ISLAMABAD: In a major diplomatic breakthrough just hours before high-stakes negotiations begin here, the United States has agreed to unfreeze billions of dollars in Iranian assets held in Qatar and other foreign banks.

The move marks a significant concession by Washington, effectively yielding to a core Iranian demand ahead of any formal talks.

According to sources familiar with the discussions, the asset release is directly linked to guarantees for safe passage of oil tankers through the Strait of Hormuz.

Tehran has long conditioned unrestricted tanker traffic on the unlocking of these funds, which have remained frozen under layers of international sanctions.

The total value of Iran’s frozen assets abroad exceeds 100 billion dollars, with roughly six billion dollars specifically parked in restricted Qatari accounts since a 2023 prisoner swap.

That earlier tranche, originally transferred from South Korean banks, has sat untouched amid subsequent regional tensions.

Recent maritime data shows the strategic stakes involved.

The Strait of Hormuz handles an average of 20.3 million barrels of crude oil and petroleum products daily, accounting for nearly 25 percent of global seaborne oil trade.

Disruptions in recent weeks, triggered by heightened conflict, saw up to 95 percent of normal vessel traffic diverted or halted.

Oil prices surged globally as a result, underscoring the waterway’s chokehold on energy markets.

Analysts estimate that full closure or even selective tolls imposed by Iran could add tens of dollars per barrel to international crude benchmarks within days.

The timing of the US decision appears calibrated to de-escalate precisely these risks.

Iranian officials have described the unfreezing as a demonstration of American seriousness ahead of the Islamabad summit.

Pakistan, as host, has invested significant diplomatic capital in facilitating the dialogue.

Security across the capital has been tightened with army and paramilitary units deployed, while a two-day public holiday cleared streets for the delegations.

The talks, scheduled to open this weekend, are expected to address not only the asset release but also broader ceasefire implementation following six weeks of intense regional hostilities.

US intelligence assessments earlier warned that Iran was unlikely to ease its Hormuz posture without tangible sanctions relief.

The current agreement appears to test that assessment in real time.

Global shipping firms have already sought urgent clarification on new transit protocols.

Under the emerging understanding, vessels would coordinate entry and exit north and south of Larak Island with Iranian naval authorities.

Qatar, which holds the largest single tranche of accessible Iranian funds, has maintained quiet but firm oversight of the accounts.

The Gulf state’s central bank has enforced strict humanitarian-use conditions since the 2023 transfer.

Yet the broader pool of frozen assets spans multiple jurisdictions, complicating any full release.

Experts note that gradual unfreezing aligns with Washington’s strategy of measured concessions rather than blanket sanctions relief.

The approach mirrors past interim deals under the Joint Comprehensive Plan of Action framework, though current talks operate outside that structure.

Regional media in Pakistan and the Gulf have amplified the development, framing it as a potential turning point for energy security.

International outlets including Reuters have corroborated the asset agreement through senior Iranian and Western sources.

Market reaction has been swift, with oil futures dropping nearly 15 percent in early trading on news of the concession and impending Islamabad discussions.

The development carries profound implications for global supply chains.

Asia, which imports over 70 percent of its crude through the strait, stands to benefit most from restored safe passage.

European and American refiners, already grappling with elevated prices, could see relief within weeks if tankers resume normal schedules.

Pakistan’s role as neutral venue has drawn praise from both sides.

Prime Minister Shehbaz Sharif’s invitation followed direct mediation efforts that helped broker the initial two-week ceasefire.

Local diplomatic circles view the hosting as a rare opportunity to elevate Pakistan’s stature in Middle East peacemaking.

Yet challenges remain substantial.

Deep mistrust persists after weeks of strikes and proxy confrontations that killed thousands across multiple countries.

Iranian demands extend beyond assets to include broader sanctions relief and security guarantees.

US negotiators, led by senior State Department officials, are expected to press for verifiable limits on regional proxy activities.

The asset unfreezing serves as an initial confidence-building measure.

Whether it unlocks broader agreement will become clear in the coming days of closed-door sessions in Islamabad.

For now, the move has already eased immediate pressure on global energy markets and opened a narrow window for sustained diplomacy.