Analysts say that it is difficult for the US to tighten sanctions on Iranian oil after the attack on Israel, because of concerns about rising oil prices and worsening relations with China.
After Iran attacked Israel last weekend, Republican leaders in the US House of Representatives criticized President Joe Biden for not strictly implementing current sanctions.
Reply Fox News On April 14, congressman Steve Scalise said that this move by the Biden administration has made it easier for Tehran to sell oil, thereby generating revenue “to use for terrorist activities”.
It is expected that this week, US lawmakers will propose a series of bills to tighten sanctions on the Middle Eastern country.
Iran is currently the third largest oil producer in OPEC (Organization of Petroleum Exporting Countries). In 2018, former US President Donald Trump re-imposed sanctions on crude oil to the country. He withdrew the US from the JCPOA nuclear agreement that Washington and Tehran reached in 2015.
Over the past two years, the Biden administration has tried to restore the JCPOA, but has not been successful. They seek to prevent Tehran from circumventing laws to sell oil abroad by punishing businesses in China, the UAE and many other countries.
However, in March, Washington renewed a sanctions regime, allowing Iraq to buy energy from Iran, meaning Tehran had an additional $10 billion in revenue.
After last weekend’s incident, the pressure to punish the Middle Eastern country is putting the Biden administration in a difficult position. They must think of ways to prevent similar attacks without escalating tensions in the region, stopping the rise in oil prices, as well as affecting China – the largest buyer of Iranian oil.
Crude oil is being transferred between two oil tankers flying the flags of Iran and Liberia off the coast of Greece. Image: Reuters
For many months, Washington has affirmed that its basic goal is to prevent the conflict in the Gaza Strip between Hamas and Israeli forces from spreading in the region. The main purpose is to block the Middle Eastern country from participating in this.
Currently, some analysts doubt Biden’s ability to make strong moves to tighten sanctions on Iran’s crude oil exports. Because this is the lifeblood of this economy.
“In case sanctions bills are passed, it will be difficult for the US government to strictly implement them,” said Scott Modell – CEO of Rapidan Energy Group. Reuters.
Rapidan estimates the country’s oil exports at about 1.6-1.8 million barrels a day. This is close to the 2 million barrels they reached before sanctions, Modell said.
The ability to influence gasoline and oil prices is one of the reasons why Mr. Biden is hesitant. Kimberly Donovan – an expert at the Atlantic Council policy consulting organization, said that it will be difficult for the government to tighten sanctions after Iran attacks Israel, because it is worried that this will drive up oil prices.
“Oil and gasoline prices are very important in an election year,” she said. Later this year, the US presidential election will take place.
A US State Department spokesperson confirmed that the Biden administration has not lifted any sanctions on the Middle Eastern country and will increase pressure on the country. “Our strict sanctions remain in place,” the person said.
In addition, tightening sanctions could also threaten US-China relations. In fact, relations between the two countries have deteriorated over the past few years due to a series of political, trade and technological issues. Recently, US and Chinese leaders have sought to improve this.
China is currently the largest buyer of Iranian oil, with 1.11 million barrels of crude oil per day by 2023, according to estimates by data firm Vortexa Analytics. This number is equivalent to nearly 90% of Tehran’s exports and 10% of the Beijing government’s oil imports.
If Washington takes measures to reduce Iran’s oil exports, this will appease Israel and prevent tensions from escalating. However, they will have to punish major Chinese financial institutions and entities involved in the transaction.
“If they really want to tighten sanctions, the US must take strong action against China. But are they willing to do what the current administration has not done and even Trump has not done?”, a close source said. close said above Reuters.
Jon Alterman – analyst at the Center for International and Strategic Studies (CSIS) said that Washington is subject to many limitations when it wants to impose more sanctions and those who want to circumvent the law are also very good at finding loopholes.
“I think the US will take measures to force the Middle Eastern country to bear the economic consequences. But the Biden administration is unlikely to completely cut off the country’s oil exports,” he said.