Rubio rejects Iran reparation demand as Trump touts deal momentum

WASHINGTON — Secretary of State Marco Rubio said the United States would not pay Iran for war damages, rejecting one of Tehran’s stated conditions for ending the more than eight-month war.

“They're demanding pallets of cash, which the president made clear is not going to happen,” Rubio told reporters after a meeting of the G7 foreign ministers in Paris on Tuesday. 

The top US diplomat also said there is “no need” to return to major combat operations because the Trump administration's sanctions and naval blockade were imposing sufficient costs on the Iranian economy.

Rubio spoke a day after President Donald Trump said there was “positive momentum for a deal” to reopen the Strait of Hormuz and constrain Iran’s nuclear program. After meeting with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani at the White House Monday, Trump told reporters that the war he launched in late February was “effectively over.” 

Qatar and other regional countries have urged Trump not to resume strikes and instead pursue a diplomatic settlement. Iran’s stated conditions for a deal include the lifting of the US naval blockade and sanctions, the release of billions of dollars in frozen assets and reparations for the damage caused by the monthslong US-Israeli bombardment. 

In April, Iran’s government estimated the country had sustained at least $270 billion in direct and indirect damage since the start of the war, equivalent to about more than half its GDP. 

“We're not going to pay,” Rubio said. “Iran is demanding reparations. They should be the ones paying reparations because they're the ones that have destabilized the region.”

The short-lived memorandum of understanding reached between the two countries in June did not directly require the United States to compensate Iran. It instead outlined immediate relief from US restrictions on Iranian oil sales, the release of Tehran’s frozen assets upon the deal’s implementation and the removal of sweeping sanctions as part of a final settlement.

Any transfer of funds to Iran is politically fraught for Rubio and Trump, who blasted former President Barack Obama’s $1.7 billion payment to Iran in 2016, a portion of which was loaded onto wooden pallets and flown to Tehran. Officially, the release of funds settled a decades-old debt over undelivered military equipment to Iran but was widely understood as a concession to secure the release of four detained Americans.  

Iran is estimated to have over $100 billion held in accounts across countries including India, Qatar, Iraq and Japan, the bulk of which accumulated after Trump withdrew from the nuclear deal in 2018 and reimposed sweeping sanctions.