U.S. lawmakers in new drive to slash Iran's oil sales to a trickle

U.S. lawmakers in new drive to slash Iran's oil sales to a trickle

U.S. lawmakers are embarking this summer on a campaign to deal a deeper blow to Iran's diminishing oil exports, and while they are still working out the details, analysts say the ultimate goal could be a near total cut-off, Reuters reported.

Such an extreme goal would risk antagonizing China and India, the biggest remaining buyers of Iranian crude, and could push oil prices higher in a hit to the global economy.

Iran denies its nuclear program is aimed at building a bomb, but skeptical Western powers have become increasingly frustrated and Israel has said it could take military action if diplomacy and sanctions fail to rein in Tehran's nuclear ambitions.

Both parties in the U.S. Congress are pressing for tougher sanctions, betting that a resurgence in U.S. oil output and signs of ample global supply will prevent prices from rising.

Last month, during a House of Representatives committee meeting on a bill toughening sanctions, a new clause was inserted that for the first time would require importers to cut purchase of Iranian crude by a specific volume: 1 million barrels per day (bpd) within one year.

But here's the catch: Iran's crude exports already fell to 700,000 bpd in May, raising questions about what the starting point for such a target would be.

The new language has yet to be incorporated into the official text of the bill and may change. At the hearing, lawmakers said the measure was meant to cut shipments by two-thirds, suggesting last year's 1.5 million bpd export was the starting point and 500,000 bpd the goal.

But some energy experts said there was growing momentum in Congress behind a push to cut Iranian exports even further - as close to zero as possible.

There is overwhelming Congressional support for action to choke funding to Iran's nuclear program.

On the same day as the House debate, the Senate voted 99-0 on a resolution urging Obama to support Israel if it attacks Iran's nuclear facilities.

The House's "Nuclear Iran Prevention Act of 2013", largely an effort to amend and toughen existing sanctions, passed the House Foreign Affairs Committee by a unanimous voice vote on May 22 and is expected to easily pass the full 435-member chamber, where it already has about 340 co-sponsors.

A defined measure of cuts in oil exports - rather than the vague "significant reductions" required by the initial legislation passed in late 2011 - may survive in the Senate.

"It's very possible it could find its way into the final product," a senior Senate aide said.

Daniel Sternoff, senior managing director at Medley Global Advisors, a consultancy which advises hedge funds and investors, said he expects "a pretty significant volumetric requirement" in the bill. "This is really throwing the entire kitchen at Iran," he said.

Several analysts said a final bill could be approved as early as August, though others in Washington do not expect action until the fall.

While Congress has long led the charge on getting tough on Iran, the State Department has urged a measured path.

It is not in the U.S. interest to cause any importer economy to "tank" because of the sanctions, Wendy Sherman, the State Department official leading talks with Iran over its nuclear program, told a Senate hearing on Tuesday. "We are all interdependent."

President Barack Obama is expected to talk about weaning Beijing away from Iranian oil when he meets Chinese President Xi Jinping this week.

China buys about half of Iran's crude exports. It has joined in the international effort to reduce its purchases, but whether it will be willing to go further is the key question.

India accounts for around a quarter of Iran's exports, while Turkey buys around one eighth.

"If you ask for too much too quickly from countries like China, Turkey and India, you risk getting nothing at all," says Jason Bordoff, professor and director of the Center on Global Energy Policy at Columbia University and a senior White House energy advisor until late last year.

Even if tougher new curbs are imposed, exports would likely dwindle but not disappear, says Sternoff.

Oil exports of 500,000 barrels per day or less would force Iran to shut in more oil wells, potentially causing problems for some of the country's oilfields, said Mehdi Varzi, a former official of the National Iranian Oil Co.

"Iran will not be able to thrive on 500,000 barrels a day of oil exports. The government is surviving, but its domestic budget is facing an unprecedented squeeze," said Varzi, who now runs an energy consultancy in Britain. "But will that be enough to tip Iran into negotiating?"

