By Timothy Gardner
WASHINGTON (Reuters) – U.S. lawmakers tucked sanctions on Iranian oil exports into the House of Representatives aid package for Ukraine, Israel and the Indo-Pacific after Tehran’s missile and drone attack on Israel last weekend.
If passed by both the House and Senate and signed by President Joe Biden and subsequently implemented and enforced, the measures could ultimately impact Iran’s oil exports. Exactly when is unclear, as the measures are still being debated and will give the US president waiver powers.
The House of Representatives could vote on the package as soon as possible on Saturday, Republican Speaker Mike Johnson said.
Despite a wide range of existing US sanctions on Iranian oil exports over its nuclear program, shipments have increased due to demand for oil from China and as networks outside the US financial system trade the oil.
UKRAINE AID PACKAGE
The package, which includes billions of dollars in aid for Ukraine, Israel and the Indo-Pacific, includes several measures related to sanctions on Iran. Two of these “could explicitly impact Iran’s petroleum exports if implemented and enforced,” according to ClearView Energy Partners, a nonpartisan research group.
The first, the Stop Harboring Iranian Petroleum Act, or SHIP, would impose sanctions on ports, ships and refineries that “knowingly engage” in the shipping, transfer, transactions and processing of Iranian crude oil and products, according to ClearView. Ships violating the ban would be barred from entering U.S. ports for two years.
However, the bill includes 180-day waivers that Biden could invoke to avoid spikes in oil prices.
The package also includes an Iran-China measure that would expand secondary sanctions on Iranian oil to apply to any transaction by a Chinese financial institution purchasing petroleum from Iran. The sanctions would result from annual reviews and run until 2029.
But here too, the US president could probably apply renewable sanctions waivers.
OTHER MEASURES IN AID PACKAGE
Another measure would impose sanctions on the office of Iran’s Supreme Leader Ayatollah Ali Khamenei, related officials, and foundations and conglomerates supervised by the office. According to ClearView, “depending on how broadly it is interpreted,” the measure could also include Iranian charities and oil companies.
Another measure in the package requires reports on the assets and non-Iranian financial accounts of 20 Iranian leaders and the leaders of Iran-backed groups, including Hamas and Hezbollah, and mandates the closure of all U.S. accounts. According to ClearView, this could trigger retaliation from sanctioned parties that could impact the petroleum sector.
What if the aid law fails?
If the package fails due to strong objections from right-wing Republicans or for other reasons, some of the measures included could still pass both houses of Congress as part of other legislative packages later this year, according to ClearView. These include the SHIP measure and the Iran-China measure, the report said.
(Reporting by Timothy Gardner; Editing by Sonali Paul)
