After Iran's recent attack on Israel, analysts say the US faces challenges in tightening sanctions on Iranian oil amid concerns over rising oil prices and strained relations with China. The attack prompted Republican leaders in the US House of Representatives to criticize President Joe Biden for not implementing tougher current sanctions. Congressman Steve Scalise mentioned that the Biden administration's leniency made it easier for Tehran to sell oil, potentially funding terrorist activities.
In response to the attack, US lawmakers are expected to introduce legislation this week to increase sanctions on Iran, OPEC's third-largest oil producer. Former President Donald Trump reimposed sanctions on Iranian oil in 2018 after withdrawing from the JCPOA nuclear deal in 2015. The Biden administration has been trying to renew the deal but has faced challenges in doing so. One of their strategies to prevent Iran from selling oil abroad involves punishing companies in China, the UAE and other countries.
Washington recently renewed the sanctions regime that allows Iraq to buy energy from Iran, providing Tehran with an additional $10 billion in revenue. The pressure to punish Iran after the attack on Israel puts the Biden administration in a difficult position as it tries to prevent further attacks, stabilize oil prices and steer its relationship with China, Iran's biggest oil buyer.
Tensions between Hamas and Israeli forces in the Gaza Strip also contribute to Washington's efforts to prevent the spread of conflict in the region. Doubts remain, however, about Biden's ability to tighten sanctions on Iran's oil exports, which are crucial to the country's economy. Concerns about the impact on oil prices, as well as potential repercussions on US-China relations, are factors influencing decision-making in the Biden administration. Despite confirming that sanctions remain in place, the administration faces challenges in taking strong action against Iran.
The importance of sanctions in affecting Iran's oil exports presents a complex dilemma for the US government. While there is a desire to hold Iran accountable and prevent further attacks, the implications for oil prices and relations with China pose significant hurdles. Striking a balance between addressing security concerns and economic stability remains a key challenge for the Biden administration following Iran's attack on Israel.