US Denies Iran’s Claims About Agreement To Unfreeze Funds

According to United Against Nuclear Iran (UANI) estimates, Iran’s daily oil exports in violation of US sanctions soared from 825,000 barrels per day in March 2020 to 1.34 million bpd in March 2022, including just under 900,000 barrels per day to China.

UANI announced on Tuesday that its campaign to identify and track rogue vessel operators engaged in the Iran's oil and gas smuggling has stymied Tehran’s efforts to circumvent sanctions, leading to 100 vessels being stripped of their flags by authorities worldwide.

The Islamic Republic has a “ghost armada” of 182 rogue foreign vessels -- distinct from but complementing Iran’s own National Iranian Tanker Company fleet – that evades tracking and scrutiny and skirts US sanctions and exploits regulatory loopholes to ship millions of barrels of oil.

Every commercial vessel must be registered to the flag of a country to have docking rights and travel globally, these flag states are responsible for enforcing regulations.

UANI detects rogue operators misusing flags as part of Iran’s smuggling activities – often accompanied by the formation of new shell and front companies, ownership and name changes, and even alterations to ships’ physical markings, as well as flag-hopping, which involves repeatedly switching a ship’s flag to different national registries.

The group then alerts relevant authorities to take action, and when the vessels are "de-flagged,” the Islamic Republic is unable to complete the transfer that generates the export revenues.

An unnamed senior State Department official said on Monday that “We have two separate negotiations underway with Iran: one for a mutual return to full implementation of the JCPOA and one on the release of all four US citizens unjustly detained in Iran”, noting that “At this stage, neither negotiation has been successfully concluded”.

“Any reports otherwise, including reports about the transfer of Iranians funds are false. Our partners have not released these restricted funds to Iran, nor has US authorized transfer,” the source said.

Warning of Iran’s propaganda campaign that regularly suggests progress on agreements to prop up its currency, the source said that such reports usually appear whenever the Iranian rial is under strong market pressure, adding that there is “no reason to think any different this time”

Iran’s currency hit a new low against the US dollar in over two months, as nuclear talks remained deadlocked.

“Given the sensitivity, we urge caution in relying on anything other than official" US confirmation on this topic, the source added.

“We are continuing to approach these negotiations with the utmost urgency and urge Iran to do the same. Iran must allow US citizens Baquer (Bagher) and Siamak Namazi, Emad Shargi, and Morad Tahbaz to return home to their loved ones”.

Iran official government news website, IRNA reported Monday that a senior foreign official would visit Iran on Tuesday to conclude a deal to free the frozen funds. The foreign ministry immediately denied the claim.

In one initiative, 70 experts writing to Biden told him that removing the Revolutionary Guard “would threaten American lives, harm Gold Star Families, and empower a terrorist organization sponsoring daily attacks against U.S. interests and allies. The delisting would be strategically shortsighted and dangerous to U.S. national security interests.”

Negotiations that started in Vienna in April last year to restore Iran’s 2015 nuclear deal known as JCPOA came to a halt in March as Tehran reportedly demanded the removal of its Islamic Revolution Guard Corps (IRGC) from the US Foreign Terrorist Organization (FTO) list.

In a second initiative, 14 Republican Senators, led by Sen. John Kennedy of Louisiana sent a letter to the White House urging President Biden not to remove the IRGC designation as a terrorist organization that they said is “responsible for hundreds of American deaths.” The Senators also voiced their opposition to a new nuclear deal with Iran that would provide Tehran with billions of dollars of sanctions relief and frozen funds.

“Not only would this removal be wildly misguided, but it would betray our partners and allies in the region—particularly Israel and the Gulf states. These allies and partners already hold concerns that the United States is reducing its regional presence. The enactment of such a deal would provide the Iranian regime access to funds that it would use to destabilize the region through terrorist proxies,” the Senators said.

Opposition to such a move intensified last month with most Congressional Republicans and some Democrats appealing on various occasions to the White House not to consider making a concession.

Last week, signals emerged form the administration that President Biden was opposed to removing the IRGC from the FTO list, but other signs pointed to the possibility that the US might take such a step while keeping the designation of IRGC’s extraterritorial Qods (Quds) Force as a terrorist organization.

In March, 49 Republican Senators issued a statement urging President Biden not to revive the JCPOA without Congressional approval. “The administration has thus far refused to commit to submit a new Iran deal to the Senate for ratification as a treaty, as per its constitutional obligation, or for review under statutory requirements that passed on a bipartisan basis in response to the 2015 deal,” they said.

The 70 experts who wrote to Biden on Monday pointed out that the IRGC “is engaged in active terrorist plots to kill former U.S. government officials,” referring to explicit Iranian threats to kill high-ranking officials of the Trump administration, including former Secretary of State Mike Pompeo.

Among the signatories were former State Department Special Envoy for Venezuela and Iran Elliot Abrams, Ilan Berman of the American Foreign Policy Council, Amb. Paula Dobriansky, former Under Secretary of State for Global Affairs, former US Senator Joe Lieberman and former US National Security Advisor Robert McFarlane.

The letter concluded by saying, “Mr. President, no deal can be worth giving terrorists a green light to kill Americans, empowering a terrorist organization to harm U.S. interests and allies, or turning our backs on American victims of terrorism. For the sake of our national security, we implore you to maintain the IRGC’s FTO designation.”

The currency, rial, fell to a three-month low of 280,000 to one US dollar on Monday.

