Biden under pressure to refreeze $6bn in Iranian oil money after Hamas attack

Joe Biden is under pressure from fellow Democrats to refreeze $6bn of Iranian oil revenues released last month as part of a prisoner exchange deal amid accusations that Iran played a key role in last weekend’s deadly attack on Israel by the Palestinian group Hamas.

Five Democratic senators up for re-election next year have joined Republican calls for the US president to effectively renege on the agreement that led to the release of five Americans held captive by Iran unless it is proved that the country’s theocratic regime was not involved in Saturday’s assault, which killed more than 1,000 Israelis.

The clamor comes even as American intelligence sources have sought to dampen speculation of close Iranian involvement.

Although the White House has accused Tehran of being “broadly complicit” due to its long-term financial and logistical support for Hamas, US officials have said multiple pieces of intelligence indicate that Iran’s leadership had no prior knowledge of the devastating onslaught launched from Gaza, and that it may have caught them by surprise.

That has failed to reassure some Democrats gearing up for tough challenges from Republicans in 2024.

“Until I have full confidence that Iran did not play a role in these barbaric terrorist attacks on the Israeli people, the United States should freeze the $6bn dollars in Iranian assets,” wrote Tammy Baldwin, a senator for Wisconsin, on X, the platform formerly called Twitter.

Four other Democrats in the Senate have so far echoed the call. They are Joe Manchin of West Virginia, Jon Tester of Montana, Jacky Rosen of Nevada and Bob Casey, senator for of Pennsylvania.

“I wasn’t supportive of the initial $6bn transfer,” Manchin, a known moderate with a track record of mirroring Republican positions, told reporters. “We should absolutely freeze these Iranian assets while we also consider additional sanctions.”

Last month’s unfreezing of revenues from oil sold by Iran to South Korea – originally frozen by the Trump administration in 2019 due to sanctions imposed under its “maximum pressure” policy towards Tehran – had already been fiercely criticised by Republicans, who claimed it projected weakness and said the funds could be diverted to finance terrorism.

After Saturday’s attack, Donald Trump, the former president and 2024 Republican frontrunner, intensified that criticism by falsely portraying the money freed in exchange for releasing the five prisoners as “US taxpayers dollars”, which he said had helped fund the Hamas assault.

The White House dismissed the claim as “total lies” and “disinformation”.

Administration officials say the funds, which were released to a bank account in Qatar, have not been touched since they were unfrozen. They were released on condition that they were used only for humanitarian purposes, such as buying medicines and medical equipment.

Janet Yellen, the US treasury secretary, speaking at the annual meetings of the IMF and World Bank in the Moroccan city of Marrakesh, said the administration could reverse the decision to unfreeze the money if evidence of Iran’s involvement emerged.

Republicans have voiced scepticism over the intelligence notes of caution about an Iranian hand, even though they have been echoed in some Israeli quarters.

Don Bacon, a Republican senator for Nebraska, accused the Biden administration of being “in denial” about Iran’s role, while South Carolina senator, a candidate for the Republican presidential nominee, said Biden had “blood on his hands”.