How Donald Trump's Oil Waiver Gave Iran $6 Billion

In the wake of the Hamas attack against Israel, some Republicans said that the Biden administration helped play a role in the violence by unfreezing $6 billion of Iranian oil money in exchange for the release of five American hostages.

The accusation, which has been dismissed by Secretary of State Antony Blinken and the White House National Security Council (NSC), said the Biden administration's decision to free up $6 billion in frozen money so it can be moved from countries such as South Korea allowed Iran, a supporter of the Islamist militant group, to help Hamas orchestrate the attack.

However, the frozen $6 billion had originated in a decision made by Donald Trump during his time in the White House.

In 2018, Trump granted eight countries, including South Korea, a waiver that allowed them to continue purchasing oil from Iran even after the U.S. imposed sanctions on the Gulf nation after Trump abandoned the Iran nuclear deal as he took a much tougher line against Tehran than predecessor Barack Obama.

This tough line later included the January 2020 assassination of Qassem Soleimani, the head of Iran's Quds Force. Trump then threatened to strike 52 Iranian sites if U.S. assets were targeted.

The 2018 deal meant South Korea held $6 billion in Iranian funds, which were then frozen in 2019 after the Trump administration imposed further sanctions on Iran.

Last month, the Biden administration confirmed that a deal had been struck to free five American hostages in Iran. The deal saw five Iranian prisoners released in exchange, as well as the $6 billion in frozen Iranian assets held in South Korea being freed and transferred to an account in Doha, Qatar, where Iran has not yet accessed it.

Trump and several other Republicans suggested Iran used the $6 billion to fund the group designated a terrorist organization by the United States and the European Union.

The former president even appeared to suggest that the $6 billion figure was "taxpayer dollars" being given to Hamas by Iran rather than the proceeds of Iran's own oil sales.

On Saturday, soon after Hamas began its attack, the White House National Security Council said the money in question hasn't been accessed by Iran, and even then can only be used for humanitarian purposes.

"Not a single cent from these funds has been spent, and when it is spent, it can only be spent on things like food and medicine for the Iranian people," a spokeswoman for the NSC, Adrienne Watson, said. "These funds have absolutely nothing to do with the horrific attacks today, and this is not the time to spread disinformation."

A similar reassurance was also made by Blinken during an interview on ABC's This Week.

"Not a single dollar from that account has actually been spent to date," Blinken said. "And in any event, it's very carefully and closely regulated by the Treasury Department to make sure that it's only used for food, for medicine, for medical equipment."

Ali Vaez, the International Crisis Group's Iran project director, also rejected suggestions that Iran has accessed the $6 billion in unfrozen South Korean funds.

Then-President Donald Trump signs a document reinstating sanctions against Iran on May 8, 2018, in Washington, D.C. Trump claimed the Biden administration assisted Hamas' attack Israel by unfreezing $6 billion of Iranian oil money. SAUL LOEB/AFP/Getty Images

"All the U.S. has done is basically moved restricted assets that Iran had in South Korea to restricted asset and restricted accounts in Doha, through which Iran can only submit requests," Vaez told Newsweek.

"The U.S. actually has oversight over every single order that Iran submits to," Vaez added. "It can veto them. It can freeze the funds again. So, this is a deal that is 100 percent in the interest of the United States."

Critics, however, say the fact that Iran knows it will have access to that $6 billion allows it to free up other funds to spend.

The $6 billion prisoner swap was already heavily criticized by Republicans, with South Carolina Senator Lindsey Graham suggesting in a September 12 post on X, formerly Twitter, that it could "entice rogue regimes, like Iran, to take even more Americans hostage."

The prisoner swap deal has been brought back into the spotlight by several Republicans taking swipes at Biden.

In a Saturday post on Truth Social, Trump wrote: "These Hamas attacks are a disgrace and Israel has every right to defend itself with overwhelming force. Sadly, American taxpayer dollars helped fund these attacks, which many reports are saying came from the Biden Administration."

House Majority Leader Steve Scalise, one of two confirmed candidates for the vacant House speaker role, wrote on X on October 7: "The Biden Administration must be held accountable for its appeasement of these Hamas terrorists, including handing over billions of dollars to them and their Iranian backers."

Update 10/12/23, 12:30 p.m. ET: This article was updated with further background information.