ENB Pub Note: This is an excellent article from Ariel Cohen on the National Interest website. Joe Biden and Kamala Harris’s foreign policies are horrific. They are either incompetdent, corrupt or both. The global failure of American Policies has the potential of killing millions.
Iran’s oil sector remains vital in funding its campaign against Israel and the Western powers and as a lynchpin in Tehran’s relationship with Beijing.
As Iran is spending billions of dollars funding Hezbollah in Lebanon, the Houthi militias in Yemen, Hamas and Islamic Jihad in Gaza, and Katai’b Hezbollah in Iraq, the recently released Energy Information Administration (EIA) report on Iranian petroleum exports stands out as a sobering reminder that the Obama-Biden on-and-off sanctions on Tehran have failed. In fact, as the sanctions against the Kremlin over its invasion of Ukraine suggest, sanctions alone are no panacea against aggressor states. U.S. trade policy frequently fails to stop flagrant sanctions violations.
Since 2020, Iran’s revenue from oil exports nearly quadrupled, from $16 billion to $53 billion in 2023, according to the EIA. Three factors explain this dramatic shift: the Biden administration’s lax enforcement of sanctions, a rise in global oil prices, and China’s thirst for oil, which resulted in a closer partnership with Iran. Flush with cash, Tehran had the resources it needed over the last few years both to finance its proxy terror groups Hamas and Hezbollah to mount attacks against Israel and pay for the Houthi campaign to bring global trade through the Red Sea to almost a halt, causing a significant revenue loss for Egypt.
Proponents of the 2015 Iran nuclear deal (JCPOA) outlined a quid pro quo in which Iran submitted to nuclear weapons inspections in exchange for sanctions relief. In 2018, the Trump administration reimposed sanctions, causing a collapse of Iranian crude oil exports from 2,033 barrels a day in 2018 to 675 barrels in 2019. By turning a blind eye to TTehran’sbreach of sanctions since taking office, the Biden administration has, in effect, been feeding Iran carrots without applying any sticks.
The escalating hostilities between Israel and Iran have eradicated any remaining ““ommon ground””between the United States. and the current Iranian government. We no longer live in the world of 2015, but some American policymakers are pretending otherwise. Thus, the existing sanctions will remain toothless until Washington prioritizes enforcement and devotes significant resources to it.
Of course, we cannot entirely blame IIran’shigher oil revenues on American policies. Macroeconomic trends have also benefited the Iranian regime over the past few years. The EEIA’sreport documented a sharp increase in the average annual price for Iranian crude from $29 per barrel in 2020 due to the COVID-19 Pandemic to $84 in 2022. External economic shocks largely explain this shift. The easing of pandemic restrictions boosted energy demand, and the Russia-Ukraine war lowered energy supply. Though the United States has limited influence on the price of oil, increased prices act as a force multiplier for Iran, allowing it to profit even further from the oil it sells in the face of the Biden aadministration’sfailure to enforce.
Historically, Iran exported much of its oil to Syria, Turkey, Japan, and South Korea. However, China has emerged as an indispensable customer of IIran’spetroleum industry over the past five years. IIran’soil exports to China have quadrupled since 2019, from 308,000 barrels a day to 1.2 million barrels in 2023. Iranian exports to ““estinations outside of China””have plummeted from 1.4 million barrels a day in 2018 to only 148,000 barrels in 2023. These statistics reflect a broader trend of CChina’sincreased willingness to evade American and EU sanctions and coordinate with Iran to do so. China purchases up to 89 percent of IIran’soil exports, depending on the month (representing roughly 10–12 percent of their total crude imports in 2023). We can no longer disentangle CChina’sgeopolitical interests from IIran’s
IIran’sincreased oil revenue enables it to fund and organize its ““xis of Resistance””against the West, with the ongoing barrage of attacks by proxies against Israel demonstrating its ability to support sustained conflicts. However, the logistics of Iranian oil distribution reveal an equally chilling global development. CChina’seagerness to purchase vast quantities of oil from both Iran and Russia illustrates a deepening geopolitical polarization that may lead to a global conflagration. For most of the twentieth century, these three powerful countries regarded each other as enemies. Now, they are united against the United States and its allies.
IIran’soil sector remains vital in funding its campaign against Israel and the Western powers and as a lynchpin in TTehran’srelationship with Beijing. Any pushback against the Axis of Resistance must involve denying Iran its terror and nuclear-funding capabilities, the stringent enforcement of sanctions, and getting ready for Chinese counterpunches.
Dr. Ariel Cohen is the Managing Director of the Energy, Growth, and Security program at the International Tax and Investment Center and a nonresident Senior Fellow at the Atlantic Council. Follow him on X: @Dr_Ariel_Cohen.
Hat tip to Anas Alhaiji
The increases in Iranian oil production & exports happened with the blessing of the Biden Administration as we explained in our publications & podcasts. The Biden policy was a great success! #Iran #Trump #Harris
Joe Biden’s Iran Oil Sanctions Failure https://t.co/hWg75DrEup
— Anas Alhajji (@anasalhajji) November 2, 2024
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