Iranian government officials including President Ebrahim Raisi and Oil Minister Javad Owji have been recently boasting about a 40-percent increase in Iran's oil exports and revenues.

Conservative newspaper Jomhouri Eslami wrote last week, "What is the impact of the extra revenues, if officials are right about selling as much oil as in the months before the US imposed sanctions?”

The daily wrote: "Some individuals officials are making pleasant statements to entertain the people, but their statements are not rooted in reality, and this will disappoint the people and will erode their trust in the government."

"While the prices of essential commodities and other goods are rising daily,” and people are suffering, “making hollow statements about improvement in the economy will not fool anyone," Jomhuri Eslami wrote.

Former reformist lawmaker Mostafa Kavakebian wrote in an April 8 tweet: "Government officials say that the Raisi administration can sell millions of barrels of oil at $100 per barrel” by circumventing US sanctions, and even releasing Iran's frozen assets in South Korea. “But why these measures do not affect people's livelihood and our diplomats are still wasting their time to get results from the Vienna talks?"

Hardliner journalist and activist Abdollah Ganji, who is close to the IRGC, tweeted in response, "Incidentally, I had the same question and asked the oil minister ‘if you selling more oil and you can repatriate the money, why we do not see its impact on people's livelihood?’ He said: We spent most of that money to make up for the $17 billion budget deficit from last year. The rest of it was spent on importing foodstuff with double prices on the global market."

Responding to the same question, social media users wrote in their comments that the extra income's impact is not visible "Because there are too many of those who steal the money."

Another comment read: "It is all lies. They do not sell more oil and do not bring any money into the country. They export the same amount of oil in barter trade deals. And when they bring back any money for selling the cheap oil, they have to pay a high percentage to middlemen." Yet another Twitter user said: "The system is corrupt, and it corrupts others. The situation will not get better as long as this regime is in power."

Oil Minister Javad Owji had said on March 24, "Iran has reached a record high of crude exports and revenues since sanctions hit the country’s oil industry in 2018." His Twitter post was accompanied by a quote from Supreme Leader Ali Khamenei, who praised the Raisi government for circumventing US sanctions.

Owji added that "The Oil Ministry provided hard currency and rial funds to the government beyond its budget commitments."

The minister's statement was in line with international media reports in February that said Iran’s oil exports had risen despite US sanctions. Reuters reported on February 10 that in the preceding two months daily shipments had surpassed one million barrels a day, the highest since May 2019.

Although there have been more exports, the additional revenue is probably too small to have a visible impact. If there were no US sanctions, Iran could export 2 million bpd and earn close to $60 billion a year at current prices, but Tehran is getting less than half of that now because even if it exports 1 million barrels pd, that is half the pre-sanction volume, sold at a discount.

Meanwhile, middlemen who do the illicit shipping take a big cut and a significant amount of the money probably does not come back in cash, but in food imports, as the oil minister’s remark seemed to suggest.

Majid-Reza Hariri told the Iranian Labour News Agency (ILNA) on Monday that US sanctions are preventing the implementation of a 25-year strategic cooperation agreement inked between Iran and China last year.

Hariri in previous interviews published in Iranian media has implicitly called for a nuclear agreement to be concluded with the West, emphasizing that Iran’s economy cannot emerge from its current crisis while US sanctions are in place, hampering oil exports and banking ties with the world.

The well-known businessman presiding over the Iran-China Chamber of Commerce in Tehran said as along as US sanctions are not removed, Tehran’s economic ties with Beijing cannot improve beyond the current point. He estimated that bilateral trade is not less than $30 billion, which could double in the event of a nuclear agreement with Washington.

Since former US president Donald Trump abandoned the Iran nuclear deal known as JCPOA in 2018, Tehran has been emphasizing an Eastern-oriented foreign policy it dubs as ‘Looking East’, probably in an attempt to show Washington that it has alternatives and can draw closer to Moscow and Beijing.

Hariri explained that although China is Iran’s biggest trade partner, 92 percent of what it buys are oil and minerals, not finished goods. He underlined the fact that global inflation, especially in commodities, is rising and Iran’s trade with China can see an uptick in terms of value but not volume.

In case of other trading partners, such as Iraq and Afghanistan, 75-80 percent of Iran’s exports are raw materials.

Iran in recent months has presented figures saying its exports are increasing. But Hariri implied that part of this rise is simply due to global rise in prices, not more exports.

Hariri explained that preparatory work has begun to work out details of cooperation with China according to the 25-year agreement, but besides the impediment of US sanctions, there are issues of securing credit and financing, which have to be resolved regarding each area of cooperation.

One of the processes in expanding trade ties with Beijing is establishing Iranian representative offices in China, which Hariri said is work in progress. Plans are to open four chamber of commerce branches, but he did not say in which Chinese cities. Also, a permanent exhibit of Iranian goods is planned to be set up in China.

Hariri explained that the importance of trade representation is to boost non-oil exports, preferably manufactured goods to China.

Although the Islamic government in Tehran often tries to highlight what it says is close ties with China, Beijing has established wide-ranging commercial relations with other regional countries, including Saudi Arabia and Israel that are the Islamic Republic of Iran’s adversaries.

Saudi Arabia exports 25 percent of its oil to China and recently announced it is willing to accept the Chinese currency as payment for oil, as relations have cooled with the Biden Administration. Already Saudi Arabia is China’s biggest trade partner in the region.