After the US-Iran hostage release deal, a report said Monday that Tehran boosted its oil exports to levels not witnessed since 2017, when there were no sanctions.
TankerTrackers.com that monitors global oil shipments, reported that in the initial 20 days of August, Iran dispatched an average of over two million barrels of oil daily, marking a more than 30-percent surge compared to the past few months.
Bloomberg and others who reported on the development did not offer a specific reason, but except the agreement announced in mid-August that the United States allowed the release of $6 billion of Iran’s money frozen in South Korean banks in exchange for five American hostages, no particular event or decision can be cited.
Iran’s oil exports began to decline in 2018 when former US President Donald Trump withdrew from the JCPOA nuclear accord in May 2018 and imposed third-party sanctions on Iran’s oil exports and international banking. By 2019, Iran was barely shipping 250,000 barrels per day and according to some of its senior officials at the time, it was earning less than $10 billion a year.
Changes started in late 2020 when Joe Biden won the US presidential election. In September of that year, he declared in a CNN op-ed that he aimed to reverse Trump’s decision and resurrect the Iran nuclear deal. China immediately increased Iranian oil purchases, pushing exports to about 700,000 barrels per day by mid-2021. During this period, Tehran engaged in indirect negotiations with Washington concerning the JCPOA, which persisted for 18 months without yielding any results.
After Washington announced last October that it was no longer pursuing the revival of the Obama-era deal, secret talks apparently continued with Iran, eventually resulting in the hostage release agreement. However, numerous media reports have indicated that the deal with Tehran goes far beyond the cash-for-hostages deal and the Biden administration has also agreed not to enforce sanctions in return for Iran slowing down its uranium enrichment.
The news of shipping 2 million barrels of oil per day appears to be the first indication that US oil sanctions on Iran are virtually defunct.
Although Iran is selling the oil with discounts to China and possibly to others now, even a $50/barrel price tag will bring in more than $100 million a day for Iran’s cash-strapped regime.
The only thing standing on the way of a $40 billion annual cash revenue for Tehran now is the US banking sanctions. So far, Iran has been unable to repatriate a significant part of the oil revenues in cash US dollars or other hard currencies. If Chinese and other third-country banks feel the US will look the other way, that restriction will also disappear.
Iran has shown no indication of having changed its anti-West foreign policy, or its malign behavior in the region. As a matter of fact, the United States has beefed up its naval and air power in the Persian Gulf in recent months, concerned that Tehran can continue threatening commercial shipping.
US Republican lawmakers and others who have already voiced serious concern with the hostage deal will see Iran’s oil export data as a vindication of their warnings that President Biden has made a secret deal with Tehran, with no Congressional oversight, as the law requires.