ISLAMABAD — The United States and Iran are preparing for a second round of talks aimed at ending their conflict, with the release of Tehran's frozen assets overseas emerging as the central issue in negotiations. The current ceasefire between the two countries is set to expire in the early hours of April 22.

Official Iranian reports and experts estimate that Iran holds more than $100 billion in frozen assets overseas. Tehran's key demand in the ceasefire talks is the release of at least $6 billion of those assets as a confidence-building measure. Frederic Schneider, a nonresident senior fellow at the Middle East Council on Global Affairs, said the frozen assets amount to about four times Iran's annual hydrocarbon revenues. "This is a very substantial sum, especially for a society that has been suffering under decades of US-led sanctions," Schneider said.

On April 10, Speaker of Iran's parliament Mohammad Bagher Ghalibaf posted on X that Iranian frozen assets must be released before negotiations could begin. The following day, reports emerged that the U.S. had agreed to unfreeze some Iranian assets held outside the country, but the U.S. government dismissed those reports, stating that the assets remained frozen.

He said it remains unclear whether the U.S. would condition the release of assets on their use. "Iran definitely has a dire need for the assets but given the very chaotic history of sanctions and the lack of specialists on the US side to negotiate the details, Iran is sceptical," he added.

Sanctions on Iran date to 1979, when the first freeze of Iranian assets took place after Iranian students held 66 American citizens hostage at the U.S. embassy in Tehran following the Islamic revolution, according to U.S. government archives. The 1981 Algiers Accords, brokered by Algeria, resulted in the U.S. unfreezing a portion of those assets in return for Iran releasing 52 American captives. Subsequent sanctions targeted Iran's nuclear and ballistic missile programs, restricting its ability to access revenues from oil sales frozen in foreign banks.

In 2015, Iran and world powers negotiated the Joint Comprehensive Plan of Action under President Barack Obama, under which Iran agreed to scale down its nuclear program and regained access to most of its assets abroad. In 2018, Washington withdrew from the pact and reimposed sanctions, freezing Iran's foreign assets once again.

In 2023, the U.S. and Iran agreed to a prisoner swap under which Iran released five U.S.-Iranian citizens in exchange for the release of several Iranians and Iran's access to $6 billion in oil revenue that had been frozen in South Korea due to U.S. sanctions. Those funds were transferred to Qatar for oversight.