Ireland to re-establish diplomatic presence in Iran
Ireland to re-establish diplomatic presence in Iran
Iran's CBI discloses number and value of exchanged checks
Iran's CBI discloses number and value of exchanged checks
Macron to hold phone talk with Iranian counterpart over JCPOA
Macron to hold phone talk with Iranian counterpart over JCPOA
Loading Bars
Latest
Hungary interested in including Azerbaijani gas in country's future energy mix - ambassador (INTERVIEW)
ExxonMobil to cut 7% of its workforce in Singapore
2021 Emmy Awards to be held in September
Ireland to re-establish diplomatic presence in Iran
Azerbaijan to contribute to development of CE work on organizing AI security
Biden takes steps to help Merck boost Johnson & Johnson COVID-19 vaccine supply
US Department of Commerce blacklists 14 entities in Russia, Germany, Switzerland
Chinese embassy opposes Indian media's allegation on cyberattacks
OPEC sees positive oil market outlook, continued downside risks
Iran's CBI discloses number and value of exchanged checks
Italian Parliament demands provision of maps of mined areas of Azerbaijan (PHOTO)
AZAL Announces Conditions for Rebooking Tickets for Flights Canceled due to COVID-19 Pandemic
Singapore's manufacturing PMI falls to 50.5 in February
Promise to provide countries with necessary vaccines within COVAX initiative is not fulfilled - State Agency of Medical Insurance
Parliament head to support all joint efforts for new constitution
Georgian President appreciates EU support
Macron to hold phone talk with Iranian counterpart over JCPOA
OECD recommends Georgia to support land registration reform for increasing FDI-SME linkages
Turkmenistan reveals schedule of intercity buses
Azerbaijan's State Tax Service registers Fuzuli Airport LLC
Azerbaijan felt Turkey's support not only during Karabakh war but throughout history - Minister
Int’l Model Non-Aligned Movement Simulation Exercise underway - Azerbaijan Foreign Ministry
Azerbaijan, Germany interested in increasing mutual trade turnover - Deputy minister
Iran's Energy Exchange announces products to be on sale on March 3
Azerbaijani State Agency of Automobile Roads talks about repair and construction on roads
Azerbaijani Finance Ministry places medium-term bonds at auction
Azerbaijan shows footage from Ucbulag village of Fuzuli district (PHOTO/VIDEO)
Georgia to receive first doses of COVID-19 vaccine via Covax platform in February
Irrigation systems to be put into operation in Iran’s agricultural sector
Azerbaijani Defense Ministry shares updated list of martyred servicemen in Second Karabakh War
Larization of loans increase in Georgia
Georgian AgroZone products to be exported abroad from Kutaisi Airport
Turkish specialists together with Azerbaijan’s AzTV to shoot film in Nagorno-Karabakh region
Ro-Pax ferry vessel commissioned by Azerbaijan's president - video report
Azerbaijani winemakers’ production down in 2020
Azerbaijan, Tajikistan discuss development of tourism co-op
Georgia’s banking sector begins year with profit
France uses only quarter of Astrazeneca vaccine doses
Uzbek-Korean JV to buy spare parts for electric actuator via tender
Kazakhstan identifies priority tasks to develop agriculture by 2025
Georgian Ministry of Finance sees decrease in mobilized income tax
Likelihood of interest rate decrease in Azerbaijan for 2021 seems minimal - Unicapital
Azerbaijan's AzNET segment neutralizes more phishing attacks in Jan.2021
Azerbaijan's new borrowings not to raise debt burden - Gazprombank
Azerbaijan studying Turkey's experience to strengthen institution of primary health care (PHOTO)
Uzbekistan, Azerbaijan talk big potential for co-op in agriculture
Hertz set to ride out of bankruptcy with $4.2 billion from investment firms
Money transfers via int'l payment systems down in Kazakhstan
Azercell obtains yet another award on customer experience management
German companies may take part in restoring Azerbaijan's liberated lands - ambassador
Excavation of well in Iran's Ahvaz oil field launched
Uzbekistan considers resuming air communication with Russia
Bahar Azadi gold coin price again falling in Iran
Kazakhstan, Georgia resume mutual flights as COVID-19 restrictions lifted
Uzbekistan eyes expanding mutually beneficial relations with foreign partners
Azerbaijan and Germany to continue co-op on improving qualifications of managers
Generation data of Iran's Shahid Rajaee TPP announced
Lithuania supports subsidizing renewable energy projects in Georgia
Demand for pick-up trucks in Azerbaijan may increase - expert
Kazakhstan boosts agriculture output, sets up tasks for sector's dev't
Turkey issues Jan. 2021 data on passenger traffic at Istanbul Airport
Azerbaijani company discloses output of primary aluminum
Spain's jobless hit four million for first time in five years as pandemic curbs bite
Volume of exports from Iran's Qom Province increases
S.Korean oil company holding exploration on land plots in Uzbekistan
EU executive says joint vaccine strategy not unravelling
Azerbaijan, Germany discuss expanding cooperation in oil & gas sector
Azerbaijani business environment entering recovery period - Minister of Economy
Iran's awaits action from US over JCPOA
Indonesia says identifies two cases of British COVID-19 variant
Europe – Iran held business forum to expand trade
Uzbek-Russian JV completes geological exploration at Akchalak investment block
Azerbaijani electricity supplier first to use special-purpose UAVs
Iran reaches gas export growth
Turkish president instructs to shoot TV series about Karabakh war victory
Cargo, passenger traffic via Turkish Sabiha Gokcen Airport down from early 2021
Germany to extend coronavirus lockdown until March 28
Iran unveils data of imports, exports through Anzali port
Azerbaijan records notable growth in population's US dollar demand
Iran reveals COVID-19 data for March 2
Azerbaijani Association of Travel Agencies and Association of Travel Bloggers sign agreement of understanding (PHOTO)
Union ministers Amit Shah, S Jaishankar get Covid-19 vaccine after PM Modi
Azerbaijan to hold new auction for public property facilities
Azerbaijan in cooperation with Turkey to make movie about Karabakh War
TV, radio channels to be non-accredited for 2021 Formula 1 Azerbaijan Grand Prix
Iran's Changuleh - 'a very complex oil field', says official
Proven gas reserves not adequate to furnish rising demand
BHOS launches next ‘Business Education for Engineers’ course
Iran to build combined cycle power plan in Mazandaran Province
Azerbaijan confirms 143 more COVID-19 recoveries
Gold, silver prices down in Azerbaijan
Nitin Gadkari: Despite Covid, highway construction at a record of over 32 km a day
IAF To Take Part In Multinational Exercise "Desert Flag" With France, US In UAE
Uzbekistan reports increases in gasoline price
Uzbek ministry to purchase computer equipment via tender
Uzbek commodity exchange reports volume of RON-80 gasoline sold
Russia's Novak preparing for OPEC+ meeting on March 4
UK's European Technology Development Ltd interested in doing business in Turkmenistan
Iran discusses potential of power transmission lines to neighboring countries
Uzbek commodity exchange reports volume of goods sold for Feb. 22-28
All news