Bipartisan Coalitions Urge Biden to Resume Enforcement of Iran Oil Sanctions

Bipartisan coalitions in the House and Senate urged President Joe Biden on January 24 to enforce U.S. sanctions on Iranian oil. Biden’s deliberate non-enforcement of sanctions has enabled Iran to earn tens of billions of additional dollars in oil income, helping to fund oppression at home and aggression abroad.

Tehran has exported over $100 billion of oil since Biden took office. Data from the United Against Nuclear Iran (UANI) Tanker Tracker database reveals that in 2023, Iran sold 516 million barrels of oil. This figure represents a 23 percent increase over the previous year and more than an 82 percent jump in exports from the May 2019-January 2021 period in which President Donald Trump and Secretary of State Mike Pompeo pursued a “maximum pressure” campaign.

If Iran discounts its oil between 5 and 15 percent to the Brent price as many in the oil industry believe, then Iran’s 2023 oil sales generated between $36.3 and $40.6 billion in revenue. This marks a 187 percent increase in average monthly revenue compared to the maximum pressure era.

The UANI database identified four main destinations for Iranian oil in 2023: China, Syria, the United Arab Emirates, and Venezuela. China remains the primary buyer, purchasing over 440 million barrels, amounting to purchases between $31 and $35 billion. These funds are crucial for the Islamic Republic’s economic survival. While Chinese private (or “teapot”) refineries gain from discounted Iranian oil, Beijing’s decision to allow this import is as much diplomatic as it is financial. Beijing seeks to empower Tehran to stick a finger in the eye of Washington.

Syria was the second greatest recipient of Iranian oil, receiving nearly 39 million barrels. It is not clear if the Assad regime compensates Tehran for the shipments that were worth around $3 billion. Tehran has reason to gift some oil to keep the Syrian regime afloat, as Syria remains a crucial component of Iran’s land bridge to the Mediterranean and facilitates the transfer of weaponry to Lebanese Hezbollah.

The United Arab Emirates was the third-largest recipient of Iranian oil in 2023, with 20 million barrels equating to around $1.5 billion passing through the country for re-export, tanker-to-tanker transfer, and rebilling to hide oil origin. The Emirates remains a financial and re-export hub for Tehran. Reports show that the displaced Iranian and Russian oil have been moving across Emirati ports.

Venezuela was the fourth-largest destination, receiving about 12 million barrels worth approximately $1 billion. Venezuela, like Iran, is a major oil producer, but its energy sector has been under sanctions since 2017. Economic mismanagement, political instability, and financial sanctions have hit Venezuela’s energy sector, so Tehran uses its oil to provide Caracas with emergency relief. Venezuela imports both Iranian heavy crude and condensate to feed Venezuelan refineries to mitigate Venezuela’s fuel problem. It pays Iran with gold and extra heavy crude, which Iran, in turn, sends to China. The UANI database could not identify the destination of approximately 4 percent of Iran’s oil exports. While Tehran sent some oil to Singapore and Indonesia, it is possible other countries benefited as well.

The congressional letters to President Biden rightly propose that he “take immediate action to stop Iran’s illicit oil trade and sanction entities transporting Iranian petroleum products and the foreign ports and refineries that knowingly accept those products, along with any financial institutions facilitating these transactions.” The first step is to resume enforcement of sanctions already on the books, although the president’s willingness to do so remains an open question.

Saeed Ghasseminejad is a senior advisor on Iran and financial economics at the Foundation for Defense of Democracies (FDD), where he contributes to FDD’s Iran Program and Center on Economic and Financial Power (CEFP). Follow Saeed on X @SGhasseminejad. For more analysis from Saeed and FDD, please subscribe HERE. FDD is a Washington, DC-based, non-partisan research institute focusing on national security and foreign policy.