Iran-Iraq Oil-For-Gas Barter May Violate US Sanctions

The chairman of the committee Michael McCaul (R-TX) wrote his second letter to Secretary of State Antony Blinken – as he had vowed to do if he did not get answers – on Thursday with stronger words and a call to immediate action: a classified briefing and testimony. 

McCaul referred to his earlier letter of June 30 to Blinken seeking "a full and transparent accounting" about why Malley was suspended and was under investigation. The Senior Republican lawmaker slammed the response he received this week as "absolutely unacceptable" because the department refrained from providing any information. 

In the new letter, McCaul asserted that “the Committee expects prompt and full compliance with its requests, and it will not tolerate obstruction of its oversight of this national security matter.” 

As an initial next step, he asked Blinken to make arrangements “no later than 5:00 pm Monday, July 17 for a classified briefing on or before Wednesday, July 26,” threatening that “If you fail to make such arrangements in a timely manner, I am prepared to request testimony on this matter in a classified hearing and to compel the appearance of requested witnesses should they refuse to appear voluntarily.”

To ensure compliance by the State Department, he referred to the US Constitution, saying, "The Department of State shall keep the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives fully and currently informed with respect to all activities and responsibilities within the jurisdiction of these committees.”

“Any Federal department, agency, or independent establishment shall furnish any information requested by either such committee relating to any such activity or responsibility," he added. 

Earlier on Thursday, a group of 18 Republican senators called for a probe into the murky circumstances surrounding the State Department’s handling of Malley’s security clearance investigation. 

Spearheaded by Senator Bill Hagerty (R-TN), the group sent a letter to Diana Shaw, the acting inspector general of the Department of State, outlining specific questions that must be answered “no later than Friday, July 21, 2023.” 

Congress was kept in the dark about Malley having been suspended at least since early May and was only informed about it when his replacement was announced. Malley’s suspension was first reported by Iran International June 29, and formally announced the following day by Matthew Miller, the spokesperson for the US State Department, calling it "a leave of absence”, adding that his duties would be temporarily assumed by his deputy, Abram Paley. However, it is believed he had been suspended as early as April.

Capitol Hill Republicans are growing increasingly frustrated with the Biden administration’s unwillingness to share information about the issue. Adding insult to injury, an article by Tehran Times, a publication controlled by the Iranian regime, provided astonishing details about Malley's situation. This has led to concerns that the Iranian government knows more about the issue than US lawmakers.

In a letter Friday addressed to Secretary of State Antony Blinken and the Secretary of the Treasury Janet Yellen, the senators raised the issue of China’s increasing oil imports from Iran, while US sanctions imposed in 2018 and expanded in 2019 prohibit third parties from buying Iranian oil and oil products.

“Despite sanctions, the People's Republic of China (PRC) has purchased roughly $47 billion in Iranian oil since President Biden took office. Iran's ghost armada, the regime's primary tool for illicit oil trade, has grown from 60 vessels to a staggering 338 vessels since 2021,” the letter says.

The letter was signed by Senators Marco Rubio, Lindsey Graham, James Lankford, Rick Scott, Bill Hagerty, James Risch, John Barrasso, and Jerry Moran.

Critics for a long time have been accusing the Biden administration of not seriously enforcing sanctions imposed by former President Donald Trump, while negotiating with Tehran to revive the 2015 JCPOA nuclear accord. They argue that a substantial increase in Iranian oil exports to China occurred when President Joe Biden assumed office. This in turn made Iran more intransigent in nuclear talks that began in April 2021 and reached an impasse last September. 

While Iran was selling less than 250,000 barrels per day in 2019 and 2020, its daily shipments have now surpassed 1.5 barrels according to industry sources.

The Senators argued that lax sanctions enforcement enriches the Islamic Republic which in turn provides more support to its militant proxies across the region, enables the regime to suppress domestic dissent, attack US troops and assist Russia in its war on Ukraine.

“The administration's lack of sanctions and sanctions enforcement is directly undercutting American policy objectives in Europe, the Middle East, and beyond,” the Republican lawmakers underscored.

They asked the secretaries of state and treasury to devise a strategy to limit Iran’s petrochemical exports. “This strategy must include additional sanctions against PRC individuals and entities that continue to purchase, refine, or otherwise deal in sanctioned Iranian-origin oil.”

The senators urged the administration to “immediately enforce existing sanctions…and expand sanctions designations to include those who store Iranian oil, ship-to-ship oil transfer operators, individuals and entities, ports and port operators, and refineries and refinery operators - particularly in the PRC…Doing so will deprive the Iranian regime of critical revenues that they would use to harm U.S. interests and repress the Iranian people.”

There have also been bipartisan efforts in both the Senate and the House of Representatives in the past year to push the Biden administration to be more forceful against Iran.

The Solidifying Iran Sanction Act sponsored by Rep. Michael McCaul (R-Texas), the chairman of the House Foreign Affairs Committee, and co-sponsored by 24 lawmakers in the House and Senate including Democrats was introduced in May. The bill aimed to give permanent authorization to the president to implement sanctions on Iran by lifting a sunset clause on Iran Sanctions Act (ISA) of 1996.

On June 22, 33 US senators, or one-third of the Senate, joined to introduce the Iran Sanctions Relief Review Act (ISRRA – S.488) to “make it abundantly clear to the Biden Administration that any agreement made with Iran that involves sanctions relief must be submitted for Congressional review,” said Senator Bill Hagerty (R-Tenn) who led the effort.

Iran International reported June 29 that the administration’s Iran envoy Rob Malley was suspended due to a security investigation. This has further angered many lawmakers who say the State Department kept them in the dark.

