In complete defiance of the Biden administration and European countries, the Iranian ayatollahs continue to rapidly advance their nuclear program, to the point where they are reportedly at various points (including the White House and IAEA) within weeks of producing a nuclear bomb. Biden and his inability to demand accountability from those violating the sanctions are among the main reasons why the Tehran regime is blatantly ignoring the US and continuing to approach the moment Iran becomes a nuclear state.
As of today, US sanctions are no longer particularly affecting the Iranian economy and they are failing to halt cash flow to Tehran. The ayatollahs now produce more oil and sell it in quantities close to the period before the sanctions. The main customers are countries like China, which are in desperate need of more oil, and all this is happening while the Biden administration itself is severely restricting oil exploration.
In fact, from the moment Biden entered the White House, Iranian oil exports were on the rise. During the Trump administration, oil exports from Iran were significantly reduced to between 100,000 and 200,000 barrels a day. Today, Iran exports more than a million barrels a day, of which between 700,000 and 800,000 barrels to China. “Oil sales have doubled,” President Ibrahim Raisi recently boasted. “We are not worried about oil sales.”
Oil exports are Tehran’s main source of profit. According to reports, the ayatollahs’ regime also has the second largest natural gas reservoir in the world, and the fourth largest crude oil reservoirs. Oil sales account for about 60% of total government revenue, and more than 80% of export revenue. Regime leaders are also well aware of the dependence on oil exports. “Although we have other sources of income,” former President Hassan Rouhani explained, “the only source that can hold the country back is the money that comes from selling oil.”
Venezuela has recently become another major destination for oil shipments from Iran, with none of the countries bearing the consequences from the Biden administration. A Reuters report on June 13 reported, for example, that a tanker sailing under an Iranian flag with almost a million barrels of crude oil on board had reached the waters of Venezuela last weekend:
“This is the third cargo of crude oil shipped by the Iranian company Naftiran to the government oil company of Venezuela, according to a supply contract that provides the South American country with the raw material. “Silvia 1 arrived last month at ports in Venezuela and carried the first shipments from Iran”
In another move that exploits the weakness of the US administration, the ayatollahs sign long-term oil supply agreements, with the aim of isolating the Iranian economy from sanctions. Only recently has Iran signed a 20-year cooperation agreement with Venezuela, under which the two countries will strengthen military and industrial ties. “We have important ventures of cooperation between Venezuela and Iran in the fields of energy, petrochemicals, oil and gas,” President Nicholas Maduro declared.
In addition, China and Iran announced in January this year the start of implementing a comprehensive plan for cooperation between the two countries, after Iranian Foreign Minister Abdullahian visited China and met with his colleague Wang Yi. The “cooperation” refers to a 25-year contract signed between Tehran and Beijing, in which China pledges to invest nearly $ 400 billion in the Iranian energy industry. In return, China will receive priority in tenders of any new project related in the field. It will also receive a 12% discount on the price of oil and will be able to delay payments for a period of up to two years. Overall, the Chinese discount is estimated at 32%.
Such agreements are likely to allow Iranians to more easily circumvent US sanctions, enjoy access to cash, strengthen the regional terrorist network and continue to advance the nuclear program.
In the face of all this, the Biden administration needs to impose much new and more severe sanctions on Iran, at least in terms of the energy and finance industry. Such a move would undermine the Ayatollahs’ grip on power, and make it very clear to them that if they choose to continue with the nuclear program, then the military option is on the table.
But as of today, thanks to the weakness of the Biden administration and its unwillingness to enforce sanctions, act against violations and halt the flow of funds to Tehran, the ayatollahs’ regime has no incentive to stop the rush towards the production of a nuclear bomb. They and their many customers just keep going without interruption.
Dr. Majid Rafizadeh is a political scientist at Harvard University and president of the American International Council for the Middle East. The column was first published on the Gatesstone Institute website.