The U.S. federal government is exploring ways to reduce Iranian oil exports amid increased tensions in the Middle East. This follows Tehran’s threats to retaliate for the killing of Hamas leader Ismail Haniyeh.
According to Politico, a State Department spokesperson indicated that the U.S. is seeking methods to limit Iran’s oil revenue, attributing the regional tensions to Tehran’s actions after Israel’s attack on Haniyeh. The official stated, “As Iran continues to escalate tensions in the region, we will collaborate with partners to increase pressure on Iran and decrease their oil exports.”
The spokesperson also noted the high costs associated with evading sanctions, such as payments to intermediaries and money laundering, which means Iran only receives a small portion of its oil revenue. Despite these sanctions, Iran’s oil exports have been increasing. Earlier this year, Iranian oil exports reached a six-year high, averaging 1.56 million barrels per day in the first quarter.
Fernando Ferreira from Rapidan Energy Group remarked, “The Iranians have mastered the art of sanctions circumvention.” He suggested that to effectively impact Iran’s oil trade, the Biden administration needs to focus more on China.
China is Iran’s largest oil customer, but not the only one. Reuters recently reported that Iranian oil cargoes are also being shipped to Oman and Bangladesh. Iran’s Petroleum Minister Javad Owji stated last month that Tehran is exporting oil to as many as 17 countries. According to a Reuters survey, Iran’s crude oil production averaged 3.22 million barrels per day in July, the highest level tracked since 2018.