UANI Round Up – Illicit Iran-China Oil Trade Undermines U.S. Sanctions
(New York, N.Y.) — United Against Nuclear Iran’s (UANI) Iran Tanker Tracker program has since January 2021 seen sharp year-over-year increases in Iran’s crude oil and gas exports, the bulk of which have or are destined to reach customers in China. These sales undermine the effect of U.S. economic sanctions against the Iranian regime and financially support Iran’s state-sponsorship of terror and its illicit nuclear program. Elevating the importance of China’s compliance with U.S. sanctions against Iran as part of Beijing’s relationship with the U.S. and committing to more robust sanctions enforcement is of paramount importance.
In October’s 2021 Iran Tanker Tracking blog, UANI research estimated that for that month, China imported about 586,993 barrels per day of Iranian oil. China by far was Iran’s number one importer of oil. Despite this, neither China nor the multitude of individuals, businesses, and vessels complicit in the illicit trade have faced repercussions.
UANI Senior Adviser Ambassador Nikki Haley observed in a Washington Post op-ed in October that “Iran has no access to international banking systems. It can’t do business with firms that want to access U.S. markets. Most of its assets are frozen. So how does the cash-starved Iranian regime continue to fund terrorist groups across the Middle East? The answer, increasingly, is China. And President Biden has largely chosen to look the other way as China steadily buys millions of barrels of Iranian oil.”
To tighten enforcement of sanctions, UANI research director Daniel Roth and chief of staff Claire Jungman argued in an October op-ed in The Hill that with “a better understanding of the shipping subterfuge, the U.S. and its allies can make the whole rogue enterprise prohibitively costly for all parties, plugging enforcement gaps and truly squeezing Tehran.”
Given the frequent and consistent violations perpetrated by China, UANI Executive Director David Ibsen and Research Analyst Jordan Steckler argued in the Washington Times last month that the costs of failing to enforce sanctions include a weakening of “the perception of an engaged America committed to global leadership … its capacity to project power, influence behavior, and shape a world that is more free, democratic, and friendly to its interests.”
Additional recent media coverage may be found below.
Published October 19 in the Washington Post, Nikki Haley wrote that Congress must hold both Iran and China accountable for violating sanctions due to President Biden’s lack of action thus far. She states that, “There’s no world in which China’s involvement in the Middle East makes the United States safer.” Iranian-Chinese cooperation can only harm U.S. national security, and as such “the Biden administration should make it more difficult for Iranian oil to leave for China” by increasing sanctions that have been proven to work.
In an op-ed published October 19, UANI research director Daniel Roth and chief of staff Claire Jungman recommended the Treasury Department “broaden the scope of sanctions-triggering activities that constitute ‘significant support’ to Iran’s shipping sector” and “should expand and delineate the range of sanctionable maritime services and work to identify and target any Venezuelan or Chinese firms complicit in smuggling” in order to increase the enforcement of U.S. sanctions on Iranian oil. They noted that while sanctions are effective, they are only as effective as their enforcement mechanisms. Without enforcement, the sanctions cannot accomplish their purpose of “[compelling] Iran to moderate its destructive behavior and end its pursuit of nuclear weapons.”
UANI executive director David Ibsen and research analyst Jordan Steckler stated in the Washington Times on October 28, that the “perception of a diminished U.S. role in Middle Eastern affairs engenders dangerous repercussions that have already begun to play out and threaten to further destabilize the region. Specifically, Iran continues to violate the Joint Comprehensive Plan of Action (JCPOA), engage in the illicit trade of oil and natural gas with China and Venezuela, destabilize Lebanon, and fund and arm terrorist organizations that attack Iraqis, Kurds, Saudis, Israelis and Americans.” In ending his push to restore the JCPOA, President Biden could instead encourage regional allies to join security discussions and recommit to ensuring that Iran never attains nuclear capability. The JCPOA continues to be violated by Iran—including through the sale of oil—meaning that the U.S. sanctions are not placing enough pressure on Iran to engage in productive discussions with the United States.
Iran experts are concerned that the United States is ignoring sanctions violations as they try to get Iran back to negotiating table, according to a report published in the Washington Free Beacon on November 2. UANI chief of staff Claire Jungman commented that Iran’s “increase in oil exports to China ‘has to do with a lack of enforcement on sanctions.’” The report also noted that “China's importation of Iranian oil has drastically increased since January 2021, according to experts tracking the numbers, and has coincided with the Biden administration's efforts to revive nuclear negotiations with Tehran.”
In comments made to the Washington Times on Thursday, November 4, UANI research director Daniel Roth stated that “Without its oil revenues from China, the regime can’t export its terrorism across the region and into Europe. It doesn’t have the extra funds to pursue its illicit nuclear weapons and ballistic missiles or its drone warfare programs.” The Washington Times also reported that anonymous national security sources believe that Beijing will not be penalized for its purchases of Iranian oil, noting that its purchases tripled following the election.
Following its seizure by Iran, a Vietnamese oil tanker was finally free, according to a report in the Associated Press on November 10. The report notes that United Against Nuclear Iran been observing the Sothys, sending a letter to the Vietnam Maritime Administration on October 11 stating that “its analysis of satellite photos showed the Sothys received a ship-to-ship transfer of oil in June from an oil tanker called the Oman Pride.” This oil tanker had previously been identified by the U.S. Treasury Department as being part of a scheme to smuggle Iranian oil and that the oil had been sold in Asia. The report further states that “Iran’s seizure of the Sothys would be the latest in a string of hijackings and explosions to roil the Gulf of Oman, which sits near the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a fifth of all traded oil passes.”
Due to reports from United Against Nuclear Iran (UANI) regarding how vessels use technologies to hide their smugglings of Iranian fuel oil, liquefied petroleum gas, gasoil, crude, and condensate, three marine insurance providers have removed six ships from their coverage. UANI sent several letters about 11 vessels “involved in deceptive practices” to West of England P&I, American Club and Skuld.
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Eye on Iran is a news summary from United Against Nuclear Iran (UANI), a section 501(c)(3) organization. Eye on Iran is available to subscribers on a daily basis or weekly basis.