New Senate Legislation Would Empower President Obama to Sanction Gasoline Sales to Iran

Supports Obama administration’s diplomatic outreach aimed at ending Iranian regime’s nuclear weapons program

Washington, D.C. (April 28, 2009)—The Foundation for Defense of Democracies (FDD) praised the bipartisan Iran Refined Petroleum Sanctions Act of 2009, which would provide for sanctions on any person or entity that provides refined petroleum to Iran or helps Iran to import refined petroleum or develop its refinery capacity.

“This legislation will give President Obama the leverage he needs as he uses diplomacy to persuade Iran to abandon its pursuit of nuclear weapons, stop its support for terrorism, and respect the human rights of its citizens,” said FDD Executive Director Mark Dubowitz.  “While this legislation is not a ‘silver bullet,’ it may be ‘silver shrapnel’ as part of a comprehensive effort.  For negotiations to be successful, Iran’s leaders must know that the United States is serious about using crippling sanctions to hit Iran where it hurts.” Dubowitz recently coauthored an op-ed on the topic for Canada’s National Post, and was quoted in a Wall Street Journal editorial.

“Within the past few weeks, Iran has accelerated its illegal nuclear program, continued its support of terrorist groups, wrongly imprisoned an American journalist, and stepped up its outrageous anti-Israel and anti-Semitic rhetoric,” said Orde Kittrie, an FDD senior fellow, law professor at Arizona State University, and former U.S. State Department official.  “Iran’s need to import 40 percent of its gasoline is its Achilles’ Heel.  If diplomatic engagement is to succeed in moderating Iran’s behavior,  the U.S. needs to change Iran’s cost-benefit analysis by demonstrating that Iran will pay a heavy price if it does not stop violating international law.  If this bill helps convince Iran’s Swiss and other foreign gasoline suppliers to stop supplying Iran, Iran’s economy will slow dramatically, its military will have to look elsewhere for fuel, and the Iranian people may demand that their government start investing in refineries for Iran’s plentiful crude oil rather than continue pouring money into its illegal and dangerous nuclear program.”

In November, Kittrie wrote an op-ed for the Wall Street Journal on how to increase U.S. leverage over Iran by focusing on Iran’s gasoline suppliers.

Iranian oil wells produce far more crude oil than Iran needs. Yet, Iran has not developed sufficient capacity to refine that crude oil into gasoline and other products. As a result, Iran must import some 40% of the gasoline it needs to fuel its economy and military.

FDD has provided substantial research and analysis on this subject, including identifying points of leverage over the handful of foreign energy companies that supply Iran with the majority of gasoline it imports.  Limiting gasoline sales to Iran to address its nuclear program has attracted broad support across the political spectrum.  For more background on the issue, please visit:  www.iranenergyproject.org.

The Iran Refined Petroleum Sanctions Act was introduced by Senators Evan Bayh (D-IN), Joe Lieberman (ID-CT), Jon Kyl (R-AZ), Kit Bond (R-MO), Barbara Boxer (D-CA), Sam Brownback (R-KS), Richard Burr (R-NC), Ben Cardin (D-MD), Tom Coburn (R-OK),  Susan Collins (R-ME), Russ Feingold (D-WI), Lindsey Graham (R-SC), James Inhofe (R-OK), Mike Johanns (R-NE), Amy Klobuchar (D-MN), Mary Landrieu (D-LA), Robert Menendez (D-NJ), Barbara Mikulski (D-MD), Patty Murray (D-WA), James Risch (R-ID), Charles Schumer (D-NY), Debbie Stabenow (D-MI), John Thune (R-SD), David Vitter (R-LA) and Ron Wyden (D-OR).

The introduction of this bill is the latest in a series of actions taken by Congress to use Iran’s reliance on imported gasoline as a source of leverage over Iran’s nuclear weapons program.  Last week, the Iran Diplomatic Enhancement Act, H.R. 1985, was introduced in the House by Representatives Mark Kirk (R-IL) and Brad Sherman (D-CA) and 23 other Democratic and Republican House members.  H.R. 1985 seeks to extend current U.S. sanctions to suppliers, brokers, insurers,  and tankers involved in selling refined petroleum to Iran. 

During the presidential campaign, then-Senator Barack Obama endorsed a cut-off of gasoline sales to Iran.   On October 7, 2008, Obama stated:  “Iran right now imports gasoline … if we can prevent them from importing the gasoline that they need … that starts changing their cost-benefit analysis. That starts putting the squeeze on them.”

FDD is preparing a monograph on the companies selling gasoline to Iran and the points of leverage that can be used by U.S. and foreign lawmakers to encourage these companies to end their business dealings with the Iranian regime. For more on FDD’s research and analysis of Iran’s need to import gasoline, please visit www.iranenergyproject.org.

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