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Biden's Iran policy, purported shadow deals garner blowback from lawmakers


Lawmakers call out lack of transparency on Iran

Suggest oil sanctions not enforced as part of shadow nuclear deal

Criticize release of Iranian oil revenues

  • Author
  • Jasmin Melvin
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  • Jeff Mower
  • Commodity
  • Electric Power Oil

Republicans this week lashed out at a perceived single-minded pursuit by the Biden administration to revive a nuclear deal with Iran and associated lax oil sanctions enforcement, while Democrats warned that the alternative to diplomacy and negotiations with Tehran would be another Middle East conflict and potential forever war.

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A heated debate full of finger pointing and partisan blame games characterized a Sept. 13 hearing before a House oversight panel, while calmer heads prevailed at a Sept. 14 House Foreign Affairs Committee hearing that harped on the need for bipartisan cooperation to thwart threats posed by the Iranian regime domestically and abroad.

Both hearings, however, showcased concern with the Biden administration's policy toward Iran from lawmakers on both sides of the aisle as Iran has stockpiled sufficient enriched uranium for multiple weapons.

Congressional scrutiny

Republicans called out the lack of transparency on the Biden administration's dealings with Iran with regards to its nuclear program, hostage negotiations and even the dismissal of top Iran negotiator Rob Malley.

They harped on testimony Sept. 13 suggesting a shadow nuclear deal was in place that included the lifting of oil sanctions. That deal was premised on Washington releasing Iranian funds frozen in various accounts around the world and letting Iranian oil flow to China at record levels in return for Tehran promising not to cross the weapons-grade uranium enrichment threshold, according to Richard Goldberg, senior advisor at the Foundation for the Defense of Democracies.

Iran's crude oil production was at 2.95 million b/d in August, up 190,000 b/d from the prior month, according to the latest Platts OPEC+ survey by S&P Global Commodity Insights. The National Iranian Oil Co. has said output would rise to 3.5 million b/d in September.

House Foreign Affairs Committee Chairman Michael McCaul, Republican-Texas, expressed concern at the Sept. 14 hearing that the administration may have "brokered an informal nuclear understanding with Iran without notifying Congress in violation of the Iran Nuclear Agreement Review Act."

Neither the White House nor State Department responded to requests for comment on these claims. But White House National Security Council spokesman John Kirby told reporters at a briefing Sept. 13 that the US has not "lifted a single one of our sanctions on Iran. Iran will be getting no sanctions relief."

Democrats countered that the Trump administration's decision to pull out of the 2015 Joint Comprehensive Plan of Action accelerated Iran's march towards a nuclear weapon.

They focused on Stimson Center fellow Barbara Slavin's Sept. 13 testimony that leaving the JCPOA undermined the US position and allowed the Iranian regime to discredit and remove factions that were open to diplomacy, making negotiations today more difficult.

Representative Katie Porter, Democrat-California, acknowledged Sept. 13 that little is known about what the Biden administration's Iran policy actually encompasses and called for more transparency. But she blamed Republicans for blocking an amendment she sponsored calling for a report that she said would have forced the administration to share more information with Congress on policies and actions pertaining to Iran.

"Discretion is a key aspect of diplomacy but while backchannels can facilitate limited problem solving, they cannot provide a viable platform for managing the profound challenges posed by Iran's destabilizing policies," Suzanne Maloney, vice president and director of foreign policy at the Brookings Institution, said during the Sept. 14 hearing.

"President Biden has promised that Iran will not get a nuclear weapon under his watch, and fulfilling that pledge will require a credible policy framework that can withstand public and congressional scrutiny," she said.

Policy recommendations

Maloney advocated for direct diplomacy with Iran and pushed for putting the Iranian regime higher on the US foreign policy agenda, on par with China.

Further, "I think that there's much more that this body can do in terms of discussions and conversations with policymakers from across the Middle East, who in many cases are seeking to find ways to mitigate their own threat from Iran" she said.

The strength of the US relationship with Israel needs to be replicated with other "partners in the Gulf, who often play both sides of the aisle," she added. "It's got to be crystal clear to the Saudis and to the other Gulf Arabs that their cooperation, their enforcement of US sanctions, their assurance that they do not somehow incentivize the Islamic Republic to think that it can survive this current challenge is going to be absolutely critical."

Norman Roule, former National Intelligence Manager for Iran, told lawmakers Sept. 14 that Iran had "reason for some confidence."

He flagged that "Russia's invasion of Ukraine fractured great power unity and reinforced Western unwillingness to risk another international crisis; China's efforts to undermine the international order found an eager partner in the Islamic Republic; [and only] rhetoric and minor sanctions dominated the international community's response to the alarming expansion of Iran's nuclear program and stonewalling of the International Atomic Energy Agency."

Getting Iran to change its behavior, he said, requires sincere deterrence actions, consistent multilateral pressure and "a policy under which Iran believes its options to escape pressure don't exist," including the threat of US military force.

The state of current geopolitics make a multilateral approach unlikely, Roule contended, putting the burden on the US to impose unilateral sanctions and call on Europe and others to stand by them.

"If Iran believes that sanctions are not significant or not serious -- and the sanctions on the Iranian oil industry do not appear to be enforced as robustly as they should be -- it tells the Iranians they have not yet reached our red lines," Roule said. "I gave a list of a number of things Iran has done and none of those things provoked military action by the US or robust sanctions action. If you're in Tehran, your answer is probably I bet I can go a little farther."

Unfrozen funds

A hot topic at both hearings was the unfreezing of $6 billion in Iranian oil revenue as part of a deal negotiated to secure the return of five unjustly detained US citizens. The funds held in accounts in South Korea are being transferred to accounts in Europe and then ultimately to accounts in Qatar, where they will be available for humanitarian purposes with strict Treasury Department oversight.

Roule said that US officials' assertions that the transactions in Qatar would be carefully scrutinized and stopped if put toward non-humanitarian issues were correct.

But "this amount of money will likely free up a similar amount of money within Tehran" that can be used to sustain the regime and support nefarious activities, he said.

While Republicans bashed the release of funds as a ransom payment and incentive for Iran to continue taking hostages, Representative Dean Phillips, Democrat-Minnesota, said the action "de-escalated tension with Iran on multiple fronts."

"And while we have not yet crossed that finish line, I am hopeful that this modest diplomatic effort will lead to more understanding and most importantly less instability," the ranking member of the Middle East, North Africa and Central Asia subcommittee said. "It is my expectation that this is a baby step, a carrot if you will, to reduce this behavior and provide an incentive to modify behavior moving forward."

Washington observers earlier this year said that a successful prisoner exchange could establish the goodwill needed for a "gesture-for-a-gesture" deal that sees Iran commit to halting uranium enrichment at 60% and the US in turn unfreezing some Iranian assets and possibly relaxing enforcement of oil sanctions.

Restarting nuclear controls on Iran through now-scuttled talks to revive the JCPOA could have lifted oil sanctions and returned as much as 1 million b/d to the tight global market that has few options for near-term incremental supply.