out its mass atrocities in Israel on October 7, 2023.

Then National Security Council spokesman John Kirby offered assurances that “every single dime of that money is still sitting in the Qatari bank” and that the Biden administration was “watching it very, very closely.” Kirby did not provide details about the understanding that Washington and Doha reached to prevent Hamas’s main sponsor from accessing the funds. Moreover, Qatar has its own close relationship with Hamas, second only to Iran’s. Doha has provided Hamas-run Gaza with hundreds of millions of dollars annually, as well as hosting Hamas’s senior leadership and amplifying Hamas propaganda on its state-run Al Jazeera Media Network.

Doha Enriches the Islamic Republic

Despite initially yielding to U.S. pressure to halt the movement of these funds, Doha and Tehran have been working to find a way to facilitate the transaction. Following Iranian President Masoud Pezeshkian’s announcement that the two countries had reached an “understanding” regarding the funds in October 2024, the head of the Iran-Qatar Joint Chamber of Commerce proposed the creation of a joint financial institution to facilitate the transfer of funds.

Doha opposed the first U.S. maximum pressure campaign and has channeled funds to the Islamic Revolutionary Guard Corps (IRGC), a designated U.S. terrorist organization. Following Israel’s revelation that Doha had funded the IRGC, the State Department launched a 2019 inquiry into Qatar’s potential role in financing the terrorist entity. Former Iranian President Mahmoud Ahmadinejad also admitted in 2021 that Doha paid $57 million in ransom to release 57 IRGC fighters who had been captured by an armed group in Syria in 2012.

Block Tehran’s Access to Funds

Struggling to revive its faltering economy, Tehran has turned to hostage-taking and extortion as leverage to unlock financial resources, fueling its nuclear program, ballistic missile development, and global terror network. Most recently, Tehran detained a British couple and an Italian journalist on fabricated charges to use as bargaining chips with London and Rome. The Trump administration’s decision to alter or revoke sanction waivers should ensure that Iran is denied the funds it seeks. As for Qatar, the present moment is an opportunity for Doha to prove itself deserving of its Major Non-NATO Ally status by ceasing its support for Tehran’s malign ambitions.

Natalie Ecanow and Janatan Sayeh are research analysts at the Foundation for Defense of Democracies (FDD). For more analysis from Natalie, Janatan, and FDD, please subscribe HERE. Follow Natalie on X @NatalieEcanow, Janatan @JanatanSayeh, and FDD @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on foreign policy and national security.