Congressional leaders discussing Iran oil sanctions, Senator Cardin says

Congressional leaders are discussing how to push ahead with legislation that would place sanctions on importers of Iranian oil, with the issue gaining momentum after the nation’s direct attack on Israel, Senator Ben Cardin said Tuesday.

The Stop Harboring Iranian Petroleum Act (S.1829) — which would broaden sanctions against entities that ship or process Iranian crude — passed out of the Senate Foreign Relations Committee Tuesday. The bill, by Florida Republican Senator Marco Rubio, sanctions refiners of Iranian oil and entities that illicitly trade the country’s crude through ship-to-ship transfers, according to a summary of the bill. A companion bill (H.R. 3774) passed the House on a 342-69 vote in November. 

The committee also voted to approve legislation by its top Republican member, Senator James Risch of Idaho, (S. 3235), taking aim at China’s evasion of sanctions on Iranian crude oil that is similar to legislation (H.R. 5923) overwhelming approved in the House Monday. 

“We are talking about the process for how to move it forward,” Cardin, a Maryland Democrat and chairman of the Senate Foreign Relations Committee, said of the bills in an interview, referring to congressional leaders and a House and Senate working group on the issue. 

The House-passed bill, which was approved by a 383-11 vote, would expand secondary sanctions against Iran to cover all transactions between Chinese financial institutions and sanctioned Iranian banks used to purchase petroleum and petroleum products. About 80% of Iran’s roughly 1.5 million barrels a day of oil exports are sent to independent refineries in China known as “teapots,” according to a summary of the legislation.

That legislation could increase crude prices by as much as $8.40 a barrel, which would add 20 cents per gallon for gasoline, if the sanctions were passed into law and enforced, ClearView Energy Partners said in a note to clients. 

While the Iran-China legislation would likely pass if Senate Majority Leader Chuck Schumer were to bring it to the floor for a vote, Schumer may opt to stall the legislation to avoid driving up gasoline prices that are already on the rise, the consulting firm said in a note to clients Tuesday. 

“However, we think it could prove politically difficult for Leader Schumer to quash Iran sanctions if the issue continues to gain momentum (especially if Iran-Israel conflict continues to escalate),” ClearView said.