The office of the US Special Envoy for Iran showed its first signs of life following days of media storm about circumstances surrounding former envoy’s dismissal on Friday.

The official twitter account of the mission said: “The Office of the Special Envoy for Iran and the entire team at the State Department remain engaged in implementing our policy on Iran.” The account had been inactive since early June, about a month before Malley’s suspension was announced. 

The Biden administration and the State Department are under fire by the Congress, which was kept in the dark about the developments around Robert Malley, including his unpaid leave of absence, suspension of his security clearance and the FBI investigation over his mishandling of confidential information. 

The account, whose profile picture has been changed to Deputy Special Envoy Abram Paley – Malley's replacement – added: “We continue our work with allies and partners to constrain Iran’s destabilizing behavior, defend human rights, encourage de-escalation, and promote a stable, prosperous, and more integrated Middle East.”

Malley’s suspension was first reported by Iran International on June 29, and formally announced the following day by Matthew Miller, the spokesperson for the US State Department, calling it "a leave of absence”, adding that his duties would be temporarily assumed by his deputy, Abram Paley. However, it is believed he had been suspended as early as April.

The development came a day after a group of 18 Republican senators called for a probe into the handling of Malley’s security clearance investigation by the State Department. 

Raisi, who visited Kenya, Zimbabwe and Uganda this week returned to Tehran on Friday and said the first aim of his African tour was to expand “Iran’s strategic depth” on the continent.

Isolated by US and European sanctions, the Islamic Republic has few options to develop economic relations to relieve economic pressure, which has led to very high inflation estimated to range from 70-100 percent. Raisi himself faces sanctions and cannot travel to Western countries.

The official government news website IRNA quoted Raisi as saying that securing “raw materials” and food was the second goal of his trip. He maintained that there is good opportunity for agriculture in Africa and Iran could trade petrochemical products and receive much needed food staples.

All three countries the Iranian president visited are grappling with numerous economic and social crises. Neither Iran nor these African countries have much to offer to each other in trade. However, Raisi said that the Islamic Republic has common ground with the three African countries in opposing “unilateralism”, a reference to Western diplomatic and economic power.

Upon his return to Tehran the president claimed that because of the Islamic revolution Iran has succeeded in establishing wide-ranging ties with many countries around the world. In fact, Iran enjoyed a respected status before the revolution and its citizens had the opportunity of visa-free travel to most countries in the 1970s.

Iranian media and social media users were deeply annoyed when Russia joined the Persian Gulf Arab states earlier this week to demand a settlement to the dispute over the ownership of the islands Iran says are its integral part. 

The Foreign Ministry summoned Russia's ambassador and Foreign Minister Hossein Amir Abdolahian and government spokesman Ali Bahadori wrote in separate tweets that "Iran will not compromise over its national interests and territorial integrity." 

However, Tehran’s official reaction to Russia has been meek. Social media users said officials had indeed made a compromise by not naming Russia in their tweets. 

Britain, which maintained control of Abu Musa, and the Greater and Lesser Tunb it had occupied in the 19th century, withdrew its forces from the Persian Gulf in 1971 and the United Arab Emirates was formed. However, Iran’s Imperial government at the time decided to reclaim what it believed were historical Iranian islands.

Mohammad Reza Shah sent the Iranian navy to secure all three in November of the same year, two days before UAE was established. Iranian forces remain on the islands, with only Abu Musa having much of a civilian population of several thousand.

In its Thursday edition, conservative newspaper Jomhouri Eslami wrote in a strongly worded editorial: "This is not going to be Russia's last treason against Iran." The daily added: "Foreign Ministry officials should not think that this episode will end by summoning Russia's ambassador. We need an essential revision of our political relations with Russia and forcing Russian statesmen to regret their treason against the Iranian nation."

The daily wrote, Russia's diplomatic move once again proved that those who opposed staunch supporters of Russia in the Iranian government were right.

The daily added that Russia and China are always prepared to undermine all international regulations and ethical rules to serve their own interests.

Asked why Moscow undermined Iran's territorial integrity," international relations analyst Mehdi Motaharnia told Khabar Online that "Russia wishes to put an end to its isolation by sacrificing Iran's interests." Meanwhile, he called Iranian officials' mild reaction "a withdrawal from revolutionary positions."

Meanwhile, Motaharinia said that "Iran's stance on the issue was one of the weakest since the 1979 revolution." He added that Russia's stance about referring the case to the International Court of Justice was tantamount to recognizing the United Arab Emirates' claims about the ownership of the three islands. 

This comes, he said, while Iran has always looked at Russia as its strategic partner and has even helped Russia in its war against Ukraine, but Russia has never done anything to prove it is Tehran's strategic partner. On the contrary, he said "Russia's stance was against Iran's territorial integrity." 

Also, reformist politician Elaheh Koulaei told Etemad Online website: "Russians will never consider Iran's interests in their relations with Iran or any other country." She stated that assuming Russia cares for Iran's interests is totally contradict the realities of international relations. 

She echoed other public figures who have said that Iran’s pro-Moscow and pro-Beijing foreign policy has led to an imbalance, without Tehran considering geopolitical facts and Iran's geostrategic requirements. Koulaei added that Teharan’s pro-East foreign policy ignores the need for a balance between relations with East and West. Such a policy cannot serve Iran's national interests.

Meanwhile, former lawmaker Ali Motahari wrote in a tweet: "Russia understands that Iran has been isolated because of its radical anti-Western policies and it needs Russia's support." 

Motahari added: "Russia's behavior was in fact another warning to Iran and its pro-Russian politicians to stop their pro-Eastern policies and revert to the idea of "neither East nor West" that was its foreign policy motto after the 1979 revolution."