President Trump says damages will be paid for by Iranian money that the US has ‘in its possession, and controls’.

United States President Donald Trump has pledged to use frozen Iranian assets to pay for any damage to ships and cargo in the Strait of Hormuz, garnering strong condemnation from Tehran.

Tensions between Iran and the US have escalated since the beginning of July as the two sides trade attacks and Tehran targets US military bases in the region.

Washington completed its 13th consecutive night of strikes on Iran late on Thursday, with Trump saying he is considering a “massive attack” on the country, “bigger than ever before”.

Writing on his Truth Social platform on Thursday, Trump said that damages would be paid for by “Iranian Money that the United States has in its possession, and controls”.

“These damages may be very substantial but, nevertheless, this is the fair and equitable thing to do,” Trump added.

Iranian Foreign Minister Abbas Araghchi condemned Trump’s comments and said in a post on X on Friday morning that seizing another country’s assets to “pay for unrelated future claims is an incendiary precedent”.

“Those who celebrate or profit from such funds should remember: once governments normalise confiscation, no one’s assets are safe. Ensuing chaos will not be pretty or peaceful,” he added.

The case of Iran’s frozen assets has been an issue that the two sides had been discussing in the now-collapsed memorandum of understanding (MoU) agreement that was signed between Tehran and Washington in June as a pathway to end the war.

But the US and other governments have “frozen” Iranian assets for decades.

While the exact amount of frozen money belonging to Iran is not known, some estimates put it at about $100bn.

Washington first froze Iranian funds in 1979 after US citizens were taken hostage at the US embassy in Tehran.

At the same time, Trump pledged “major military punishment” for Iran and its Houthi allies on Thursday after the Yemeni fighters struck two Saudi oil tankers in the Red Sea.

But on Friday morning, the Iranian army announced in a statement carried by the state Mehr News Agency that it had launched a new wave of drone attacks on US military installations in Bahrain and Jordan.

Moreover, ship tracking data seen by the Reuters news agency found that the number of tankers crossing the Strait of Hormuz fell to just one on Thursday, the lowest level since May 7.