Iranian Foreign Minister Seyed Abbas Araghchi has sharply criticised US President Donald Trump’s announcement that Washington will use Iranian assets under its control to compensate for damages to ships and cargo in West Asia.

Araghchi described the move as an “incendiary precedent” that undermines international norms and threatens global stability. He warned that once governments normalise confiscation of foreign assets, no nation’s holdings would remain secure, and the resulting chaos would be neither peaceful nor manageable.

Trump had earlier declared on Truth Social that any damages to ships, cargo, or related maritime assets would be paid for using Iranian money held by the United States. He acknowledged that such damages could be “very substantial” but insisted that the measure was “the fair and equitable thing to do.”

His statement followed an attack in the Red Sea, where Yemen’s Houthi rebels claimed responsibility for targeting two Saudi oil tankers, ENCELIA and LAYLA. The Saudi Press Agency confirmed that ENCELIA was struck while transiting the Bab el-Mandeb Strait, causing a fire at the bow of the vessel.

Iran itself has been accused of targeting commercial vessels in the Strait of Hormuz for non-compliance, further escalating tensions in the region. Trump later warned that Washington would hold Tehran directly accountable if the Houthis carried out additional attacks on maritime shipping.

This stance reflects the administration’s broader policy of linking Iran to destabilising activities across West Asia, despite the Houthis’ independent claims of responsibility.

The issue of frozen Iranian assets has long been contentious. The lifting of sanctions on these funds was a major demand from Tehran during the memorandum of understanding reached with Washington in June, though that agreement has since collapsed.

According to CNN, the precise value of Iran’s blocked assets remains uncertain, as they are distributed across multiple financial systems worldwide. Estimates from Iranian media and analysts place the total between $124 billion and $167 billion, underscoring the scale of resources at stake.

Araghchi’s remarks highlight the diplomatic fallout of Trump’s policy, which Tehran views as unlawful confiscation. The decision risks setting a precedent that could affect other nations with assets frozen abroad, potentially destabilising the global financial system.

The controversy comes amid heightened maritime insecurity, with both state and non-state actors targeting vessels in strategic waterways such as the Red Sea and the Strait of Hormuz.

The combination of rebel attacks, US retaliatory measures, and Iran’s own maritime actions has created a volatile environment with significant implications for global trade and energy flows.

ANI