TEHRAN— Senior South Korean and Iranian officials spoke by phone on Wednesday to explore methods to restore bilateral relations strained by the problem of Iranian funds frozen in the country, according to Seoul's foreign ministry.

During the phone call, First Vice Foreign Minister Cho Hyun-dong and his Iranian counterpart and chief nuclear negotiator, Ali Bagheri-Kani, discussed the latest developments in negotiations aimed at reviving the 2015 Iran nuclear deal, known as the Joint Comprehensive Plan of Action, as well as other outstanding bilateral issues, according to the ministry.

Bilateral relations are still strained as a result of US$7 billion in Iranian cash held in two Korean banks under U.S. sanctions, which were re-imposed when then-U.S. President Donald Trump withdrew from the nuclear deal in 2018. Tehran has long demanded that Seoul release the funds.

During the talks, Bagheri Kani stated that “urgent bilateral issues” must be resolved as soon as possible, to which Cho responded that the Seoul government will make steps to release the cash and resume oil imports if the Iranian nuclear agreement is restored, according to the ministry.

Officials in Seoul have stated that the fate of the frozen funds is dependent on the outcome of Iran's nuclear discussions with international powers.

Later, Bagheri Kani tweeted, “In the phone call with Mr. Cho Hyun-dong, the First Vice Foreign Minister of (South) Korea, I emphasized that the government/people of Iran expect the new Korean government to immediately release the foreign exchange resources of Iran in Korean banks in order to provide a basis for improving the relations between the two countries. The Korean side stated that Seoul is seriously looking for a way to solve this problem.”