Iran's Oil Exports

I ran’s oil exports hit a six-year high last month. In a normal country, this wouldn’t be news. But the Islamic Republic isn’t a normal country. The regime in Tehran is a violent theocracy under U.S. and international sanctions. President Trump reimposed energy sanctions on Iran in 2018 when he left the Iran nuclear deal. These sanctions remain in effect, but the Biden administration is failing to enforce them, which has created a financial windfall for Iranian terrorism. Iran’s oil revenue underwrites a war machine that is tearing apart the Middle East. Oil proceeds finance militias in Iraq, Syria, Lebanon, Bahrain and Yemen. They target and kill American citizens. In January, Iranian proxies killed three American soldiers stationed in Jordan. Hezbollah receives $700 million a year from Tehran. Iran’s oil supported the Hamas death squads that carried out the Oct. 7 massacre. Among the 1,200 people murdered in Israel, at least 32 were American citizens. The regime’s oil revenue also funds its nuclear program and missile arsenal. Its destructive capabilities were displayed last month when Iran fired hundreds of missiles and drones at Israel. This was the most recent oil-financed operation to destabilize the region; it won’t be the last. It’s no coincidence that as Iran’s oil revenues soar, the Middle East is set further aflame. Many in the region say Iran is directly and indirectly responsible for the violence. They see Iran and its proxies on the march, emboldened and flush with money. The mullahs are willing to take new risks, as Israel faces threats on many fronts. With a “ring of fire” strategy, Tehran and its proxies aim to encircle Israel. If the Biden administration is even trying to deter Iran, it is using the wrong tools. There have been meetings, payoffs and side deals—all with the goal of reaching an accommodation with Tehran. Even now, with the Middle East on the verge of a full-scale war, Mr. Biden is asking Iran to come back to the negotiating table to restart talks on a nuclear deal. Reportedly, he would lift economic sanctions in return. Iran is now exporting an average of 1.56 million barrels a day of crude oil, most of it to China. This is a financial bonanza for Tehran, netting the regime up to $35 billion annually. That’s more than $100 billion in revenue since Mr. Biden took office in January 2021. Buoyed by these exports, Iran’s pace of economic growth surpassed that of the U.S. in 2023; the International Monetary Fund expects that to happen again in 2024. The U.S. can reverse this trend. The Trump administration successfully reduced Iran’s exports, which fell from a 2018 high of 2.5 million barrels a day to a low of 70,000 in April 2020. This denied Tehran access to as much as $50 billion in annual revenue. Secretary of State Mike Pompeo and I monitored the sanctions’ efficacy daily. Teams from across the federal government worked to track Iran’s illicit oil transfers and disrupt them in every region. Countries took notice, heeded our warnings, and found alternative energy sources. As Iran’s exports nose-dived, we asked our Gulf partners to offset the loss of Iranian oil by increasing their production. The average annual price of Brent crude went down between 2018 and 2019. We balanced national security and economic objectives in a tight energy market. Today, the Organization of the Petroleum Exporting Countries has even more spare oil capacity. That gives Mr. Biden ample room to enforce the oil sanctions vigorously. Skeptics have said our sanctions had little effect. That would be news to Iran’s then-President Hassan Rouhani, who complained in late 2019 that U.S. sanctions cost the regime as much as $200 billion. That year, Iran cut its military spending by 28%. Iran-backed militias across the Middle East told reporters that Tehran’s handouts had dried up. Deterring Iran helped stabilize the Middle East between 2017 and 2021. During those years, we supported our friends and weakened our enemies, including Iran, financially and militarily. The Abraham Accords illustrate how bold initiatives for peace can flourish with the right Iran policy. Our Arab partners, along with Israel, welcomed maximum pressure on the Islamic Republic. Now, as Iran’s coffers fill up again, that prospect of a new, peaceful Middle East is slipping away. Instead of reshaping the region for the better, America is back to playing by house rules. Mr. Biden has mismanaged deterrence, and compounded matters with a frenetic and aimless diplomacy in the region that is long on dialogue and short on results. If he doesn’t change course and impose hard costs on Iran, Iran’s aggression will expand apace. Mr. Biden has the tools and authority at his disposal to undermine Iran’s projection of power. If he won’t do it, then Congress should force his hand. Restoring deterrence starts with enforcing the existing sanctions with the goal of zero oil exports for the top financier of terrorism in the Middle East. 

Source: WSJ