On June 25th Senators Mark Kirk (R-IL) and Robert Menendez (D-NJ) revived legislation to impose and extend sanctions on Iran for a period of at least ten more years. The bill seeks to renew the Iran Sanctions Act of 1996 which is set to expire next year and would require the Administration to file reports with Congress detailing whether the billions of dollars in sanctions relief already provided to Iran has been spent to support terrorism or the country’s nuclear and missile programs or if the money is contributing to human rights violations. The bill would also mandate that the White House disclose if ongoing sanctions relief has enriched any senior Iranian officials. The effort to extend economic sanctions on Iran comes ahead of a June 30th deadline for Western powers to reach a nuclear agreement with the country. The Administration has been fighting Congressional efforts to extend the sanctions on Tehran.
Senator Menendez said that if Western powers strike a deal with Iran in the coming days, “it is critical that should Iran violate the terms of an agreement, severe penalties will follow and a forceful snapback of sanctions will occur.”
The claim that Iran could increase overseas crude sales by 1M bbl/day soon after sanctions are lifted is “an illusion,” but the country could boost its oil exports by 400K bbl/day in the first months, according to Iranian economist and managing partner of management consultant Atieh International, Bijan Khajehpour. Returning to higher, pre-sanctions crude production levels will take ~18 months, Khajehpour says, because of the time lag for sanctions relief to be implemented and for Iran to restore its production capacity, but that means Iran could be exporting 2.5M bbl/day by early 2017. Iran has ~20M barrels of crude stored on tankers that it has been unable to sell due to sanctions that went into effect in mid-2012, which would allow it to rapidly add to its exports. Meanwhile, Iran is said to be prepared to offer much better commercial terms to foreign companies prepared to invest to help revitalize its ailing oil industry than offered during the last market opening nearly two decades ago.