The U.S. House of Representatives has approved new sanctions on Iran's oil sector that are set to become part of a foreign aid package, putting the measure on track to pass the Senate within days.
The legislation would expand sanctions against Iran to include foreign ports, ships and refineries that knowingly process or ship Iranian crude in violation of existing U.S. sanctions. It would also expand so-called secondary sanctions to include all transactions between Chinese financial institutions and sanctioned Iranian banks that are used to purchase oil and crude-based products.
The legislation, which is set to be included in a $95 billion package to provide funding for aid to Ukraine, Israel and Taiwan, passed by a vote of 360 to 58 on Saturday. It was negotiated in advance with Senate Majority Leader Chuck Schumer, and the White House said it supported it.
China is a major destination for Iranian oil
About 80% of Iran’s oil exports of about 1.5 million barrels per day are shipped to independent refineries in China, according to a summary of similar legislation.
While the sanctions could impact Iranian oil exports, adding up to $8.40 to the price of a barrel of oil, they also include presidential waiver powers, according to ClearView Energy Partners, a Washington-based consultancy.
“President Joe Biden may choose to invoke these authorities, blunting the impact of sanctions on prices,” ClearView wrote in a note to clients, adding: “A second Trump administration may not.”
U.S. Treasury Secretary Janet Yellen in October dismissed a widely held belief that the United States was gradually easing some sanctions on Iranian oil sales as part of efforts toward diplomatic rapprochement.
