The deadly violence between Israel and Palestinian militant group Hamas is putting Iranian oil under the microscope.
Republicans in particular are calling for more action to restrict this key source of income for Iran, whose decades-long backing of Hamas has come under renewed scrutiny in the wake of the group’s attack on Israel last weekend.
Former President Trump has sought to use the issue as a cudgel against his likely 2024 rival, accusing President Biden of allowing Iran “to sell massive amounts of oil” while speaking to supporters in Florida.
“Under my leadership, Iran was weak and broke and desperate for love,” Trump said. “And now they’re rich as hell.”
Fellow GOP presidential hopeful Ron DeSantis told Fox News he would “move very quickly to shut off flows of money to Iran, the oil money is a big part for them.”
Rep. Kevin McCarthy (R-Calif.) told NBC the U.S. should “stop Iran from being able to produce the oil.”
He particularly called for sanctions enforcement, saying that sanctions aren’t currently being enforced. The Biden administration has pushed back on such assertions, saying it is enforcing its sanctions against Iran.
Sen. Lindsey Graham (R-S.C.) went even further, telling NewsNation this week that if the conflict escalates, “we should tell the Ayatollah we will destroy your oil refineries and your oil infrastructure.”
Iran has long backed Hamas, a political and military group that governs Gaza and has been designated by the U.S. State Department as a terrorist organization.
However, as of Friday, U.S. officials had not linked Iran to planning the specific attacks Hamas launched on Israel last weekend.
Deputy national security adviser Jon Finer told “Good Morning America” earlier in the week that while “Iran is broadly complicit in these attacks for having supported Hamas going back decades,” there’s currently “no evidence of direct support” for this specific attack.
Iran is a member of a group of major oil-producing countries known as OPEC. In that group, it is the fifth-largest crude oil producer and produced nearly 2.4 million barrels per day of crude oil in 2021.
Oil exports are a significant source of revenue for the country, whose oil companies rake in $40 billion in net oil export revenues in 2021.
Iranian oil production and exports have risen during the Biden administration as compared to the Trump administration, according to experts — though they said U.S. sanctions enforcement may have played little role in that increase.
Ann-Louise Hittle, vice president of oil markets at energy research company Wood Mackenzie, said that when the Trump administration announced in 2018 it was leaving the Iran deal — which placed limits on Iran’s nuclear program in exchange for sanctions relief — Iran’s oil production fell significantly, from 3.7 million to 3.8 million barrels per day to about 2.2 million barrels per day.
It has grown somewhat since that time, she said. Her company estimates that as of January, Iran was producing 2.55 million barrels per day.
Data from the company TankerTrackers.com, which tracks oil shipments, also shows growth in Iranian exports in recent months.
Exports, which measure oil that actually leaves the country, were at about 1.6 million barrels of oil per day last month, according to the company. This is up from as low as 1.2 million barrels per day earlier this year. The company said these figures are higher than they were under the Trump administration but lower than in the last year of the Obama administration.
Hittle, however, said growth in oil production and exports does not necessarily point to a lack of sanctions enforcement. She said she believes any increases have more to do with the demand for oil in countries like China that buy Iranian oil despite U.S. sanctions.
“The sanctions are very stringent and there are no buyers except for countries that are able and willing to work out barter agreements with Iran,” she said. “The sanctions are working but there are enough buyers available and Iran’s oil is discounted enough that it becomes attractive.”
“I know that there have been reports of softer sanctions enforcement, but given who the buyers are, I think it’s more to do with what Iran is doing and its buyers,” Hittle added.
Ben Cahill, senior fellow at the Center for Strategic and International Studies, similarly said the sanctions are “quite hard to enforce.”
“Iran has been discounting its oil pretty heavily and so Chinese buyers have been taking it,” Cahill said, noting a lot of these buyers are smaller, independent refiners.
“They’re just harder to target because they really don’t have exposure to the U.S. financial system,” he added.
However, he said, “My perception is that when the market gets tighter and prices rise, enforcement seems to weaken.”
Biden administration officials have insisted they are enforcing their sanctions on Iranian oil. Yet, they have also signaled further action may be in the cards.
“We will always, as we do in any case, typically, revisit sanctions regimes to see if they need to be changed or adjusted, specifically with respect to Iranian oil,” White House national security spokesperson John Kirby told reporters this past week.
Hittle, with Wood Mackenzie, said it would be “difficult to add additional oil sanctions” given how “thorough” the existing ones are. But she said the U.S. could target countries that are buying Iranian oil directly to try to pressure them to stop.
Cahill said if the U.S. does want to take further action, it could “send clear messages to the Chinese government.”
There have also been calls for sanctions more broadly. Ten Republican senators signed a letter on Tuesday that called on President Biden to take coordinated action with other G7 letters to “further isolate Iran with severe sanctions.”
There have also been some calls, particularly from Biden’s rivals, to step up U.S. oil production. Republicans have repeatedly argued that the Biden administration’s energy and climate policies discourage domestic energy production.
However, U.S. oil production hit an all-time high earlier this month.
Original News : https://news.yahoo.com/iranian-oil-faces-scrutiny-amid-165647748.html