President Donald Trump says damage to ships and cargo in the Iran crisis should be paid for with Iranian money held by the United States, turning the fight over Hormuz shipping into a dispute over frozen assets as well as missiles and tankers.
The statement is a new escalation in Washington’s pressure campaign. It came as U.S. strikes against Iran entered a 13th consecutive night, Iran and its allies continued threatening regional shipping routes, and Tehran warned that using another country’s assets for future claims would set a dangerous precedent.
CBS News reported that Trump said “any and all damages” to ships, cargo, or related property would be paid from Iranian money controlled by the United States. TIME also reported the threat, noting that the assets had previously been tied to talks over a U.S.-Iran memorandum of understanding before the latest collapse in diplomacy.
The exact legal mechanism was not immediately clear. Billions of dollars in Iranian assets have been frozen under U.S. sanctions, but turning those funds into compensation for commercial ship damage would likely trigger legal, diplomatic, and financial fights well beyond the immediate battlefield.
Iran calls it an incendiary precedent
Iranian Foreign Minister Abbas Araghchi rejected the idea Friday, warning that confiscating sovereign assets for unrelated or future claims would endanger the wider international financial system.
Military.com quoted Araghchi as saying that “once governments normalize confiscation, no one’s assets are safe” and that the resulting chaos would not be “pretty or peaceful.” Anadolu Agency reported the same warning, saying Tehran framed Trump’s proposal as a dangerous precedent rather than a narrow wartime compensation move.
That response matters because Iran has already made control of the Strait of Hormuz a central issue in any ceasefire or shipping deal. If Washington now ties ship damage directly to frozen Iranian funds, the asset question could become another sticking point in talks that are already stalled.
The shipping war is widening
The threat also lands against a worsening maritime backdrop. U.S. Central Command said the latest U.S. strikes were aimed at reducing Iran’s ability to threaten civilian mariners and commercial vessels in regional waters. Iranian state media reported blasts in areas including Bandar Abbas and Qeshm Island, both tied to the strategic waterway.
At the same time, Yemen’s Iran-backed Houthis have threatened or attacked Saudi-linked shipping in the Red Sea, raising fears that pressure on the Strait of Hormuz could now spread to another major chokepoint near the Bab el-Mandeb Strait.
For oil markets, insurers, and shipping companies, the frozen-assets threat is more than political theater. It suggests Washington may try to make Iran financially liable for damage connected to maritime attacks, while Tehran may treat that as proof the United States is expanding the war into economic confiscation.
The result is a sharper, more complicated crisis: U.S. airstrikes, Iranian retaliation claims, Houthi pressure in the Red Sea, and now a fight over whether frozen Iranian funds can be used to pay for damaged ships. That is not a ceasefire track. It is another layer of escalation.