To state the obvious: a primary function of sanctions on Iranian oil is to tighten Iran’s budget so the Islamic Republic cannot fund the proxy militaries, like the group that killed US soldiers in Jordan, or Hamas and Hezbollah who attack Israel.
“Without Iran’s export of oil, it cannot operate its budget much less successfully fund and arm its proxies, “says former Ambassador Mark Wallace, who heads the group United Against Nuclear Iran.
“Without proxies, the Middle East is a much more stable place.”
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Everything from the Gaza war to almost 170 attacks on US targets in the region show it’s anything but stable. The proxies appear well funded and in the face of US sanctions, Iranian Oil revenue is booming.
“Really, we have seen a renaissance in the Iranian oil industry since President Biden came into office. We’ve seen their (Iranian) numbers go up dramatically. They’re producing the most amount of oil they’ve had since the Iranian Revolution,” says energy market analyst Phil Flynn.
TEHRAN, IRAN – JANUARY 23: Chinese President Xi Jinping (L) meets with Supreme Leader of Iran Sayyed Ali Khamenei (R) in Tehran, Iran on January 23, 2016. (Supreme Leader Press Office/Anadolu Agency/Getty Images)
In the Trump years, the US engaged in what the administration called the maximum pressure campaign and ended sanction waivers with the goal of stopping Iran exports altogether.
“We are going to zero,” said then Secretary of State Mike Pompeo in 2019. “How long we remain there, at zero, depends solely on the Islamic Republic of Iran’s senior leaders.”
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Now, anywhere from 300-560 tankers, dubbed “the ghost armada” or “dark fleet,” sail the seas obfuscating their locations and delivering sanctioned, Iranian crude primarily to China.
On China’s east coast north of Shanghai and south of Beijing an estimated 150 small semi-independent so-called “teapot” refineries operate.
A security guard stands at his station at the new Phase 3 facility at the Persian Gulf Star Co. (PGSPC) gas condensate refinery in Bandar Abbas, Iran, on Wednesday, Jan. 9, 2019. The third phase of the refinery begins operations next week and will add 12-15 million liters a day of gasoline output capacity to the plant, Deputy Oil Minister Alireza Sadeghabadi told reporters. Photographer: Ali Mohammadi/Bloomberg via Getty Images (Getty Images)
Industry analysts and Iran watchers say the teapot refineries turn Iranian crude into useable petrochemicals.
The same analysts say the Biden administration, eager to woo Iran back into the JCPOA nuclear deal, isn’t doing anything to disrupt this black market which has earned Iran upwards of $80 billion.
Recent reports claim the US is close to a deal with Iran that would free US citizens held in Iran and also delay Iran’s nuclear program. (Photo by Probst/ullstein bild via Getty Images, Photo by NICHOLAS KAMM/AFP via Getty Images)
“The reality is a feckless strategy of oil sanctions and enforcing those sanctions, both against the transport and shipping of that oil and its end users,” says Wallace.
An analyst with the Foundation for Defense of Democracy says the failure to disrupt the revenue that funds the proxies, means the administration needs to take blame for the US service members killed in Jordan.
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“With the deaths of three US soldiers, it is a direct result of appeasement policy towards Iran,” says Richard Goldberg.